I 

111TH CONGRESS 

1ST SESSION H. R. 1983 

To enact certain laws relating to small business as title 53, United States 

Code, ‘‘Small Business’’. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2009 

Mr. CONYERS (for himself and Mr. SMITH of Texas) introduced the following 

bill; which was referred to the Committee on the Judiciary 

A BILL 

To enact certain laws relating to small business as title 

53, United States Code, ‘‘Small Business’’. 

1 Be it enacted by the Senate and House of Representatives of the United 

2 States of America in Congress assembled, 

3 SECTION 1. TABLE OF CONTENTS. 

4 The table of contents for this Act is as follows: 

Sec. 1. Table of contents. 

Sec. 2. Purpose; conformity with original intent. 

Sec. 3. Enactment of title 53, United States Code. 

Sec. 4. Conforming amendments to positive law provisions of the United States Code. 

Sec. 5. Conforming amendments to non-positive law provisions of the United States Code. 

Sec. 6. Transitional and savings provisions. 

Sec. 7. Repeals. 

5 SEC. 2. PURPOSE; CONFORMITY WITH ORIGINAL INTENT. 

6 (a) PURPOSE.—The purpose of this Act is to codify certain existing laws 

7 relating to small business as a positive law title of the United States Code. 

8 (b) CONFORMITY WITH ORIGINAL INTENT.—In the codification of laws 

9 by this Act, the intent is to conform to the understood policy, intent, and 

10 purpose of Congress in the original enactments, with such amendments and 

11 corrections as will remove ambiguities, contradictions, and other imperfec12 tions, in accordance with section 205(c)(1) of House Resolution No. 988, 


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1 93d Congress, as enacted into law by Public Law 93–554 (2 U.S.C. 

2 285b(1)). 

3 SEC. 3. ENACTMENT OF TITLE 53, UNITED STATES CODE. 

4 Title 53, United States Code, ‘‘Small Business’’, is enacted as follows: 

5 TITLE 53—SMALL BUSINESS 

Subtitle I—General Provisions 

Chap. Sec. 

101. Definitions and declarations ............................................................................. 10101 

103. Small Business Administration ........................................................................ 10301 

105. Penalties ........................................................................................................... 10501 

107. Periodic reports ................................................................................................ 10701 

109. Funding ............................................................................................................ 10901 

Subtitle II—Loan, Contracting, and 

Related Assistance Programs 

DIVISION A—GENERAL PROVISIONS 

201. General Provisions ............................................................................................ 20101 

DIVISION B—GENERAL BUSINESS LOAN 

PROGRAM 

203. General purpose loans ...................................................................................... 20301 

205. Special purpose loans ....................................................................................... 20501 

207. Small business lending companies and non-federally regulated lenders .......... 20701 

DIVISION C—MICROLOAN PROGRAM 

211. Microloan program ........................................................................................... 21101 

DIVISION D—DISASTER ASSISTANCE 

PROGRAMS 

213. Disaster loan program ...................................................................................... 21301 

215. Private disaster assistance program ................................................................. 21501 

217. Immediate disaster assistance program ........................................................... 21501 

219. Expedited disaster assistance business loan guarantee program ..................... 21901 

DIVISION E—BUSINESS DEVELOPMENT 

PROGRAM 

231. General provisions ............................................................................................ 23101 

233. Contracting ....................................................................................................... 23301 

235. Technical and management assistance ............................................................. 21701 

DIVISION F—PROCUREMENT ASSISTANCE 

241. General provisions ............................................................................................ 24101 

243. Subcontracting provisions ................................................................................. 24301 

245. Notice provisions .............................................................................................. 24501 

247. Noncompetitive procedures ............................................................................... 24701 

249. Small business competitiveness demonstration program .................................. 24901 

DIVISION G—CONTRACT RESERVATION 

PROGRAMS 

251. General provisions ............................................................................................ 25101 

253. HUBZone program ........................................................................................... 25301 

255. Small business concerns owned and controlled by service-disabled veterans 25501 

257. Small business concerns owned and controlled by women ............................... 25701 


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DIVISION H—RESEARCH AND DEVELOPMENT 

261. General provisions ............................................................................................ 26101 

263. SBIRs and STTRs ........................................................................................... 26301 

DIVISION I—SMALL BUSINESS DEVELOPMENT 

PROGRAM 

271. Small business development center program .................................................... 27101 

DIVISION J—WOMEN’S BUSINESS CENTER 

PROGRAM 

273. Women’s business center program ................................................................... 27301 

DIVISION K—VETERANS AND RESERVISTS 

275. Veterans and reservists .................................................................................... 27501 

DIVISION X—MISCELLANEOUS 

291. Miscellaneous .................................................................................................... 29101 

Subtitle III—Investment Division 

DIVISION A—GENERAL PROVISIONS 

301. General provisions ............................................................................................ 30101 

DIVISION B—INVESTMENT PROGRAMS 

303. Small Business Investment Company Program ............................................... 30301 

305. New Markets Venture Capital Company Program ........................................... 30501 

307. Renewable Fuel Capital Investment Pilot Program ......................................... 30701 

DIVISION C—SURETY BOND GUARANTEE 

PROGRAM 

321. Surety and bond guarantee program ................................................................ 32101 

DIVISION D—CERTIFIED DEVELOPMENT 

COMPANY PROGRAM 

331. Certified development company program ......................................................... 33101 

Subtitle IV—Miscellaneous 

401. PRIME program ............................................................................................... 40101 

403. Women’s business enterprise development ....................................................... 40301 

451. Miscellaneous .................................................................................................... 45101 

1 Subtitle I—General Provisions 

2 CHAPTER 101—DEFINITIONS AND DECLARATIONS 

Sec. 

10101. Definitions. 

10102. Declarations. 

3 § 10101. Definitions 

4 In this title: 

5 (1) ACCREDITED LENDERS PROGRAM.—The term ‘‘accredited lenders 

6 program’’ means the program under section 33107 of this title. 

7 (2) ACTIVATED.—The term ‘‘activated’’, with respect to a reservist, 

8 means having received an order placing the reservist on active duty. 

9 (3) ACTIVE DUTY.—The term ‘‘active duty’’ has the meaning given 

10 the term in section 101 of title 10. 


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1 (4) ADMINISTRATION.—The term ‘‘Administration’’ means the Small 

2 Business Administration. 

3 (5) ADMINISTRATOR.—The term ‘‘Administrator’’ means the Admin4 istrator of the Small Business Administration. 

5 (6) AGRICULTURAL COMMODITY.—The term ‘‘agricultural com6 modity’’ has the meaning given the term in section 102 of the Agricul7 tural Trade Act of 1978 (7 U.S.C. 5602). 

8 (7) AGRICULTURAL ENTERPRISE.—The term ‘‘agricultural enter9 prise’’ means a business engaged in— 

10 (A) the production of food or fiber; 

11 (B) ranching; 

12 (C) raising of livestock; 

13 (D) aquaculture; or 

14 (E) any other industry related to agriculture. 

15 (8) ALASKA NATIVE CORPORATION.—The term ‘‘Alaska Native Cor16 poration’’ has the meaning given the term ‘‘Native Corporation’’ in sec17 tion 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602). 

18 (9) ALASKA NATIVE VILLAGE.—The term ‘‘Alaska Native Village’’ 

19 has the meaning given the term ‘‘Native village’’ in section 3 of the 

20 Alaska Native Claims Settlement Act (43 U.S.C. 1602). 

21 (10) ASSOCIATION.—The term ‘‘Association’’ means the association 

22 of small business development centers recognized under section 

23 27102(f) of this title. 

24 (11) BASE CLOSURE AREA.—The term ‘‘base closure area’’ has the 

25 meaning given the term in section 25301 of this title. 

26 (12) BIOMASS.— 

27 (A) IN GENERAL.—The term ‘‘biomass’’ means any organic ma28 terial that is available on a renewable or recurring basis. 

29 (B) INCLUSIONS.—The term ‘‘biomass’’ includes— 

30 (i) agricultural crops; 

31 (ii) trees grown for energy production; 

32 (iii) wood waste and wood residues; 

33 (iv) plants (including aquatic plants and grasses); 

34 (v) residues; 

35 (vi) fibers; 

36 (vii) animal wastes and other waste materials; and 

37 (viii) fats, oils, and greases (including recycled fats, oils, 

38 and greases). 

39 (C) EXCLUSIONS.—The term ‘‘biomass’’ does not include— 

40 (i) paper that is commonly recycled; or 

41 (ii) unsegregated solid waste. 


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1 (13) BUNDLED CONTRACT.—The term ‘‘bundled contract’’ means a 

2 contract that is entered into to meet requirements that are consolidated 

3 in a bundling of contract requirements. 

4 (14) BUNDLING OF CONTRACT REQUIREMENTS.— 

5 (A) IN GENERAL.—The term ‘‘bundling of contract require6 ments’’ means consolidating 2 or more procurement requirements 

7 for goods or services previously provided or performed under sepa8 rate smaller contracts into a solicitation of offers for a single con9 tract that is likely to be unsuitable for award to a small business 

10 concern due to— 

11 (i) the diversity, size, or specialized nature of the elements 

12 of the performance specified; 

13 (ii) the aggregate dollar value of the anticipated award; 

14 (iii) the geographical dispersion of the contract perform15 ance sites; or 

16 (iv) a combination of the factors described in clauses (i), 

17 (ii), and (iii). 

18 (B) SEPARATE SMALLER CONTRACT.—In subparagraph (A), the 

19 term ‘‘separate smaller contract’’ means a contract that— 

20 (i) has been performed by one or more small business con21 cerns; or 

22 (ii) was suitable for award to one or more small business 

23 concerns. 

24 (15) BUSINESS DEVELOPMENT PROGRAM.—The term ‘‘business de25 velopment program’’ means the program under division E of subtitle 

26 II. 

27 (16) CERTIFIED DEVELOPMENT COMPANY PROGRAM.—The term 

28 ‘‘certified development company program’’ means the program under 

29 division D of subtitle III. 

30 (17) COMPUTER CRIME.—The term ‘‘computer crime’’ means— 

31 (A) a crime committed against a small business concern by 

32 means of the use of a computer; and 

33 (B) a crime involving the illegal use of, or tampering with, a 

34 computer owned or utilized by a small business concern. 

35 (18) CONTRACTING OFFICER.—The term ‘‘contracting officer’’ has 

36 the meaning given the term in section 27(f) of the Office of Federal 

37 Procurement Policy Act (41 U.S.C. 423(f)). 

38 (19) CREDIT ELSEWHERE.—The term ‘‘credit elsewhere’’, with re39 spect to a concern or homeowner, means sufficient credit that is avail40 able from a non-Federal source on reasonable terms and conditions 

41 taking into consideration the prevailing rates and terms in the commuVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 nity in or near which the concern transacts business or the homeowner 

2 resides, for similar purposes and periods of time. 

3 (20) DEFENSE AGENCY.—The term ‘‘defense agency’’ has the mean4 ing given the term in section 101 of title 10. 

5 (21) DISABLED INDIVIDUAL.—The term ‘‘disabled individual’’ means 

6 an individual who— 

7 (A) has a physical, mental, or emotional impairment, defect, ail8 ment, disease, or disability of a permanent nature that in any way 

9 limits the selection of any type of employment for which the per10 son would otherwise be qualified or qualifiable; or 

11 (B) is a service-disabled veteran. 

12 (22) DISABLED VETERAN.—The term ‘‘disabled veteran’’ has the 

13 meaning given the term in section 4211 of title 38. 

14 (23) DISADVANTAGED OWNER.—The term ‘‘disadvantaged owner’’ 

15 has the meaning given the term in section 23101 of this title. 

16 (24) DISASTER.— 

17 (A) IN GENERAL.—The term ‘‘disaster’’ means a sudden event 

18 that causes severe damage. 

19 (B) INCLUSIONS.—The term ‘‘disaster’’ includes a flood, hurri20 cane, tornado, earthquake, fire, explosion, volcano, windstorm, 

21 landslide or mudslide, tidal wave, commercial fishery failure or 

22 fishery resource disaster (as determined by the Secretary of Com23 merce under section 308(b) of the Interjurisdictional Fisheries Act 

24 of 1986 (16 U.S.C. 4107(b))), ocean condition resulting in the clo25 sure of customary fishing water, riot, civil disorder, or other catas26 trophe. 

27 (C) EXCLUSION.—The term ‘‘disaster’’ does not include an eco28 nomic dislocation. 

29 (25) DISASTER AREA.—The term ‘‘disaster area’’ means an area af30 fected by a natural or other disaster, as determined for purposes of sec31 tion 21301 or 21302 of this title, during the period of the declaration. 

32 (26) DISASTER ASSISTANCE PROGRAM.—The term ‘‘disaster assist33 ance program’’ means— 

34 (A) the disaster loan program; 

35 (B) the private disaster assistance program; 

36 (C) the immediate disaster assistance program; and 

37 (D) the expedited disaster assistance business loan guarantee 

38 program. 

39 (27) DISASTER LOAN PROGRAM.—The term ‘‘disaster loan program’’ 

40 means the program under chapter 213. 


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1 (28) ECONOMICALLY DISADVANTAGED INDIAN TRIBE.—The term 

2 ‘‘economically disadvantaged Indian tribe’’ has the meaning given the 

3 term in section 23101 of this title. 

4 (29) ENERGY EFFICIENCY PROJECT.—The term ‘‘energy efficiency 

5 project’’ means the installation or upgrading of equipment that results 

6 in a significant reduction in energy usage. 

7 (30) ENERGY MEASURE.—The term ‘‘energy measure’’ includes— 

8 (A) solar thermal energy equipment that is— 

9 (i) of the active type based on mechanically forced energy 

10 transfer; 

11 (ii) of the passive type based on convective, conductive, or 

12 radiant energy transfer; or 

13 (iii) a combination of the types described in clauses (i) and 

14 (ii); 

15 (B) photovoltaic cells and related equipment; 

16 (C) a product or service— 

17 (i) the primary purpose of which is conservation of energy 

18 through a device or technique that increases the energy effi19 ciency of existing equipment, methods of operation, or sys20 tems that use fossil fuel; and 

21 (ii) that is on the Energy Conservation Measures list of the 

22 Secretary of Energy or that the Administrator determines to 

23 be consistent with the intent of this paragraph; 

24 (D) equipment the primary purpose of which is production of 

25 energy from wood, biological waste, grain, or another biomass (as 

26 defined by the Administrator) source of energy; 

27 (E) equipment the primary purpose of which is industrial cogen28 eration of energy, district heating, or production of energy from 

29 industrial waste; 

30 (F) hydroelectric power equipment; 

31 (G) wind energy conversion equipment; and 

32 (H) an engineering, architectural, consulting, or other profes33 sional service that is necessary or appropriate to aid citizens in 

34 using any of the measures described in subparagraphs (A) to (G). 

35 (31) EXPEDITED DISASTER ASSISTANCE LOAN GUARANTEE PRO36 GRAM.—The term ‘‘expedited disaster assistance loan guarantee pro37 gram’’ means the program under chapter 219. 

38 (32) EXPORT WORKING CAPITAL PROGRAM.—The term ‘‘export 

39 working capital program’’ means the program established under section 

40 20508 of this title. 


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1 (33) EXPRESS LENDER.—The term ‘‘express lender’’ means a lender 

2 authorized by the Administrator to participate in the express loan pro3 gram. 

4 (34) EXPRESS LOAN.—The term ‘‘express loan’’ means a loan made 

5 pursuant to section 20320 of this title in which a lender utilizes to the 

6 maximum extent practicable its own loan analyses, procedures, and 

7 documentation. 

8 (35) EXPRESS LOAN PROGRAM.—The term ‘‘express loan program’’ 

9 means the program for express loans established by the Administrator 

10 under section 7(a)(25)(B) of the Small Business Act (15 U.S.C. 

11 636(a)(25)(B)) (as in existence on April 5, 2004), with a guarantee 

12 rate of not more than 50 percent. 

13 (36) FEDERAL AGENCY.—Except in subtitles III and IV: 

14 (A) IN GENERAL.—The term ‘‘Federal agency’’ has the meaning 

15 given the term ‘‘agency’’ in section 551 of title 5. 

16 (B) EXCLUSION.—The term ‘‘Federal agency’’ does not in17 clude— 

18 (i) the United States Postal Service; or 

19 (ii) the Government Accountability Office. 

20 (37) GENERAL BUSINESS LOAN PROGRAM.—The term ‘‘general busi21 ness loan program’’ means the program under division B of subtitle II. 

22 (38) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The term 

23 ‘‘historically underutilized business zone’’ has the meaning given the 

24 term in section 25301 of this title. 

25 (39) HOMEOWNER.—The term ‘‘homeowner’’ includes an owner or 

26 lessee of residential property (including personal property of the owner 

27 or lessee of the residential property). 

28 (40) HUBZONE.—The term ‘‘HUBZone’’ has the meaning given the 

29 term in section 25301 of this title. 

30 (41) HUBZONE PROGRAM.—The term ‘‘HUBZone program’’ means 

31 the program under chapter 253. 

32 (42) HUBZONE SMALL BUSINESS CONCERN.—The term ‘‘HUBZone 

33 small business concern’’ has the meaning given the term in section 

34 25301 of this title. 

35 (43) IMMEDIATE DISASTER ASSISTANCE PROGRAM.—The term ‘‘im36 mediate disaster assistance program’’ means the program under chap37 ter 217. 

38 (44) INDIAN RESERVATION.— 

39 (A) IN GENERAL.—The term ‘‘Indian reservation’’ has the 

40 meaning given the term ‘‘Indian country’’ in section 1151 of title 

41 18. 


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1 (B) EXCLUSIONS.—The term ‘‘Indian reservation’’ does not in2 clude— 

3 (i) land located in a State in which an Indian tribe did not 

4 exercise governmental jurisdiction on December 21, 2000, un5 less that Indian tribe is recognized after December 21, 2000, 

6 by either an Act of Congress or pursuant to regulations of 

7 the Secretary of the Interior for the administrative recogni8 tion that an Indian group exists as an Indian tribe (part 83 

9 of title 25, Code of Federal Regulations); or 

10 (ii) land taken into trust or acquired by an Indian tribe 

11 after December 21, 2000, if the land— 

12 (I) is not located within the external boundaries of an 

13 Indian reservation or former reservation; or 

14 (II) is not contiguous to the land held in trust or re15 stricted status on December 21, 2000. 

16 (C) LAND IN OKLAHOMA.—With respect to land in the State of 

17 Oklahoma, the term ‘‘Indian reservation’’ means land that— 

18 (i) is within the jurisdictional areas of an Oklahoma Indian 

19 tribe (as determined by the Secretary of the Interior); and 

20 (ii) is recognized by the Secretary of the Interior as eligible 

21 for trust land status under part 151 of title 25, Code of Fed22 eral Regulations (as in effect on December 21, 2000). 

23 (45) MAJOR DISASTER.—The term ‘‘major disaster’’ has the mean24 ing given the term in section 102 of the Robert T. Stafford Disaster 

25 Relief and Emergency Assistance Act (42 U.S.C. 5122). 

26 (46) MAJOR DISASTER AREA.—The term ‘‘major disaster area’’ 

27 means the area for which a major disaster is declared. 

28 (47) MICROLOAN PROGRAM.—The term ‘‘microloan program’’ means 

29 the program under chapter 211. 

30 (48) MILITARY DEPARTMENT.—The term ‘‘military department’’ has 

31 the meaning given the term in section 101 of title 10. 

32 (49) NATIVE HAWAIIAN ORGANIZATION.—The term ‘‘Native Hawai33 ian organization’’ means a community service organization serving Na34 tive Hawaiians in the State of Hawaii— 

35 (A) that is a nonprofit corporation that has filed articles of in36 corporation with the director of the Hawaii Department of Com37 merce and Consumer Affairs, or any successor agency; 

38 (B) that is controlled by Native Hawaiians; and 

39 (C) the business activities of which will principally benefit Na40 tive Hawaiians in the State of Hawaii. 


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1 (50) NEW MARKETS VENTURE CAPITAL COMPANY PROGRAM.—The 

2 term ‘‘new markets venture capital company program’’ means the pro3 gram under chapter 305. 

4 (51) NON-FEDERALLY REGULATED LENDER.—The term ‘‘non-feder5 ally regulated lender’’ means a business concern (other than a small 

6 business lending company)— 

7 (A) that is authorized by the Administrator to make loans 

8 under the general business loan program; 

9 (B) that is subject to regulation by a State; and 

10 (C) the lending activities of which are not regulated by any Fed11 eral banking authority. 

12 (52) PREFERRED LENDER.—The term ‘‘preferred lender’’ means a 

13 lender participating in the preferred lenders program. 

14 (53) PREFERRED LENDERS PROGRAM.—The term ‘‘preferred lenders 

15 program’’ means the preferred lenders program carried out under sec16 tion 10332(f)(3) of this title. 

17 (54) PREMIER CERTIFIED LENDERS PROGRAM.—The term ‘‘premier 

18 certified lenders program’’ means the program under section 33108 of 

19 this title. 

20 (55) PRIME PROGRAM.—The term ‘‘PRIME program’’ means the 

21 program under chapter 401. 

22 (56) PRIVATE DISASTER ASSISTANCE PROGRAM.—The term ‘‘private 

23 disaster assistance program’’ means the program under chapter 215. 

24 (57) PROCURING AGENCY.—The term ‘‘procuring agency’’ means a 

25 Federal agency that has procurement power. 

26 (58) PUBLIC OR PRIVATE ORGANIZATION FOR THE DISABLED.—The 

27 term ‘‘public or private organization for the disabled’’ means an organi28 zation— 

29 (A) that is organized under the laws of the United States or of 

30 a State; 

31 (B) that is operated in the interest of disabled individuals; 

32 (C) the net income of which does not inure in whole or in part 

33 to the benefit of any shareholder or other individual; 

34 (D) that complies with any applicable occupational health and 

35 safety standard prescribed by the Secretary of Labor; and 

36 (E) that, in the production of commodities and in the provision 

37 of services during any fiscal year in which the organization re38 ceived financial assistance under the general business loan pro39 gram, employs disabled individuals for not less than 75 percent of 

40 the man-hours required for the production or provision of the com41 modities or services. 


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1 (59) QUALIFIED CENSUS TRACT.—The term ‘‘qualified census tract’’ 

2 has the meaning given the term in section 42(d)(5)(C)(ii) of the Inter3 nal Revenue Code of 1986 (26 U.S.C. 42(d)(5)(C)(ii)). 

4 (60) QUALIFIED EMPLOYEE TRUST.—The term ‘‘qualified employee 

5 trust’’ has the meaning given the term in section 20509(a) of this title. 

6 (61) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—The term 

7 ‘‘qualified HUBZone small business concern’’ has the meaning given 

8 the term in section 25301 of this title. 

9 (62) QUALIFIED INDIAN TRIBE.—The term ‘‘qualified Indian tribe’’ 

10 means an Indian tribe (as defined in section 4 of the Indian Self-Deter11 mination and Education Assistance Act (25 U.S.C. 450b)) that owns 

12 and controls 100 percent of a small business concern. 

13 (63) QUALIFIED NONMETROPOLITAN COUNTY.—The term ‘‘qualified 

14 nonmetropolitan county’’ has the meaning given the term in section 

15 25301 of this title. 

16 (64) REDESIGNATED AREA.—The term ‘‘redesignated area’’ has the 

17 meaning given the term in section 25301 of this title. 

18 (65) RENEWABLE ENERGY SYSTEM.—The term ‘‘renewable energy 

19 system’’ means a system of energy derived from— 

20 (A) a wind, solar, biomass (including biodiesel), or geothermal 

21 source; or 

22 (B) hydrogen derived from biomass or water using an energy 

23 source described in subparagraph (A). 

24 (66) RENEWABLE FUEL CAPITAL INVESTMENT PILOT PROGRAM.— 

25 The term ‘‘renewable fuel capital investment pilot program’’ means the 

26 program under chapter 307. 

27 (67) RESERVIST.—The term ‘‘reservist’’ means a member of a re28 serve component of the Armed Forces, as described in section 101 of 

29 title 10. 

30 (68) SCORE.—The term ‘‘SCORE’’ means the volunteer program 

31 known as SCORE. 

32 (69) SERVICE-DISABLED VETERAN.—The term ‘‘service-disabled vet33 eran’’ means a veteran with a disability that is service-connected (as 

34 defined in section 101 of title 38). 

35 (70) SIMPLIFIED ACQUISITION THRESHOLD.—The term ‘‘simplified 

36 acquisition threshold’’ has the meaning given the term in section 4 of 

37 the Office of Federal Procurement Policy Act (41 U.S.C. 403). 

38 (71) SMALL AGRICULTURAL COOPERATIVE.— 

39 (A) IN GENERAL.—The term ‘‘small agricultural cooperative’’ 

40 means an association (corporate or otherwise) acting pursuant to 

41 the Agricultural Marketing Act (12 U.S.C. 1141j) the size of 


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1 which does not exceed the size standard established by the Admin2 istrator for other similar agricultural small business concerns. 

3 (B) SIZE DETERMINATION.—In determining the size of an asso4 ciation described in subparagraph (A), the Administrator— 

5 (i) shall regard the association as a business concern; and 

6 (ii) shall not include the income or employees of any mem7 ber shareholder of the association. 

8 (72) SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PRO9 GRAM.—The term ‘‘small business competitiveness demonstration pro10 gram’’ means the program under chapter 249. 

11 (73) SMALL BUSINESS CONCERN.— 

12 (A) IN GENERAL.—The term ‘‘small business concern’’ means 

13 a business concern (including an agricultural enterprise) that— 

14 (i) is independently owned and operated; and 

15 (ii) is not dominant in its field of operation. 

16 (B) INCLUSIONS.—Notwithstanding any other provision of law, 

17 an agricultural enterprise that has annual receipts (including re18 ceipts of its affiliates) not in excess of $750,000 shall be deemed 

19 to be a small business concern. 

20 (C) ESTABLISHMENT OF SIZE STANDARDS.— 

21 (i) IN GENERAL.—In addition to the criteria specified in 

22 subparagraph (A), the Administrator may specify detailed 

23 definitions or standards by which a business concern may be 

24 determined to be a small business concern for the purposes 

25 of this title or any other law. 

26 (ii) ADDITIONAL CRITERIA.—The standards described in 

27 clause (i) may use— 

28 (I) number of employees, dollar volume of business, 

29 net worth, net income, or a combination thereof; or 

30 (II) other appropriate factors. 

31 (iii) REQUIREMENTS FOR PRESCRIPTION OF SIZE STAND32 ARD.—Unless specifically authorized by statute, no Federal 

33 agency may prescribe a size standard for categorizing a busi34 ness concern as a small business concern unless the proposed 

35 size standard— 

36 (I) is proposed after an opportunity for public notice 

37 and comment; 

38 (II) provides for determining— 

39 (aa) the size of a manufacturing concern as meas40 ured by the manufacturing concern’s average em41 ployment based on employment during each of the 


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1 manufacturing concern’s pay periods for the pre2 ceding 12 months; 

3 (bb) the size of a business concern providing serv4 ices on the basis of the annual average gross re5 ceipts of the business concern over a period of not 

6 less than 3 years; 

7 (cc) the size of other business concerns on the 

8 basis of data over a period of not less than 3 years; 

9 or 

10 (dd) other appropriate factors; and 

11 (III) is approved by the Administrator. 

12 (iv) FACTORS TO BE CONSIDERED.—In establishing or ap13 proving a size standard under this subparagraph, the Admin14 istrator shall— 

15 (I) ensure that the size standard varies from industry 

16 to industry to the extent necessary to reflect the dif17 fering characteristics of the various industries; and 

18 (II) consider other factors that the Administrator con19 siders to be relevant. 

20 (v) LISTING OF ADDITIONAL SIZE STANDARDS.—The Ad21 ministrator shall prescribe regulations to carry out this sub22 paragraph. The regulations shall include a listing of all small 

23 business size standards prescribed by statute or by individual 

24 Federal agencies, identifying the programs or purposes to 

25 which the size standards apply. 

26 (74) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY

27 SERVICE-DISABLED VETERANS.—The term ‘‘small business concern 

28 owned and controlled by service-disabled veterans’’ means a small busi29 ness concern— 

30 (A) not less than 51 percent of which is owned by one or more 

31 service-disabled veterans; and 

32 (B) the management and daily business operations of which are 

33 controlled by— 

34 (i) one or more service-disabled veterans; or 

35 (ii) in the case of a veteran with permanent and severe dis36 ability, the spouse or permanent caregiver of the veteran. 

37 (75) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SO38 CIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.—The term 

39 ‘‘small business concern owned and controlled by socially and economi40 cally disadvantaged individuals’’ has the meaning given the term in sec41 tion 23101 of this title. 


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1 (76) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY VET2 ERANS.—The term ‘‘small business concern owned and controlled by 

3 veterans’’ means a small business concern— 

4 (A) not less than 51 percent of which is owned by one or more 

5 veterans; and 

6 (B) the management and daily business operations of which are 

7 controlled by one or more veterans. 

8 (77) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY

9 WOMEN.—The term ‘‘small business concern owned and controlled by 

10 women’’ means a small business concern— 

11 (A)(i) at least 51 percent of which is owned by one or more 

12 women; or 

13 (ii) in the case of a publicly owned business, at least 51 percent 

14 of the stock of which is owned by one or more women; and 

15 (B) the management and daily business operations of the busi16 ness of which are controlled by one or more women. 

17 (78) SMALL BUSINESS DEVELOPMENT CENTER.—The term ‘‘small 

18 business development center’’ means a small business development cen19 ter that receives financial assistance under chapter 271. 

20 (79) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM.—The term 

21 ‘‘small business development center program’’ means the small business 

22 development center program under chapter 271. 

23 (80) SMALL BUSINESS INVESTMENT COMPANY PROGRAM.—The term 

24 ‘‘small business investment company program’’ means the program 

25 under chapter 303. 

26 (81) SMALL BUSINESS LENDING COMPANY.—The term ‘‘small busi27 ness lending company’’ means a business concern— 

28 (A) that is authorized by the Administrator to make loans 

29 under the general business loan program; and 

30 (B) the lending activities of which are not subject to regulation 

31 by any Federal or State regulatory agency. 

32 (82) SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUAL.— 

33 The term ‘‘socially and economically disadvantaged individual’’ has the 

34 meaning given the term in section 23101 of this title. 

35 (83) SOCIALLY DISADVANTAGED INDIVIDUAL.—The term ‘‘socially 

36 disadvantaged individual’’ has the meaning given the term in section 

37 23101 of this title. 

38 (84) SURETY BOND GUARANTEE PROGRAM.—The term ‘‘surety bond 

39 guarantee program’’ means the program under chapter 321. 


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1 (85) UNITED STATES.—The term ‘‘United States’’ includes the 

2 States, the District of Columbia, Puerto Rico, and the territories and 

3 possessions of the United States. 

4 (86) VETERAN.—The term ‘‘veteran’’ has the meaning given the 

5 term in section 101 of title 38. 

6 (87) WOMEN’S BUSINESS CENTER.—The term ‘‘women’s business 

7 center’’ means a women’s business center operating under chapter 273. 

8 (88) WOMEN’S BUSINESS CENTER PROGRAM.—The term ‘‘women’s 

9 business center program’’ means the women’s business center program 

10 under chapter 273. 

11 § 10102. Declarations 

12 All declarations of findings, purposes, or policies enacted in connection 

13 with the enactment of any source law for this title, as originally enacted, 

14 or in connection with any amendment to this title, are incorporated in this 

15 title by reference. 

16 CHAPTER 103—SMALL BUSINESS ADMINISTRATION 

Subchapter I—Organization 

Sec. 

10301. Establishment. 

10302. Administrator. 

10303. Deputy Administrator. 

10304. Associate Administrators. 

10305. Personnel. 

10306. Small Business Investment Division. 

10307. Office of Advocacy. 

10308. Division of Program Certification and Eligibility. 

10309. Office of International Trade. 

10310. Office of Rural Affairs. 

10311. Office of Women’s Business Ownership. 

10312. Small Business and Agriculture Regulatory Enforcement Ombudsman; regional small 

business regulatory fairness boards. 

10313. Office of Veterans Business Development. 

10314. Task force on purchases from the blind and severely disabled. 

10315. Advisory committees. 

10316. Bureau of PCLP Oversight. 

Subchapter II—Functions 

10331. General powers. 

10332. Financial management. 

10333. Small business economic database. 

10334. Small business computer security and education program. 

10335. General policies governing the granting and denial of applications. 

10336. Retention of records. 

10337. Consultation and cooperation with other Federal agencies. 

10338. Representation of status as small business concern. 

10339. Criminal background checks. 

17 Subchapter I—Organization 

18 § 10301. Establishment 

19 (a) IN GENERAL.—There is established to carry out the authorities com20 mitted to the Administrator under this title and other law an agency to be 

21 known as the Small Business Administration. 


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1 (b) INDEPENDENT ESTABLISHMENT.—The Administration shall be under 

2 the general direction and supervision of the President and shall not be affili3 ated with or be within any other Federal agency. 

4 (c) OFFICES.—The principal office of the Administration shall be located 

5 in the District of Columbia. The Administrator may establish such branch 

6 and regional offices in other places in the United States as the Adminis7 trator may determine. 

8 § 10302. Administrator 

9 (a) IN GENERAL.—The management of the Administration shall be vest10 ed in an Administrator who shall be appointed from civilian life by the 

11 President, by and with the advice and consent of the Senate, and who shall 

12 be a person of outstanding qualifications known to be familiar and sympa13 thetic with small business needs and problems. 

14 (b) FULL-TIME POSITION.—The Administrator shall not engage in any 

15 business, vocation, or employment other than that of serving as Adminis16 trator. 

17 § 10303. Deputy Administrator 

18 (a) IN GENERAL.—The President may appoint a Deputy Administrator 

19 of the Administration, by and with the advice and consent of the Senate. 

20 (b) DUTIES.—The Deputy Administrator shall be Acting Administrator of 

21 the Administration during the absence or disability of the Administrator or 

22 in the event of a vacancy in the office of Administrator. 

23 § 10304. Associate Administrators 

24 (a) IN GENERAL.—The Administrator may appoint 5 Associate Adminis25 trators (including the Associate Administrator specified in 10306 of this 

26 title) to assist in the execution of the functions vested in the Administrator. 

27 (b) ASSOCIATE ADMINISTRATOR FOR VETERANS BUSINESS DEVELOP28 MENT.— 

29 (1) IN GENERAL.—One Associate Administrator appointed under 

30 subsection (a) shall be the Associate Administrator for Veterans Busi31 ness Development. 

32 (2) POSITION.—The Associate Administrator for Veterans Business 

33 Development shall be an appointee in the Senior Executive Service. 

34 (3) REPORTING.—The Associate Administrator for Veterans Busi35 ness Development shall report to and be responsible directly to the Ad36 ministrator. 

37 (4) DUTIES.—The Associate Administrator for Veterans Business 

38 Development shall administer the Office of Veterans Business Develop39 ment established under section 10313 of this title. 

40 (c) ASSOCIATE ADMINISTRATOR FOR MINORITY SMALL BUSINESS AND

41 CAPITAL OWNERSHIP DEVELOPMENT.— 


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1 (1) IN GENERAL.—One of the Associate Administrators shall be des2 ignated at the time of appointment as the Associate Administrator for 

3 Minority Small Business and Capital Ownership Development. 

4 (2) POSITION.—The Associate Administrator for Minority Small 

5 Business and Capital Ownership Development shall be an employee in 

6 the competitive service or a career appointee in the Senior Executive 

7 Service, and the position of Associate Administrator for Minority Small 

8 Business and Capital Ownership Development shall be a career re9 served position. 

10 (3) DUTIES.— 

11 (A) FORMULATION AND COORDINATION OF POLICIES.—The As12 sociate Administrator for Minority Small Business and Capital 

13 Ownership Development shall be responsible for formulating and 

14 coordinating policies relating to Federal assistance to small busi15 ness concerns eligible for assistance under section 20504 of this 

16 title and small business concerns eligible to receive contracts under 

17 the business development program. 

18 (B) BUSINESS DEVELOPMENT PROGRAM.—The Associate Ad19 ministrator for Minority Small Business and Capital Ownership 

20 Development shall be responsible to the Administrator for the for21 mulation, execution, and management of the business development 

22 program (including the making of determinations under para23 graphs (8), (15), (16), and (17) of section 23101 of this title and 

24 sections 23310, 23312(a)(1), and 23318(g) of this title), under 

25 the supervision of the Administrator. 

26 (d) ASSOCIATE ADMINISTRATOR FOR SMALL BUSINESS DEVELOPMENT

27 CENTERS.— 

28 (1) APPOINTMENT AND COMPENSATION.—The Administrator shall 

29 appoint an Associate Administrator for Small Business Development 

30 Centers who shall— 

31 (A) report to an official who is not more than one level below 

32 the Office of the Administrator; and 

33 (B) serve without regard to the provisions of title 5 governing 

34 appointments in the competitive service, and without regard to 

35 chapter 51 and subchapter III of chapter 53 of that title relating 

36 to classification and General Schedule pay rates, but at a rate not 

37 less than the rate of pay for a position classified above GS–15 

38 pursuant to section 5108 of title 5. 

39 (2) DUTIES.— 


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1 (A) IN GENERAL.—The sole responsibility of the Associate Ad2 ministrator for Small Business Development Centers shall be to 

3 administer the small business development center program. 

4 (B) DUTIES INCLUDED.—Duties of the position shall include— 

5 (i) recommending the annual budget for the small business 

6 development center program; 

7 (ii) reviewing the annual budgets submitted by each appli8 cant under the small business development center program; 

9 (iii) establishing appropriate funding levels for applicants 

10 under the small business development center program; 

11 (iv) selecting applicants to participate in the small business 

12 development center program; 

13 (v) implementing chapter 271; 

14 (vi) maintaining a clearinghouse to provide for the dissemi15 nation and exchange of information between small business 

16 development centers; and 

17 (vii) conducting audits of recipients of grants under chap18 ter 241. 

19 (3) CONSULTATION.— 

20 (A) IN GENERAL.—In carrying out the duties described in this 

21 subsection, the Associate Administrator for Small Business Devel22 opment Centers shall confer with and seek the advice of the Na23 tional Small Business Development Center Advisory Board and 

24 Administration officials in areas served by the small business de25 velopment centers. 

26 (B) RESPONSIBILITY.—Notwithstanding subparagraph (A), the 

27 Associate Administrator shall be responsible for the management 

28 and administration of the program and shall not be subject to the 

29 approval or concurrence of Administration officials described in 

30 subparagraph (A). 

31 § 10305. Personnel 

32 (a) IN GENERAL.—The Administrator may, subject to the civil service 

33 and classification laws— 

34 (1) select, employ, appoint, and fix the compensation of such officers, 

35 employees, attorneys, and agents as are necessary to carry out this 

36 title; 

37 (2) define their authority and duties; and 

38 (3) pay the costs of qualification of certain of them as notaries pub39 lic. 

40 (b) INDIVIDUALS EMPLOYED TO RENDER TEMPORARY SERVICES IN

41 CONNECTION WITH A DISASTER.— 


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1 (1) IN GENERAL.—The Administrator may pay the transportation 

2 expenses and per diem in lieu of subsistence expenses, in accordance 

3 with subchapter I of chapter 57 of title 5, for travel of any individual 

4 employed by the Administration to render temporary services not in ex5 cess of 6 months in connection with a disaster from place of appoint6 ment to, and while at, the disaster area and any other temporary posts 

7 of duty and return on completion of the assignment. 

8 (2) EXTENSION OF TERM.—The Administrator may extend the six9 month limitation under paragraph (1) for an additional 6 months if the 

10 Administrator determines that the extension is necessary to continue 

11 efficient disaster loan making activities. 

12 (c) EXPERTS AND CONSULTANTS.— 

13 (1) IN GENERAL.—To such extent as the Administrator finds nec14 essary to carry out this title, the Administrator may procure the tem15 porary (not in excess of one year) or intermittent services of experts 

16 or consultants (including stenographic reporting services) by contract 

17 or appointment. 

18 (2) INAPPLICABILITY OF OTHER LAW.—Service procured under para19 graph (1)— 

20 (A) shall be without regard to the civil service and classification 

21 laws; and 

22 (B) except in the case of stenographic reporting services by an 

23 organization, shall be without regard to section 3709 of the Re24 vised Statutes (41 U.S.C. 5). 

25 (3) COMPENSATION.—An individual employed under paragraph 

26 (1)— 

27 (A) may be compensated at a rate not in excess of the daily 

28 equivalent of the maximum rate payable under section 5376 of 

29 title 5, including travel time; and 

30 (B) while away from the individual’s home or regular place of 

31 business, may be allowed travel expenses (including per diem in 

32 lieu of subsistence) as authorized by section 5703 of title 5. 

33 § 10306. Small Business Investment Division 

34 (a) ESTABLISHMENT.—There is established in the Administration a divi35 sion to be known as the Small Business Investment Division. 

36 (b) ASSOCIATE ADMINISTRATOR.—The Small Business Investment Divi37 sion shall be headed by an Associate Administrator appointed by the Admin38 istrator. 

39 (c) COMPENSATION.—The Associate Administrator shall receive com40 pensation at the rate provided by law for other Associate Administrators of 

41 the Administration. 


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1 § 10307. Office of Advocacy 

2 (a) DEFINITIONS.—In this section: 

3 (1) CHIEF COUNSEL.—The term ‘‘Chief Counsel’’ means the Chief 

4 Counsel for Advocacy appointed under subsection (c). 

5 (2) OFFICE.—The term ‘‘Office’’ means the Office of Advocacy es6 tablished by subsection (b). 

7 (b) ESTABLISHMENT.—There is established within the Administration an 

8 Office of Advocacy. 

9 (c) CHIEF COUNSEL FOR ADVOCACY.—The management of the Office 

10 shall be vested in a Chief Counsel for Advocacy, who shall be appointed 

11 from civilian life by the President, by and with the advice and consent of 

12 the Senate. 

13 (d) PRIMARY FUNCTIONS.—The primary functions of the Chief Counsel 

14 shall be to— 

15 (1) examine the role of small business in the American economy and 

16 the contribution that small business can make in improving competi17 tion, encouraging economic and social mobility for all citizens, restrain18 ing inflation, spurring production, expanding employment opportuni19 ties, increasing productivity, promoting exports, stimulating innovation 

20 and entrepreneurship, and providing an avenue through which new and 

21 untested products and services can be brought to the marketplace; 

22 (2) assess the effectiveness of Federal subsidy and assistance pro23 grams for small business and the desirability of reducing the emphasis 

24 on such programs and increasing the emphasis on general assistance 

25 programs designed to benefit all small business concerns; 

26 (3)(A) measure the direct costs and other effects of government reg27 ulation on small business concerns; and 

28 (B) make legislative and nonlegislative proposals for eliminating ex29 cessive or unnecessary regulation of small business concerns; 

30 (4) determine the impact of the tax structure on small business con31 cerns and make legislative and other proposals for altering the tax 

32 structure to enable all small business concerns to realize their potential 

33 for contributing to the improvement of the Nation’s economic well34 being; 

35 (5) study the ability of financial markets and institutions to meet 

36 small business credit needs and determine the impact of government 

37 demands for credit on small business concerns; 

38 (6) determine financial resource availability and recommend methods 

39 for delivery of financial assistance to minority enterprises, including 

40 methods for— 

41 (A) securing equity capital; 


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1 (B) generating markets for goods and services; 

2 (C) providing effective business education, more effective man3 agement and technical assistance, and training; and 

4 (D) providing assistance in complying with Federal, State, and 

5 local law; 

6 (7) evaluate the efforts of Federal agencies, business, and industry 

7 to assist minority business concerns; 

8 (8) make such recommendations as may be appropriate to assist the 

9 development and strengthening of minority and other small business 

10 concerns; 

11 (9)(A) recommend specific measures for creating an environment in 

12 which all businesses will have the opportunity to compete effectively 

13 and expand to their full potential; and 

14 (B) ascertain the common reasons, if any, for small business suc15 cesses and failures; 

16 (10)(A) determine the desirability of developing a set of rational, ob17 jective criteria to be used to define small business; and 

18 (B) develop such criteria, if appropriate; and 

19 (11)(A) evaluate the efforts of each Federal agency, and of private 

20 industry, to assist small business concerns owned and controlled by vet21 erans and small business concerns owned and controlled by service-dis22 abled veterans; 

23 (B) provide statistical information on the use of such programs by 

24 small business concerns owned and controlled by veterans and small 

25 business concerns owned and controlled by service-disabled veterans; 

26 and 

27 (C) make appropriate recommendations to the Administrator and to 

28 Congress to promote the establishment and growth of small business 

29 concerns owned and controlled by veterans and small business concerns 

30 owned and controlled by service-disabled veterans. 

31 (e) DUTIES TO BE PERFORMED ON A CONTINUING BASIS.— 

32 (1) IN GENERAL.—The Chief Counsel shall perform the duties de33 scribed in this subsection on a continuing basis. 

34 (2) COMPLAINTS, CRITICISMS, AND SUGGESTIONS.—The Chief Coun35 sel shall serve as a focal point for the receipt of complaints, criticisms, 

36 and suggestions concerning the policies and activities of the Adminis37 tration and any other Federal agency that affects small business con38 cerns. 

39 (3) COUNSELING.—The Chief Counsel shall counsel small business 

40 concerns on how to resolve questions and problems concerning the rela41 tionship of the small business to the Federal Government. 


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1 (4) PROPOSALS FOR CHANGE.—The Chief Counsel shall— 

2 (A) develop proposals for changes in the policies and activities 

3 of any Federal agency that will better fulfill the purposes of sub4 title II; and 

5 (B) communicate the proposals to the appropriate Federal agen6 cies. 

7 (5) REPRESENTATION OF VIEWS AND INTERESTS.—The Chief Coun8 sel shall represent the views and interests of small business concerns 

9 before other Federal agencies the policies and activities of which may 

10 affect small business. 

11 (6) DISSEMINATION OF INFORMATION.—The Chief Counsel shall en12 list the cooperation and assistance of public and private agencies, busi13 nesses, and other organizations in disseminating— 

14 (A) information about the programs and services provided by 

15 the Federal Government that are of benefit to small business con16 cerns; and 

17 (B) information on how small business concerns can participate 

18 in or make use of those programs and services. 

19 (f) RURAL TOURISM TRAINING PROGRAM.—In conjunction with the Of20 fice of Rural Affairs and appropriate personnel designated by each district 

21 office of the Administration, the Chief Counsel shall conduct training ses22 sions on the types of Federal assistance available for the development of 

23 rural small business concerns engaged in tourism and tourism-related activi24 ties. 

25 (g) POWERS.—In carrying out this section, the Chief Counsel may— 

26 (1) employ and fix the compensation of such additional staff per27 sonnel as the Chief Counsel considers necessary, without regard to the 

28 provisions of title 5, governing appointments in the competitive service, 

29 and without regard to chapter 51 or subchapter III of chapter 53 of 

30 that title relating to classification and General Schedule pay rates but 

31 at rates not in excess of the lowest rate for GS–15 of the General 

32 Schedule, except that not more than 14 staff personnel at any one time 

33 may be employed and compensated at a rate not in excess of GS–15, 

34 step 10, of the General Schedule; 

35 (2) procure temporary and intermittent services to the same extent 

36 as is authorized by section 3109 of title 5; 

37 (3) consult— 

38 (A) with experts and authorities in the fields of small business 

39 investment, venture capital, and investment and commercial bank40 ing and with other comparable lending institutions involved in the 

41 financing of business; 


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1 (B) with individuals with regulatory, legal, economic, or finan2 cial expertise, including members of the academic community; and 

3 (C) with individuals who generally represent the public interest; 

4 (4)(A) use the services of the National Advisory Council established 

5 under section 10315 of this title; and 

6 (B) in accordance with that section, appoint such other advisory 

7 boards or committees as the Chief Counsel considers reasonably appro8 priate and necessary to carry out this section; and 

9 (5) hold hearings and sit and act at such times and places as the 

10 Chief Counsel considers advisable. 

11 (h) ASSISTANCE OF FEDERAL AGENCIES.—Each Federal agency shall 

12 furnish the Chief Counsel such reports and other information as the Chief 

13 Counsel considers necessary to carry out this section. 

14 (i) REPORTS.—The Chief Counsel may from time to time prepare and 

15 publish such reports as the Chief Counsel considers appropriate. 

16 § 10308. Division of Program Certification and Eligibility 

17 (a) DEFINITIONS.—In this section: 

18 (1) ASSOCIATE ADMINISTRATOR.—The term ‘‘Associate Adminis19 trator’’ means the Associate Administrator for Minority Small Business 

20 and Capital Ownership Development. 

21 (2) DIRECTOR.—The term ‘‘Director’’ means the Director of the Di22 vision. 

23 (3) DIVISION.—The term ‘‘Division’’ means the Division of Program 

24 Certification and Eligibility established by subsection (b). 

25 (b) ESTABLISHMENT.—There is established in the Office of Minority 

26 Small Business and Capital Ownership Development a Division of Program 

27 Certification and Eligibility. 

28 (c) DIRECTOR.—The Division shall be headed by a Director, who shall 

29 report directly to the Associate Administrator. 

30 (d) FIELD OFFICES.—The Director shall establish field offices within 

31 such regional offices of the Administration as are necessary to perform effi32 ciently the functions and responsibilities of the Director. 

33 (e) DUTIES.—The duties of the Director are— 

34 (1) to receive, review, and evaluate applications for certification 

35 under the business development program; 

36 (2) to advise a business development program applicant within 15 

37 days after receipt of an application whether the application is complete 

38 and suitable for evaluation and, if not, what matters must be rectified; 

39 (3) to make recommendations on such applications to the Associate 

40 Administrator; 


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1 (4) to review and evaluate financial statements and other submis2 sions from small business concerns participating in the business devel3 opment program to ascertain continued eligibility to receive sub4 contracts under the business development program; 

5 (5) to make a request for the initiation of termination or graduation 

6 proceedings, as appropriate, to the Associate Administrator; 

7 (6) to make recommendations to the Associate Administrator con8 cerning protests from applicants that are denied admission to the busi9 ness development program; 

10 (7) to decide protests regarding the status of a small business con11 cern as a small business concern owned and controlled by socially and 

12 economically disadvantaged individuals for purposes of any program or 

13 activity conducted under chapter 243 or any other provision of Federal 

14 law that refers to that chapter for a definition of eligibility for any pro15 gram; and 

16 (8) to implement such policy directives as are issued by the Associate 

17 Administrator under section 23326 of this title regarding, among other 

18 things, the geographic distribution of small business concerns to be ad19 mitted to the business development program and the industrial makeup 

20 of those small business concerns. 

21 (f) DECISIONS ON PROTESTS.— 

22 (1) IN GENERAL.—A decision under subsection (e)(7) shall— 

23 (A) be made available to the protestor, the protested party, the 

24 contracting officer (if not the protestor), and all other parties to 

25 the proceeding, and published in full text; and 

26 (B) include findings of fact and conclusions of law, with specific 

27 reasons supporting the findings or conclusions, on each material 

28 issue of fact and law of decisional significance regarding the dis29 position of the protest. 

30 (2) PRECEDENTIAL VALUE OF PRIOR DECISIONS.—A decision under 

31 subsection (e)(7) that was issued before September 4, 1992, shall not 

32 have value as precedent in deciding any subsequent protest until the 

33 decision is published in full text. 

34 § 10309. Office of International Trade 

35 (a) DEFINITION OF OFFICE.—In this section, the term ‘‘Office’’ means 

36 the Office of International Trade. 

37 (b) ESTABLISHMENT OF OFFICE.—There is established within the Ad38 ministration an Office of International Trade, which shall implement the 

39 programs under this section. 

40 (c) DISTRIBUTION NETWORK; MARKETING OF PROGRAMS AND DISSEMI41 NATION OF INFORMATION; BILINGUAL JOB APPLICANTS.— 


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1 (1) IN GENERAL.—The Office, working in close cooperation with the 

2 Department of Commerce and other Federal agencies, small business 

3 development centers engaged in export promotion efforts, regional and 

4 local Administration offices, the small business community, and State 

5 and local export promotion programs, shall— 

6 (A) assist in developing a distribution network for existing trade 

7 promotion, trade finance, trade adjustment, trade remedy assist8 ance and trade data collection programs through use of the Ad9 ministration’s regional and local offices and the small business de10 velopment center network; 

11 (B) assist in the aggressive marketing of the programs de12 scribed in subparagraph (A) and the dissemination of marketing 

13 information, including computerized marketing data, to the small 

14 business community; and 

15 (C) give preference in hiring or approving the transfer of any 

16 employee into the Office or to a position described in subsection 

17 (d)(2)(H) to otherwise qualified applicants who are fluent in a lan18 guage in addition to English. 

19 (2) BILINGUAL EMPLOYEES.—Bilingual employees hired or trans20 ferred under paragraph (1)(C)— 

21 (A) shall accompany foreign trade missions if designated by the 

22 director of the Office; and 

23 (B) shall be available as needed to translate documents, inter24 pret conversations, and facilitate multilingual transactions includ25 ing providing referral lists for translation services if required. 

26 (d) PROMOTION OF SALES OPPORTUNITIES FOR GOODS AND SERVICES

27 ABROAD.— 

28 (1) IN GENERAL.—The Office shall promote sales opportunities for 

29 small business goods and services abroad. 

30 (2) ACTIVITIES.—To accomplish the objective stated in paragraph 

31 (1), the Office shall— 

32 (A) in cooperation with the Department of Commerce, other 

33 Federal agencies, regional and local Administration offices, the 

34 small business development center network, and State programs, 

35 develop a mechanism for— 

36 (i) identifying subsectors of the small business community 

37 with strong export potential; 

38 (ii) identifying areas of demand in foreign markets; 

39 (iii) prescreening foreign buyers for commercial and credit 

40 purposes; and 


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1 (iv) assisting in increasing international marketing by dis2 seminating relevant information regarding market leads, link3 ing potential sellers and buyers, and catalyzing the formation 

4 of joint ventures, where appropriate; 

5 (B) in cooperation with the Department of Commerce, actively 

6 assist small business concerns in the formation and utilization of 

7 export trading companies, export management companies and re8 search and development pools authorized under division H of sub9 title II; 

10 (C) work in conjunction with other Federal agencies, regional 

11 and local offices of the Administration, the small business develop12 ment center network, and the private sector to identify and pub13 licize existing translation services, including those available 

14 through colleges and universities participating in the small busi15 ness development center program; 

16 (D) work closely with the Department of Commerce and other 

17 relevant Federal agencies to— 

18 (i)(I) collect, analyze and periodically update relevant data 

19 regarding the small business share of United States exports 

20 and the nature of State exports (including the production of 

21 Gross State Product figures); and 

22 (II) disseminate those data to the public and to Congress; 

23 (ii) make recommendations to the Secretary of Commerce 

24 and to Congress regarding revision of the North American In25 dustry Classification System codes to encompass industries 

26 currently overlooked and to create North American Industry 

27 Classification System codes for export trading companies and 

28 export management companies; 

29 (iii) improve the utility and accessibility of existing export 

30 promotion programs for small business concerns; and 

31 (iv) increase the accessibility of the Export Trading Com32 pany contact facilitation service of the Department of Com33 merce; 

34 (E) make available to the small business community information 

35 regarding conferences on exporting and international trade spon36 sored by the public and private sectors; 

37 (F) provide small business concerns with access to current and 

38 complete export information by— 

39 (i) making available, at the Administration’s regional of40 fices through cooperation with the Department of Commerce, 


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1 export information, including the worldwide information and 

2 trade system and world trade data reports; 

3 (ii) maintaining a current list of financial institutions that 

4 finance export operations; 

5 (iii) maintaining a current directory of all Federal, re6 gional, State and private sector programs that provide export 

7 information and assistance to small business concerns; and 

8 (iv) preparing and publishing such reports as the Office de9 termines to be necessary concerning market conditions, 

10 sources of financing, export promotion programs, and other 

11 information pertaining to the needs of exporting small busi12 ness concerns so as to ensure that the maximum information 

13 is made available to small business concerns in a readily usa14 ble form; 

15 (G) in cooperation with the Department of Commerce, encour16 age greater participation by small business concerns in trade fairs, 

17 shows, missions, and other domestic and overseas export develop18 ment activities of the Department of Commerce; and 

19 (H) facilitate decentralized delivery of export information and 

20 assistance to small business concerns by— 

21 (i) assigning full-time export development specialists to 

22 each Administration regional office; and 

23 (ii) assigning primary responsibility for export development 

24 to one person in each district office. 

25 (3) DUTIES OF EXPORT DEVELOPMENT SPECIALISTS AND DISTRICT

26 PERSONNEL ASSIGNED PRIMARY RESPONSIBILITY FOR EXPORT DEVEL27 OPMENT.—An export development specialist assigned to an Administra28 tion regional office under paragraph (2)(H)(i) and a person in a dis29 trict assigned primary responsibility for export development shall— 

30 (A) assist small business concerns in obtaining export informa31 tion and assistance from other Federal agencies; 

32 (B) maintain a current directory of all programs that provide 

33 export information and assistance to small business concerns in 

34 the region; 

35 (C) encourage financial institutions to develop and expand pro36 grams for export financing; 

37 (D) provide advice to Administration personnel involved in 

38 granting loans, loan guarantees, and extensions and revolving lines 

39 of credit and providing other forms of assistance to small business 

40 concerns engaged in exporting; and 


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1 (E) within 180 days after being appointed as an export develop2 ment specialist, participate in a training program designed by the 

3 Administrator, in conjunction with the Department of Commerce 

4 and other Federal agencies, to study export programs and to ex5 amine the needs of small business concerns for export information 

6 and assistance. 

7 (e) ACCESS TO EXPORT AND PRE-EXPORT FINANCING PROGRAMS.— 

8 (1) IN GENERAL.—The Office shall work in cooperation with the Ex9 port-Import Bank of the United States, the Department of Commerce, 

10 other Federal agencies, and the States to develop a program through 

11 which export specialists in the regional offices of the Administration, 

12 regional and local loan officers, and small business development center 

13 personnel can facilitate the access of small business concerns to rel14 evant export financing programs of the Export-Import Bank of the 

15 United States and to export and pre-export financing programs avail16 able from the Administration and the private sector. 

17 (2) ACTIVITIES.—To accomplish the goal stated in paragraph (1), 

18 the Office shall work in cooperation with the Export-Import Bank of 

19 the United States and the small business community, including small 

20 business trade associations, to— 

21 (A) aggressively market existing Administration export financ22 ing and pre-export financing programs; 

23 (B) identify financing available under various programs of the 

24 Export-Import Bank of the United States, and aggressively mar25 ket those programs to small business concerns; 

26 (C) assist in the development of financial intermediaries and fa27 cilitate the access of those intermediaries to existing financing pro28 grams; 

29 (D) promote greater participation by private financial institu30 tions, particularly those institutions already participating in loan 

31 programs under subtitle II, in export finance; and 

32 (E) provide for the participation of appropriate Administration 

33 personnel in training programs conducted by the Export-Import 

34 Bank of the United States. 

35 (f) TRADE PROCEEDINGS.—The Office shall— 

36 (1) work in cooperation with other Federal agencies and the private 

37 sector to counsel small business concerns with respect to initiating and 

38 participating in any proceedings relating to the administration of the 

39 United States trade laws; and 

40 (2) work with the Department of Commerce, the Office of the United 

41 States Trade Representative, and the International Trade Commission 


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1 to increase access to trade remedy proceedings for small business con2 cerns. 

3 § 10310. Office of Rural Affairs 

4 (a) DEFINITION OF OFFICE.—In this section, the term ‘‘Office’’ means 

5 the Office of Rural Affairs. 

6 (b) ESTABLISHMENT OF OFFICE.—There is established in the Adminis7 tration an Office of Rural Affairs. 

8 (c) DIRECTOR.—The Office shall be headed by a director appointed by 

9 the Administrator. 

10 (d) FUNCTIONS.—The Office shall— 

11 (1) strive to achieve an equitable distribution of the financial assist12 ance available from the Administration for small business concerns lo13 cated in rural areas; 

14 (2) to the extent practicable, compile annual statistics on rural areas, 

15 including statistics concerning the population, poverty, job creation and 

16 retention, unemployment, business failures, and business startups; 

17 (3) provide information to industries, organizations, and State and 

18 local governments concerning the assistance available to rural small 

19 business concerns through the Administration and through other Fed20 eral agencies; 

21 (4) provide information to industries, organizations, educational in22 stitutions, and State and local governments concerning programs ad23 ministered by private organizations, educational institutions, and Fed24 eral, State, and local governments that improve the economic opportu25 nities of rural citizens; and 

26 (5) work with the United States National Tourism Organization to 

27 assist small business concerns in rural areas with tourism promotion 

28 and development. 

29 § 10311. Office of Women’s Business Ownership 

30 (a) DEFINITIONS.—In this section: 

31 (1) ASSISTANT ADMINISTRATOR.—The term ‘‘Assistant Adminis32 trator’’ means the Assistant Administrator appointed under subsection 

33 (c). 

34 (2) OFFICE.—The term ‘‘Office’’ means the Office of Women’s Busi35 ness ownership established by subsection (b). 

36 (b) ESTABLISHMENT OF OFFICE.—There is established within the Ad37 ministration an Office of Women’s Business Ownership. 

38 (c) ASSISTANT ADMINISTRATOR.— 

39 (1) IN GENERAL.—The Office shall be administered by an Assistant 

40 Administrator, who shall be appointed by the Administrator. 


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1 (2) QUALIFICATION.—The position of Assistant Administrator shall 

2 be a Senior Executive Service position under section 3132(a)(2) of title 

3 5. The Assistant Administrator shall serve as a noncareer appointee (as 

4 defined in section 3132(a)(7) of that title). 

5 (d) DUTIES.—The Assistant Administrator shall— 

6 (1) administer the Administration’s programs for the development of 

7 women’s business enterprises (as defined in section 40301 of this title); 

8 (2) administer the programs and services of the Office to assist 

9 women entrepreneurs in the areas of— 

10 (A) starting and operating a small business concern; 

11 (B) development of management and technical skills; 

12 (C) seeking Federal procurement opportunities; and 

13 (D) increasing the opportunity for access to capital; 

14 (3) administer and manage the women’s business center program; 

15 (4) recommend the annual administrative and program budgets for 

16 the Office (including the budget for the women’s business center pro17 gram); 

18 (5) establish appropriate funding levels for the Office; 

19 (6) review the annual budgets submitted by each applicant for the 

20 women’s business center program; 

21 (7) select applicants to participate in the women’s business center 

22 program; 

23 (8) implement chapter 273; 

24 (9) maintain a clearinghouse to provide for the dissemination and ex25 change of information between women’s business centers; 

26 (10) serve as the vice chairperson of the Interagency Committee on 

27 Women’s Business Enterprise; 

28 (11) serve as liaison for the National Women’s Business Council; 

29 and 

30 (12) advise the Administrator on appointments to the Women’s 

31 Business Council. 

32 (e) CONSULTATION.—In carrying out the duties described in paragraphs 

33 (2) to (12) of subsection (d), the Assistant Administrator shall confer with 

34 and seek the advice of the Administration officials in areas served by the 

35 women’s business centers. 

36 § 10312. Small Business and Agriculture Regulatory En37 forcement Ombudsman; regional small business 

38 regulatory fairness boards 

39 (a) DEFINITIONS.—In this section: 

40 (1) BOARD.—The term ‘‘Board’’ means a regional small business 

41 regulatory fairness board established under subsection (e). 


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1 (2) OMBUDSMAN.—The term ‘‘Ombudsman’’ means the Small Busi2 ness and Agriculture Regulatory Enforcement Ombudsman designated 

3 under subsection (b). 

4 (b) SMALL BUSINESS AND AGRICULTURE REGULATORY ENFORCEMENT

5 OMBUDSMAN.—The Administrator shall designate a Small Business and Ag6 riculture Regulatory Enforcement Ombudsman, who shall report directly to 

7 the Administrator, using personnel of the Administration to the extent prac8 ticable. 

9 (c) DUTIES.—The Ombudsman shall— 

10 (1) work with each Federal agency with regulatory authority over 

11 small business concerns to ensure that small business concerns that re12 ceive or are subject to an audit, on-site inspection, compliance assist13 ance effort, or other enforcement-related communication or contact by 

14 Federal agency personnel are provided with a means by which to com15 ment on the enforcement activity conducted by those personnel; 

16 (2)(A) establish means by which to— 

17 (i) receive comments from a small business concern regarding 

18 actions by Federal agency employees conducting compliance or en19 forcement activities with respect to the small business concern; 

20 and 

21 (ii) refer comments to the Inspector General of the Federal 

22 agency in the appropriate circumstances; and 

23 (B) otherwise seek to maintain the identity of the person and small 

24 business concern making such comments on a confidential basis to the 

25 same extent as employee identities are protected under section 7 of the 

26 Inspector General Act of 1978 (5 U.S.C. App.); 

27 (3) based on substantiated comments received from small business 

28 concerns and the Boards, after having provided each Federal agency 

29 described in paragraph (1) an opportunity to comment on drafts of the 

30 report, annually submit to Congress and those Federal agencies a re31 port that— 

32 (A) evaluates the enforcement activities of Federal agency per33 sonnel; and 

34 (B) includes— 

35 (i) a rating of the responsiveness to small business con36 cerns of the various regional and program offices of each such 

37 Federal agency; and 

38 (ii) a section in which any such Federal agency may make 

39 such comments made by the Federal agency to drafts of the 

40 report as are not addressed by the Ombudsman in the final 

41 draft; and 


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1 (4) coordinate, and annually submit to the Administrator and to the 

2 heads of Federal agencies described in paragraph (1) a report on, the 

3 activities, findings, and recommendations of the Boards. 

4 (d) FEDERAL AGENCIES OTHER THAN THE ADMINISTRATION.— 

5 (1) ACTIONS TO ENSURE COMPLIANCE.—Federal agencies other than 

6 the Administration shall assist the Ombudsman and take actions as 

7 necessary to ensure compliance with this section. 

8 (2) EFFECT OF SECTION.—Nothing in this section replaces or dimin9 ishes the activities of any ombudsman or similar office in any Federal 

10 agency. 

11 (e) REGIONAL SMALL BUSINESS REGULATORY FAIRNESS BOARDS.— 

12 (1) ESTABLISHMENT.—The Administrator shall establish a small 

13 business regulatory fairness board in each regional office of the Admin14 istration. 

15 (2) MEMBERSHIP.— 

16 (A) IN GENERAL.—A Board shall consist of 5 members who are 

17 owners, operators, or officers of small business concerns, ap18 pointed by the Administrator, after receiving the recommendations 

19 of the chair and ranking minority member of the Committee on 

20 Small Business and Entrepreneurship of the Senate and the Com21 mittee on Small Business of the House of Representatives. 

22 (B) POLITICAL AFFILIATION.—Not more than 3 of the members 

23 of a Board shall be of the same political party. 

24 (C) GOVERNMENT OFFICERS OR EMPLOYEES.—No member of a 

25 Board shall be an officer or employee of the Federal Government 

26 in the executive branch or in Congress. 

27 (D) TERM.—A member of a Board shall serve at the pleasure 

28 of the Administrator for a term of 3 years or less. 

29 (E) COMPENSATION.—A member of a Board shall serve without 

30 compensation, except that a member shall be allowed travel ex31 penses, including per diem in lieu of subsistence, at rates author32 ized for employees of agencies under subchapter I of chapter 57 

33 of title 5 while away from the home or regular place of business 

34 of the member in the performance of services for the Board. 

35 (3) CHAIR.—The Administrator shall select a chair from among the 

36 members of a Board, who shall serve at the pleasure of the Adminis37 trator for not more than one year as chair. 

38 (4) QUORUM.—A majority of the members of a Board shall con39 stitute a quorum for the conduct of business, but a lesser number may 

40 hold hearings. 

41 (5) DUTIES.—A Board shall— 


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1 (A) meet at least annually to advise the Ombudsman on matters 

2 of concern to small business concerns relating to the enforcement 

3 activities of Federal agencies; 

4 (B) report to the Ombudsman on substantiated instances of ex5 cessive enforcement actions of Federal agencies against small busi6 ness concerns, including any findings or recommendations of the 

7 Board as to Federal agency enforcement policy or practice; and 

8 (C) prior to publication, provide comment on the annual report 

9 of the Ombudsman prepared under subsection (c). 

10 (6) POWERS.— 

11 (A) HEARINGS; COLLECTION OF INFORMATION.—A Board may 

12 hold hearings and collect information as appropriate for carrying 

13 out this section. 

14 (B) MAIL.—A Board may use the United States mails in the 

15 same manner and under the same conditions as other Federal 

16 agencies. 

17 (C) ACCEPTANCE OF DONATIONS.—A Board may accept dona18 tions of services necessary to conduct its business, so long as the 

19 donations and their sources are disclosed by the Board. 

20 § 10313. Office of Veterans Business Development 

21 (a) DEFINITION OF ASSOCIATE ADMINISTRATOR.—In this section, the 

22 term ‘‘Associate Administrator’’ means the Associate Administrator for Vet23 erans Business Development under section 10304(b) of this title. 

24 (b) OFFICE OF VETERANS BUSINESS DEVELOPMENT.—There is estab25 lished in the Administration an Office of Veterans Business Development, 

26 which shall be administered by the Associate Administrator. 

27 (c) DUTIES.—The Associate Administrator— 

28 (1) shall be responsible for the formulation, execution, and promotion 

29 of policies and programs of the Administration that provide assistance 

30 to small business concerns owned and controlled by veterans and small 

31 business concerns owned and controlled by service-disabled veterans; 

32 and 

33 (2) shall act as an ombudsman for full consideration of veterans in 

34 all programs of the Administration. 

35 § 10314. Task force on purchases from the blind and se36 verely disabled 

37 (a) ESTABLISHMENT.—There is established within the Administration a 

38 task force on purchases from the blind and severely disabled. 

39 (b) MEMBERSHIP.—The task force shall consist of one representative of 

40 the small business community appointed by the Administrator and one indi41 vidual knowledgeable in the affairs of or experienced in the work of shelVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 tered workshops appointed by the Executive Director of the Committee for 

2 Purchase from the Blind and Other Severely Disabled established under the 

3 first section of the Act of June 25, 1938 (41 U.S.C. 46). 

4 (c) DUTIES.—The task force shall meet at least once every 6 months for 

5 the purpose of— 

6 (1) reviewing the award of contracts under section 25103 of this 

7 title; and 

8 (2) recommending to the Administrator such administrative or statu9 tory changes as the task force considers appropriate. 

10 § 10315. Advisory committees 

11 (a) IN GENERAL.—The Administrator shall— 

12 (1) establish such advisory committees as are necessary to achieve 

13 the purposes of this subtitle and subtitles II and III; and 

14 (2) call meetings of the advisory committees from time to time. 

15 (b) EXPENSES.—The Administrator shall— 

16 (1) pay the transportation expenses and a per diem allowance in ac17 cordance with section 5703 of title 5 to a member of an advisory com18 mittee for travel and subsistence expenses incurred at the request of 

19 the Administrator in connection with travel to points more than 50 

20 miles distant from the home of the member in attending a meeting of 

21 the advisory committee; and 

22 (2) rent temporarily, within the District of Columbia or elsewhere, 

23 such hotel or other accommodations as are needed to facilitate the con24 duct of meetings of an advisory committee. 

25 § 10316. Bureau of PCLP Oversight 

26 (a) ESTABLISHMENT.—There is established within the Administration a 

27 bureau to be known as the Bureau of PCLP Oversight. 

28 (b) PURPOSE.—The Bureau of PCLP Oversight shall carry out such 

29 functions of the Administrator under section 33108(c) of this title as the 

30 Administrator may designate. 

31 Subchapter II—Functions 

32 § 10331. General powers 

33 (a) SEAL.—The Administrator shall have power to adopt, alter, and use 

34 a seal, which shall be judicially noticed. 

35 (b) SERVICES AND FACILITIES.—At the request of the Administrator, the 

36 head of any Federal agency or of the Government Accountability Office or 

37 Postal Service may provide to the Administrator (on a reimbursable or non38 reimbursable basis) information, services, facilities (including any field serv39 ice of the Federal agency), officers, and employees of the Federal agency 

40 to assist in carrying out this title or any other law under which the Admin41 istrator provides assistance to small business concerns. 


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1 (c) COURT PROCEEDINGS.—The Administrator may sue and be sued in 

2 any court of record of a State having general jurisdiction, or in any United 

3 States district court, and jurisdiction is conferred on a United States dis4 trict court to determine such controversies without regard to the amount in 

5 controversy; but no attachment, injunction, garnishment, or other similar 

6 process, mesne or final, shall be issued against the Administrator or prop7 erty of the Administration. 

8 (d) LIMITATION ON ADVERTISING REQUIREMENT.—Section 3709 of the 

9 Revised Statutes (41 U.S.C. 5) shall not apply to a contract of hazard in10 surance or a purchase or contract for a service or supply on account of 

11 property obtained by the Administrator as a result of a loan made under 

12 this subtitle or subtitle II or III if the premium for the insurance or the 

13 amount of the purchase or contract does not exceed $1,000. 

14 (e) REGULATIONS.—The Administrator may prescribe such regulations as 

15 the Administrator considers necessary to carry out the authority vested in 

16 the Administrator under this subtitle and subtitles II and III. 

17 (f) ACCEPTANCE OF SERVICES AND FACILITIES.—The Administrator 

18 may— 

19 (1) accept the services and facilities of Federal, State, and local 

20 agencies and groups, both public and private; and 

21 (2) use such gratuitous services and facilities as may from time to 

22 time be necessary to further the objectives of the disaster assistance 

23 programs. 

24 (g) INVESTIGATIONS.— 

25 (1) IN GENERAL.—The Administrator may make such investigations 

26 as the Administrator considers necessary to determine whether a recipi27 ent of or participant in assistance under this subtitle or subtitle II or 

28 III or any other person has engaged or is about to engage in any act 

29 or practice that constitutes or will constitute a violation of any provi30 sion of this subtitle or subtitle II or III (including a regulation or order 

31 issued under this subtitle or subtitle II or III). 

32 (2) STATEMENTS.—The Administrator shall permit any person to 

33 file with the Administrator a statement in writing, under oath or other34 wise as the Administrator shall determine, as to all the facts and cir35 cumstances concerning a matter to be investigated. 

36 (3) POWERS.—For the purpose of any investigation, the Administra37 tion may administer oaths and affirmations, subpoena witnesses, com38 pel the attendance of witnesses, take evidence, and require the produc39 tion of any records that are relevant to the inquiry. Attendance of wit40 nesses and the production of any such records may be required from 

41 any place in the United States. 


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1 (4) CONTUMACY OR REFUSAL TO OBEY.— 

2 (A) IN GENERAL.—In case of contumacy by, or refusal to obey 

3 a subpoena issued to, any person (including a recipient or partici4 pant), the Administrator may invoke the aid of any court of the 

5 United States within the jurisdiction of which an investigation or 

6 proceeding is carried on, or in which the person resides or carries 

7 on business, in requiring the attendance and testimony of wit8 nesses and the production of records, and the court may issue an 

9 order requiring the person to appear before the Administrator, to 

10 produce records, if so ordered, or to give testimony touching the 

11 matter under investigation. 

12 (B) FAILURE TO OBEY.—A failure to obey an order under sub13 paragraph (A) may be punished by the court as a contempt of 

14 court, for which purpose process may be served in any judicial dis15 trict of which the person is an inhabitant or in which the person 

16 may be found. 

17 (h) EXAMINATION AND REVIEW FEES.— 

18 (1) IN GENERAL.—The Administrator may require a lender author19 ized to make loans under the general business loan program, the dis20 aster loan program, or the microloan program to pay examination and 

21 review fees. 

22 (2) USE.—Fees collected under paragraph (1) shall be deposited in 

23 the account for salaries and expenses of the Administrator and shall 

24 be available for the costs of examinations, reviews, and other lender 

25 oversight activities. 

26 (i) LOAN REQUIREMENTS RELATING TO ASSISTANCE PROVIDED TO LOAN

27 APPLICANTS, NONEMPLOYMENT OF PERSONS ASSOCIATED WITH THE AD28 MINISTRATION, AND LOAN APPLICATIONS.—No loan shall be made or equip29 ment, facilities, or services furnished by the Administrator under this sub30 title or subtitle II or III to any business concern unless the owners, part31 ners, or officers of the business concern— 

32 (1) certify to the Administrator— 

33 (A) the names of any attorneys, agents, or other persons en34 gaged by or on behalf of the business concern for the purpose of 

35 expediting applications made to the Administrator for assistance 

36 of any sort; and 

37 (B) the amount of fees paid or to be paid to any such persons; 

38 (2) execute an agreement binding the business concern, for a period 

39 of 2 years after any assistance is rendered by the Administrator to the 

40 business concern, to refrain from employing, tendering any office or 

41 employment to, or retaining for professional services any individual 


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1 who, on the date on which any part of the assistance was rendered, 

2 or within one year prior to that date, served as an officer, attorney, 

3 agent, or employee of the Administrator occupying a position or engag4 ing in an activity that, as determined by the Administrator, involves 

5 the exercise of discretion with respect to the granting of assistance 

6 under this subtitle or subtitle II or III; and 

7 (3) furnish— 

8 (A) the names of lending institutions to which the business con9 cern has applied for a loan; and 

10 (B) the date, amount, terms, and proof of refusal of any loan. 

11 (j) AUTHORITY RELATING TO TRANSFER OF FUNCTIONS, POWERS, AND

12 DUTIES.—The President may— 

13 (1) transfer to the Administrator any function, power, or duty of any 

14 Federal agency that relates primarily to small business problems; and 

15 (2) in connection with the transfer, provide for appropriate transfers 

16 of records, property, necessary personnel, and unexpended balances of 

17 appropriations and other funds available to the Federal agency from 

18 which the transfer is made. 

19 (k) FAIR CHARGES; RECOVERY OF DIRECT COSTS.—To the fullest extent 

20 that the Administrator considers practicable, the Administrator shall— 

21 (1) make a fair charge for the use of Government-owned property; 

22 and 

23 (2) make and let contracts on a basis that will result in a recovery 

24 of the direct costs incurred by the Administrator. 

25 (l) NONDUPLICATION OF WORK OR ACTIVITY.—The Administrator shall 

26 not duplicate the work or activity of any other Federal agency unless such 

27 work or activity is expressly provided for in this subtitle or subtitle II or 

28 III. 

29 (m) SAFE DEPOSIT BOX RENTALS.—Subsections (a) and (b) of section 

30 3324 of title 31 shall not apply to prepayments of rentals made by the Ad31 ministrator on safe deposit boxes used by the Administrator for the safe32 guarding of instruments held as security for loans or for the safeguarding 

33 of other documents. 

34 (n) NONDISCRIMINATION.—In carrying out the programs administered by 

35 the Administrator, the Administrator shall not discriminate on the basis of 

36 sex or marital status against any small business concern or other person 

37 applying for or receiving assistance from the Administration. 

38 (o) SPECIAL CONSIDERATION TO VETERANS.—In carrying out the pro39 grams administered by the Administrator, the Administrator shall give spe40 cial consideration to veterans and their survivors or dependents. 


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1 (p) PROHIBITION OF USE OF FUNDS FOR INDIVIDUALS NOT LAWFULLY

2 WITHIN UNITED STATES.—None of the funds made available under this 

3 subtitle or subtitle II or III may be used to provide any direct benefit or 

4 assistance to any individual in the United States if the Administrator or the 

5 official to which the funds are made available receives notification that the 

6 individual is not lawfully within the United States. 

7 (q) OBSCENE PRODUCTS AND SERVICES.—Notwithstanding any other 

8 provision of law, the Administrator shall not provide any financial or other 

9 assistance to any business concern or other person engaged in the produc10 tion or distribution of any product or service that has been determined by 

11 a court of competent jurisdiction to be obscene. 

12 (r) GIFTS.—In carrying out the functions of the Administrator under this 

13 subtitle and subtitles II and III and to carry out the activities authorized 

14 by chapter 403, the Administrator may— 

15 (1) accept, in the name of the Administrator, and employ or dispose 

16 of in furtherance of the purposes of this subtitle or subtitle II or III, 

17 any money or property, real, personal, or mixed, tangible, or intangible, 

18 received by gift, devise, bequest, or otherwise; and 

19 (2) accept gratuitous services and facilities. 

20 § 10332. Financial management 

21 (a) ACCOUNTS.— 

22 (1) IN GENERAL.—All repayments of loans, debentures, payments of 

23 interest, and other receipts arising out of transactions entered into by 

24 the Administrator shall be deposited in appropriate accounts as deter25 mined by the Administrator. 

26 (2) BUDGETS.—Business-type budgets for each of the accounts re27 ferred to in paragraph (1) shall be— 

28 (A) submitted to the Committee on Appropriations and Com29 mittee on Small Business and Entrepreneurship of the Senate and 

30 the Committee on Appropriations and Committee on Small Busi31 ness of the House of Representatives; and 

32 (B) enacted in the manner prescribed by sections 9103 and 

33 9104 of title 31 for wholly owned Government corporations. 

34 (3) REPORTS.—As soon as possible after the beginning of each cal35 endar quarter, the Administrator shall submit to the Committee on Ap36 propriations and Committee on Small Business and Entrepreneurship 

37 of the Senate and the Committee on Appropriations and Committee on 

38 Small Business of the House of Representatives a report that describes 

39 the status of each of the accounts referred to in paragraph (1). 

40 (4) ISSUANCE OF NOTES.— 


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1 (A) IN GENERAL.—The Administrator may issue notes to the 

2 Secretary of the Treasury for the purpose of obtaining funds nec3 essary for discharging obligations under, and for authorized ex4 penditures out of, the accounts referred to in paragraph (1). 

5 (B) FORM.—Notes issued under subparagraph (A) shall be in 

6 such form and denominations, have such maturities, and be sub7 ject to such terms and conditions as the Administrator may pre8 scribe with the approval of the Secretary of the Treasury. 

9 (C) INTEREST.—Notes issued under subparagraph (A) shall 

10 bear interest at a rate fixed by the Secretary of the Treasury, tak11 ing into consideration the current average market yield of out12 standing marketable obligations of the United States having matu13 rities comparable to those of the notes issued under subparagraph 

14 (A). 

15 (D) PURCHASE BY THE SECRETARY OF THE TREASURY.—The 

16 Secretary of the Treasury shall purchase any notes of the Admin17 istration issued under subparagraph (A), and for that purpose the 

18 Secretary of the Treasury may use as a public debt transaction 

19 the proceeds from the sale of any securities issued under chapter 

20 31 of title 31, and the purposes for which such securities may be 

21 issued under that chapter are extended to include the purchase of 

22 notes issued under subparagraph (A). 

23 (E) TREATMENT AS PUBLIC DEBT TRANSACTIONS.—All redemp24 tions, purchases, and sales by the Secretary of the Treasury of 

25 notes issued under subparagraph (A) shall be treated as public 

26 debt transactions of the United States. 

27 (F) BORROWING AUTHORITY SUBJECT TO AVAILABILITY OF AP28 PROPRIATIONS.—All borrowing authority contained in this para29 graph shall be effective only to such extent or in such amounts 

30 as are provided in advance in appropriation Acts. 

31 (5) UNNEEDED AMOUNTS.—Amounts in an account referred to in 

32 paragraph (1) that are not needed for current operations may be paid 

33 into miscellaneous receipts of the Treasury. 

34 (6) INTEREST.— 

35 (A) ACTUAL INTEREST COLLECTED.—Following the close of 

36 each fiscal year, the Administrator shall pay into the miscellaneous 

37 receipts of the United States Treasury the actual interest that the 

38 Administration collects during that fiscal year on all financings 

39 made under subtitle II. 

40 (B) INTEREST RECEIVED ON FINANCING FUNCTIONS.— 


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1 (i) IN GENERAL.—Except on loan disbursements on which 

2 interest is paid under subparagraph (A), following the close 

3 of each fiscal year, the Administrator shall pay into miscella4 neous receipts of the Treasury interest received by the Ad5 ministration on financing functions performed under this sub6 title, subtitle II, and divisions B and C of subtitle III if the 

7 capital used to perform those functions originates from ap8 propriated funds. 

9 (ii) TREATMENT.—Payments under clause (i) shall be 

10 treated by the Department of the Treasury as interest in11 come, not as retirement of indebtedness. 

12 (7) CONTRIBUTIONS TO EMPLOYEES’ COMPENSATION FUNDS.— 

13 (A) IN GENERAL.—The Administrator shall contribute to the 

14 employees’ compensation fund, on the basis of annual billings as 

15 determined by the Secretary of Labor, for the benefit payments 

16 made from the fund on account of employees engaged in carrying 

17 out functions financed under the accounts described in paragraph 

18 (1). 

19 (B) STATEMENT OF COST.—The annual billings shall include a 

20 statement of the fair portion of the cost of the administration of 

21 the employees’ compensation fund, which shall be paid by the Ad22 ministrator into the Treasury as miscellaneous receipts. 

23 (b) FINANCIAL MANAGEMENT POWERS.— 

24 (1) DISPOSITION OF EVIDENCE OF DEBT, CONTRACT, CLAIM, PER25 SONAL PROPERTY, OR SECURITY.—Under regulations prescribed by the 

26 Administrator, the Administrator may— 

27 (A) assign or sell at public or private sale, or otherwise dispose 

28 of for cash or credit, in the discretion of the Administrator and 

29 on such terms and conditions and for such consideration as the 

30 Administrator determines to be reasonable, any evidence of debt, 

31 contract, claim, personal property, or security assigned to or held 

32 by the Administrator in connection with the payment of loans 

33 granted under subtitle II or III; and 

34 (B) collect or compromise all obligations assigned to or held by 

35 the Administrator and all legal or equitable rights accruing to the 

36 Administrator in connection with the payment of such loans until 

37 such time as such obligations may be referred to the Attorney 

38 General for suit or collection. 

39 (2) ADMINISTRATION MONEYS.— 


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1 (A) DEPOSIT IN TREASURY.—All moneys of the Administration 

2 not otherwise employed may be deposited in the Treasury subject 

3 to check by authority of the Administrator. 

4 (B) FEDERAL RESERVE BANKS.— 

5 (i) IN GENERAL.—The Federal Reserve banks shall act as 

6 depositaries, custodians, and fiscal agents for the Administra7 tion in the general performance of its powers under this sub8 title and subtitles II and III. 

9 (ii) REIMBURSEMENT.—A Federal Reserve bank, when des10 ignated by the Administrator as fiscal agent for the Adminis11 tration, shall be entitled to be reimbursed for all expenses in12 curred as fiscal agent. 

13 (C) BANKS INSURED BY FDIC.—A bank insured by the Federal 

14 Deposit Insurance Corporation, when designated by the Secretary 

15 of the Treasury, shall act as custodian and financial agent for the 

16 Administration. 

17 (3) REAL PROPERTY.— 

18 (A) CONVEYANCE.—The power to convey and to execute in the 

19 name of the Administrator a deed of conveyance, deed of release, 

20 assignment and satisfaction of mortgages, or any other written in21 strument relating to real property or any interest in real property 

22 acquired by the Administrator under this subtitle or subtitle II or 

23 III may be exercised— 

24 (i) by the Administrator; or 

25 (ii) by any officer or agent appointed by the Administrator, 

26 with or without the execution of an express delegation of 

27 power or power of attorney. 

28 (B) OTHER AUTHORITY.—The Administrator may deal with, 

29 complete, renovate, improve, modernize, insure, or rent, or sell for 

30 cash or credit, on such terms and conditions and for such consid31 eration as the Administrator determines to be reasonable, any real 

32 property conveyed to or otherwise acquired by the Administrator 

33 in connection with the payment of loans granted under subtitle II 

34 or III. 

35 (4) COLLECTIONS.— 

36 (A) IN GENERAL.—The Administrator may pursue to final col37 lection, by way of compromise or otherwise, all claims against 

38 third parties assigned to the Administrator in connection with 

39 loans made by the Administrator. 


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1 (B) DEFICIENCY JUDGMENTS.—The authority under subpara2 graph (A) includes authority to obtain a deficiency judgment or 

3 otherwise in the case of a mortgage assigned to the Administrator. 

4 (5) ACQUISITION OF PROPERTY.—The Administrator may acquire, in 

5 any lawful manner, any property (real, personal, or mixed, tangible or 

6 intangible), when the Administrator considers it necessary or appro7 priate to the conduct of the general business loan program and disaster 

8 assistance programs. 

9 (6) ASSET SALES.—In connection with the Administrator’s imple10 mentation of a program to sell to the private sector loans and other 

11 assets held by the Administrator, the Administrator shall provide to the 

12 Committee on Small Business and Entrepreneurship of the Senate and 

13 the Committee on Small Business of the House of Representatives a 

14 copy of the draft and final plans describing the sale and the anticipated 

15 benefits resulting from the sale. 

16 (c) SALE OF GUARANTEED PORTION OF LOAN BY LENDER OR SUBSE17 QUENT HOLDER.— 

18 (1) IN GENERAL.—The guaranteed portion of a loan made under 

19 subtitle II or III may be sold by the lender, and by any subsequent 

20 holder, consistent with regulations prescribed by the Administrator, 

21 subject to the limitations stated in paragraph (2). 

22 (2) LIMITATIONS.— 

23 (A) APPROVAL.—Before the Administrator approves a sale or 

24 resale under paragraph (1), if the lender certifies that the loan has 

25 been properly closed and that the lender has substantially com26 plied with the guarantee agreement and the regulations of the Ad27 ministrator, the Administrator shall review and approve only mate28 rials not previously approved. 

29 (B) FEES.—All fees due the Administrator on a guaranteed 

30 loan shall be paid in full prior to a sale or resale under paragraph 

31 (1). 

32 (C) DISBURSEMENT.—A loan (except a loan made under section 

33 20508 of this title) shall be fully disbursed to the borrower before 

34 a sale or resale under paragraph (1). 

35 (3) CONTINUING OBLIGATION.—After a loan is sold, the lender shall 

36 remain obligated under its guarantee agreement with the Administrator 

37 and shall continue to service the loan in a manner consistent with the 

38 terms and conditions of the guarantee agreement. 

39 (4) SECONDARY MARKET.— 

40 (A) PROCEDURES.—The Administrator shall develop such pro41 cedures as are necessary for— 


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1 (i) the facilitation, administration, and promotion of sec2 ondary market operations; and 

3 (ii) assessing the increase of small business access to cap4 ital at reasonable rates and terms as a result of secondary 

5 market operations. 

6 (B) UNIFORM REGULATIONS.—The sale of the unguaranteed 

7 portion of a loan made under the general business loan program 

8 shall not be permitted except in accordance with a regulation pre9 scribed by the Administrator that— 

10 (i) applies uniformly to both depository institutions and 

11 other lenders; and 

12 (ii) specifies the terms and conditions under which such 

13 sales can be permitted, including maintenance of appropriate 

14 reserve requirements and other safeguards to protect the 

15 safety and soundness of the program. 

16 (C) LONG-TERM VIABILITY.—The Administrator shall take such 

17 actions in the awarding of contracts as the Administrator con18 siders necessary to ensure the continued long-term viability of the 

19 secondary market in loans, debentures, and other securities guar20 anteed by the Administrator. 

21 (5) EFFECT OF SUBSECTIONS.—Nothing in this subsection or sub22 section (d) impedes or extinguishes— 

23 (A) the right of a borrower or a successor in interest to a bor24 rower to prepay (in whole or in part) a loan made under the gen25 eral business loan program, the guaranteed portion of which may 

26 be included in a trust or pool; or 

27 (B) the rights of any person under subsection (i). 

28 (d) TRUST CERTIFICATES.— 

29 (1) IN GENERAL.—The Administrator may issue trust certificates 

30 representing ownership of all or a fractional part of the guaranteed 

31 portion of one or more loans guaranteed by the Administrator under 

32 subtitle II or section 33103 of this title. 

33 (2) TRUST OR POOL.—A trust certificate shall be based on and 

34 backed by a trust or pool approved by the Administrator and composed 

35 solely of the entire guaranteed portion of a loan. 

36 (3) GUARANTEE.— 

37 (A) IN GENERAL.—The Administrator, on such terms and con38 ditions as the Administrator considers appropriate, may guarantee 

39 the timely payment of the principal of and interest on trust certifi40 cates issued by the Administrator or an agent of the Adminis41 trator for purposes of this subsection. 


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1 (B) LIMIT.— 

2 (i) IN GENERAL.—A guarantee under subparagraph (A) 

3 shall be limited to the extent of principal and interest on the 

4 guaranteed portion of the loan or loans that compose the 

5 trust or pool. 

6 (ii) PREPAYMENT.—If a loan in a trust or pool is prepaid, 

7 either voluntarily or in the event of default, the guarantee of 

8 timely payment of principal and interest on the trust certifi9 cate shall be reduced in proportion to the amount of principal 

10 and interest that the prepaid loan represents in the trust or 

11 pool. 

12 (iii) INTEREST.—Interest on prepaid or defaulted loans 

13 shall accrue and be guaranteed by the Administrator only 

14 through the date of payment on the guarantee. 

15 (iv) CALL.—During the term of a trust certificate, the 

16 trust certificate may be called for redemption due to prepay17 ment or default of all loans constituting the trust or pool. 

18 (4) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full 

19 faith and credit of the United States is pledged to the payment of all 

20 amounts that may be required to be paid under any guarantee of a 

21 trust certificate issued by the Administration or its agent under this 

22 subsection. 

23 (5) FEES.— 

24 (A) IN GENERAL.—The Administrator may impose a fee for a 

25 loan guarantee sold into the secondary market under subsection 

26 (c) in an amount equal to not more than 50 percent of the portion 

27 of the sale price that exceeds 110 percent of the outstanding prin28 cipal amount of the portion of the loan guaranteed by the Admin29 istrator. 

30 (B) COLLECTION; USE.—A fee under subparagraph (A)— 

31 (i) shall be collected by the Administrator or by the agent 

32 that carries out on behalf of the Administrator the central 

33 registration functions required by subsection (e); and 

34 (ii) shall be paid to the Administrator and used solely to 

35 reduce the subsidy on loans guaranteed under the general 

36 business loan program. 

37 (C) NO CHARGE TO BORROWER.—A fee under subparagraph (A) 

38 shall not be charged to the borrower under the loan that is guar39 anteed. 

40 (D) NO PRECLUSION.—Nothing in this paragraph precludes an 

41 agent of the Administrator from collecting a fee approved by the 


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1 Administrator for the functions described in subsection 

2 (e)(2)(A)(ii). 

3 (E) PENALTY.—The Administrator may impose and collect, di4 rectly or through a fiscal and transfer agent, a reasonable penalty 

5 on late payment of a fee under subparagraph (A) in an amount 

6 not to exceed 5 percent of the fee per month plus interest. 

7 (F) AGENTS.— 

8 (i) IN GENERAL.—The Administrator may contract with an 

9 agent to carry out, on behalf of the Administration, the as10 sessment and collection of the annual fee established under 

11 section 20314 of this title. 

12 (ii) COMPENSATION.—An agent may receive, as compensa13 tion for services, any interest earned on the fee while in the 

14 control of the agent before the time at which the agent is con15 tractually required to remit the fee to the Administrator. 

16 (6) SUBROGATION.—If the Administrator pays a claim under a guar17 antee issued under this subsection, the Administrator shall be sub18 rogated fully to the rights satisfied by the payment. 

19 (7) EXERCISE OF OWNERSHIP RIGHTS.—No Federal, State, or local 

20 law shall preclude or limit the exercise by the Administration of its 

21 ownership rights in the portions of loans constituting the trust or pool 

22 against which a trust certificate is issued. 

23 (e) CENTRAL REGISTRATION OF LOANS AND TRUST CERTIFICATES.— 

24 (1) DEFINITION OF SELLER.—In this subsection, the term ‘‘seller’’, 

25 with respect to a sale of a loan, does not include— 

26 (A) an entity that made the loan; or 

27 (B) an individual or entity that sells 3 or fewer guaranteed 

28 loans per year. 

29 (2) IN GENERAL.—Under regulations prescribed by the Adminis30 trator— 

31 (A) the Administrator shall— 

32 (i) provide for a central registration of all loans and trust 

33 certificates sold under subsections (c) and (d); 

34 (ii) contract with an agent to carry out on behalf of the 

35 Administrator the central registration functions of this sec36 tion and the issuance of trust certificates to facilitate pooling; 

37 and 

38 (iii) prior to any sale, require the seller to disclose to a pur39 chaser of the guaranteed portion of a loan guaranteed under 

40 subtitle II and to the purchaser of a trust certificate issued 


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1 under subsection (d) information on the terms, conditions, 

2 and yield of the instrument to be sold; and 

3 (B) the Administrator may regulate brokers and dealers in 

4 guaranteed loans and trust certificates sold under subsections (c) 

5 and (d). 

6 (3) AGENT.—An agent described in paragraph (2)(A)(ii)— 

7 (A) shall provide a fidelity bond or insurance in such amounts 

8 as the Administrator determines to be necessary to fully protect 

9 the interest of the Government; and 

10 (B) may be compensated through any of the fees assessed under 

11 this section and any interest earned on any funds collected by the 

12 agent while the funds are in the control of the agent and before 

13 the time at which the agent is contractually required to transfer 

14 the funds to the Administrator or to the holders of the trust cer15 tificates, as appropriate. 

16 (4) FORM OF REGISTRATION.— 

17 (A) IN GENERAL.—This subsection does not preclude the use of 

18 a book-entry or other electronic form of registration for trust cer19 tificates. 

20 (B) BOOK-ENTRY SYSTEM.—The Administration may, with the 

21 consent of the Secretary of the Treasury, use the book-entry sys22 tem of the Federal Reserve System. 

23 (f) ACTION DEALING WITH OR REALIZING ON LOAN.— 

24 (1) IN GENERAL.—In addition to exercising any power, function, 

25 privilege, or immunity vested in the Administrator by any other provi26 sion of law, the Administrator may take any and all actions (including 

27 the procurement of the services of an attorney by contract in any office 

28 in which an attorney is not or cannot be economically employed full 

29 time to render such services) if the Administrator determines that such 

30 action is necessary or desirable in making, servicing, compromising, 

31 modifying, liquidating, or otherwise dealing with or realizing on a loan 

32 made under subtitle II or III. 

33 (2) DEFERRED PARTICIPATION LOAN.—With respect to a deferred 

34 participation loan, the Administrator may, in the discretion of and pur35 suant to regulations promulgated by the Administrator, authorize a 

36 participating lending institution to take action relating to loan servicing 

37 on behalf of the Administrator, including determining eligibility and 

38 creditworthiness and loan monitoring, collection, and liquidation. 

39 (3) PREFERRED LENDERS PROGRAM.— 

40 (A) IN GENERAL.—Under this subsection, the Administrator 

41 may carry out a preferred lenders program under which a written 


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1 agreement between a lender and the Administrator delegates to 

2 the lender— 

3 (i) complete authority to make and close loans with a guar4 antee from the Administrator without obtaining the prior spe5 cific approval of the Administrator; and 

6 (ii) complete authority to service and liquidate the loans 

7 without obtaining the prior specific approval of the Adminis8 trator for routine servicing and liquidation activities, subject 

9 to the limitation that the lender shall not take any action cre10 ating an actual or apparent conflict of interest. 

11 (B) STANDARD REVIEW PROGRAM.—The Administrator shall 

12 carry out a standard review program under which, on entry into 

13 the preferred lenders program and annually or more frequently 

14 thereafter, each preferred lender’s participation in the preferred 

15 lenders program is assessed, including an assessment of defaults, 

16 loans, and recoveries of loans made by the preferred lender under 

17 the general business loan program. 

18 (g) FEES.— 

19 (1) IN GENERAL.—Except as provided in paragraph (2), the Admin20 istrator may impose, retain, and use only— 

21 (A) fees that are specifically authorized by law; and 

22 (B) fees that were in effect on September 30, 1994, in the 

23 amounts and at the rates in effect on that date. 

24 (2) ADDITIONAL FEES.—The Administrator may, subject to approval 

25 in appropriations Acts, impose, retain, and use, in addition to fees de26 scribed in paragraph (1)— 

27 (A) a fee not exceeding $100 for a loan servicing action (other 

28 than a loan assumption) requested after disbursement of the loan, 

29 including any substitution of collateral, release or substitution of 

30 a guarantor, reamortization, or similar action; 

31 (B) a fee not exceeding $300 for a loan assumption; 

32 (C) a fee not exceeding one percent of the amount of requested 

33 financings under chapter 303 for which the applicant requests a 

34 commitment from the Administration for funding during the fol35 lowing year; and 

36 (D) fees to recover the direct, incremental cost involved in the 

37 production and dissemination of compilations of information pro38 duced by the Administrator under this title. 

39 (3) LIMITATION ON USE.—Amounts collected under this subsection 

40 shall be used solely to facilitate the administration of the program that 

41 generated the excess amounts. 


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1 (h) AMOUNTS COLLECTED BY FISCAL TRANSFER AGENTS.— 

2 (1) IN GENERAL.—The Administrator may collect, retain and use, 

3 subject to approval in appropriations Acts, any amount collected by a 

4 fiscal transfer agent that is not used by the fiscal transfer agent as 

5 payment of the cost of loan pooling or debenture servicing operations. 

6 (2) LIMITATION ON USE.—Amounts collected under this subsection 

7 shall be used solely to facilitate the administration of the program that 

8 generated the excess amounts. 

9 (i) UNDERTAKING OR SUSPENSION OF PAYMENT OBLIGATION.— 

10 (1) DEFINITION OF REQUIRED PAYMENTS.—In this subsection, the 

11 term ‘‘required payment’’, with respect to a loan, means a payment of 

12 principal and interest under the loan. 

13 (2) IN GENERAL.—Subject to the requirements and conditions con14 tained in this subsection, on application by a small business concern 

15 that is the recipient of a loan made under subtitle II or III, the Admin16 istrator may— 

17 (A) undertake the small business concern’s obligation to make 

18 the required payments under the loan; or 

19 (B) if the loan was a direct loan made by the Administrator, 

20 suspend the obligation. 

21 (3) NO REQUIREMENT FOR PAYMENT.—During any period in which 

22 required payments are being made by the Administrator pursuant to 

23 an undertaking of an obligation or in which an obligation is suspended, 

24 no required payment with respect to the loan may be required to be 

25 made by the small business concern. 

26 (4) CONDITIONS.—The Administrator may undertake or suspend for 

27 a period of not to exceed 5 years a small business concern’s obligation 

28 under this subsection only if— 

29 (A) without the undertaking or suspension of the obligation, the 

30 small business concern would, as determined in the sole discretion 

31 of the Administrator, become insolvent or remain insolvent; 

32 (B) with the undertaking or suspension of the obligation, the 

33 small business concern would, as determined in the sole discretion 

34 of the Administrator, become or remain a viable business; and 

35 (C) the small business concern executes an agreement in writing 

36 satisfactory to the Administrator as provided in paragraph (6). 

37 (5) EXTENSION OF TERM.—Notwithstanding section 20309 of this 

38 title, the Administrator may extend the term of a loan on which the 

39 Administrator undertakes or suspends the obligation under this sub40 section for a corresponding period of time. 

41 (6) AGREEMENT; REQUIRED ACTION.— 


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1 (A) AGREEMENT.—Before undertaking or suspending a small 

2 business concern’s obligation under this subsection, the Adminis3 trator, consistent with the purposes of this subsection, shall re4 quire the small business concern to agree in writing to repay to 

5 the Administrator the aggregate amount of the required payments 

6 during the period for which the obligation was undertaken or sus7 pended— 

8 (i) by periodic payments not less in amount or less fre9 quently falling due than those that were due under the loan 

10 during that period; 

11 (ii) pursuant to a repayment schedule agreed on by the Ad12 ministrator and the small business concern; or 

13 (iii) by a combination of the payments described in clauses 

14 (i) and (ii). 

15 (B) REQUIRED ACTION.—In addition to requiring the small 

16 business concern to execute the agreement described in subpara17 graph (A), the Administrator shall, before undertaking or sus18 pending the obligation, take such action, and require the small 

19 business concern to take such action, as the Administrator con20 siders appropriate in the circumstances (including the provision of 

21 such security as the Administrator considers necessary or appro22 priate) to ensure that the rights and interests of the lender will 

23 be safeguarded adequately during and after the period in which 

24 the obligation is undertaken or suspended. 

25 (j) INTEREST RATE ON DEFERRED PARTICIPATION.—On purchase by the 

26 Administrator of a deferred participation entered into under the general 

27 business loan program or disaster loan program, the Administrator may 

28 continue to charge a rate of interest not to exceed that initially charged by 

29 the participating institution on the amount purchased for the remaining 

30 term of the indebtedness. 

31 (k) SUBORDINATION TO CERTAIN STATE TAX LIENS.—Any interest held 

32 by the Administrator in property as security for a loan shall be subordinate 

33 to any lien on the property for taxes due on the property to a State or polit34 ical subdivision of a State in any case in which the lien would, under appli35 cable State law, be superior to that interest if the interest were held by any 

36 party other than the United States. 

37 (l) RISK MANAGEMENT DATABASE.— 

38 (1) ESTABLISHMENT.—The Administrator shall establish, within the 

39 management system for the general business loan program, disaster as40 sistance programs, and certified development company program a man41 agement information system that will generate a database capable of 


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1 providing timely and accurate information in order to identify loan un2 derwriting, collections, recovery, and liquidation problems. 

3 (2) INFORMATION TO BE MAINTAINED.—In addition to such other 

4 information as the Administrator considers appropriate, the database 

5 established under paragraph (1) shall, with respect to each loan pro6 gram described in paragraph (1), include information relating to— 

7 (A) the identity of the institution making the guaranteed loan 

8 or issuing the debenture; 

9 (B) the identity of the borrower; 

10 (C) the total dollar amount of the loan or debenture; 

11 (D) the total dollar amount of Government exposure in each 

12 loan; 

13 (E) the district of the Administration in which the borrower has 

14 its principal office; 

15 (F) the principal line of business of the borrower, as identified 

16 by North American Industry Classification System (or any suc17 cessor to that system) code; 

18 (G) the delinquency rate for each program (including number of 

19 instances and days overdue); 

20 (H) the number and amount of repurchases, losses, and recov21 eries in each program; 

22 (I) the number of deferrals or forbearances in each program (in23 cluding days and number of instances); 

24 (J) comparisons, on the basis of loan program, lender, Adminis25 tration district and region, for all the data elements maintained; 

26 and 

27 (K) underwriting characteristics of each loan that has entered 

28 into default, including term, amount and type of collateral, loan29 to-value and other actual and projected ratios, line of business, 

30 credit history, and type of loan. 

31 § 10333. Small business economic database 

32 (a) IN GENERAL.—The Administrator shall maintain an external small 

33 business economic database for the purpose of providing Congress and the 

34 Administration information on the economic condition and the expansion or 

35 contraction of the small business sector. 

36 (b) ECONOMIC INDICES.—In carrying out subsection (a), the Adminis37 trator shall publish on a regular basis national small business economic indi38 ces and, to the extent feasible, regional small business economic indices that 

39 include data relating to— 

40 (1) employment, layoffs, and new hires; 


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1 (2) number of business establishments and the types of such estab2 lishments such as sole proprietorships, corporations, and partnerships; 

3 (3) number of business formations and failures; 

4 (4) sales and new orders; 

5 (5) back orders; 

6 (6) investment in plant and equipment; 

7 (7) changes in inventory and rate of inventory turnover; 

8 (8) sources and amounts of capital investment, including debt, eq9 uity, and internally generated funds; 

10 (9) debt-to-equity ratios; 

11 (10) exports; 

12 (11) number and dollar amount of mergers and acquisitions by size 

13 of acquiring and acquired firm; and 

14 (12) concentration ratios. 

15 § 10334. Small business computer security and education 

16 program 

17 (a) IN GENERAL.—The Administrator shall establish a small business 

18 computer security and education program to— 

19 (1) provide small business concerns information regarding— 

20 (A) utilization and management of computer technology; 

21 (B) computer crimes committed against small business con22 cerns; and 

23 (C) security for computers owned or utilized by small business 

24 concerns; 

25 (2) provide for periodic forums for small business concerns to im26 prove their knowledge of the matters described in paragraph (1); and 

27 (3) provide training opportunities to educate small business users on 

28 computer security techniques. 

29 (b) INFORMATION AND MATERIALS.—The Administrator, after consulta30 tion with the Director of the National Institute of Standards and Tech31 nology of the Department of Commerce, shall develop information and mate32 rials to carry out the activities described in subsection (a). 

33 § 10335. General policies governing the granting and denial 

34 of applications 

35 The Administrator shall establish general policies (particularly with ref36 erence to the public interest in the granting and denial of applications for 

37 financial assistance by the Administrator and with reference to the coordi38 nation of the functions of the Administration with other activities and poli39 cies of the Government), which shall govern the granting and denial of ap40 plications for financial assistance by the Administrator. 


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1 § 10336. Retention of records 

2 The Administrator and the Inspector General of the Administration 

3 shall— 

4 (1) retain all correspondence, records of inquiries, memoranda, re5 ports, books, and other records, including memoranda as to all inves6 tigations conducted by or for the Administration, for a period of at 

7 least one year after the date of the record; and 

8 (2) at all times keep the records available for inspection and exam9 ination by the Committee on Small Business and Entrepreneurship of 

10 the Senate and the Committee on Small Business of the House of Rep11 resentatives or the authorized representatives of either Committee. 

12 § 10337. Consultation and cooperation with other Federal 

13 agencies 

14 (a) IN GENERAL.—To the extent that the Administrator considers it nec15 essary to protect and preserve small business interests, the Administrator 

16 shall consult and cooperate with other Federal agencies in the formulation 

17 by the Administrator of policies affecting small business concerns. 

18 (b) RESPONSE.—When requested by the Administrator, a Federal agency 

19 shall consult and cooperate with the Administrator in the formulation by the 

20 Federal agency of policies affecting small business concerns to ensure that 

21 small business interests will be recognized, protected, and preserved. 

22 (c) EFFECT OF SECTION.—This section does not require a Federal agen23 cy to consult or cooperate with the Administrator in a case in which the 

24 head of the Federal agency determines that such consultation or cooperation 

25 would unduly delay action that must be taken by the Federal agency to pro26 tect the national interest in an emergency. 

27 § 10338. Representation of status as small business concern 

28 (a) IN GENERAL.—Any representation of the status of any concern or 

29 person as a small business concern, HUBZone small business concern, small 

30 business concern owned and controlled by socially and economically dis31 advantaged individuals, or small business concern owned and controlled by 

32 women in order to obtain any prime contract or subcontract described in 

33 subsection (b) shall be of no effect unless the representation is in writing. 

34 (b) PRIME CONTRACTS AND SUBCONTRACTS.—A prime contract or sub35 contract referred to in subsection (a) is— 

36 (1) a prime contract to be awarded under chapter 251, 253, 261, 

37 or 263; 

38 (2) a subcontract to be awarded under chapter 233; 

39 (3) a subcontract that is to be included as part or all of a goal con40 tained in a subcontracting plan required under section 24303 of this 

41 title; or 


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1 (4) a prime contract or subcontract to be awarded as a result, or 

2 in furtherance, of any other provision of Federal law that specifically 

3 references chapter 243 for a definition of program eligibility. 

4 § 10339. Criminal background checks 

5 Before approval of a loan under the general business loan program or a 

6 debenture guarantee under the certified development company program, the 

7 Administrator may verify the applicant’s criminal background (or lack of 

8 criminal background) through the best available means, including, if pos9 sible, use of the National Crime Information Center computer system at the 

10 Federal Bureau of Investigation. 

11 CHAPTER 105—PENALTIES 

Sec. 

10501. False statement; overvaluation of security. 

10502. Unlawful act by person connected with the Administration. 

10503. Concealment, disposal, or conversion of property. 

10504. Misrepresentation of status as small business concern. 

10505. False certification of past compliance. 

12 § 10501. False statement; overvaluation of security 

13 A person that makes a statement, knowing the statement to be false, or 

14 willfully overvalues a security for the purpose of obtaining for himself or for 

15 any applicant a loan, or a loan extension by renewal, deferment of action, 

16 or otherwise, or the acceptance, release, or substitution of security for a 

17 loan, or for the purpose of influencing in any way the action of the Adminis18 trator, or for the purpose of obtaining money, property, or anything of 

19 value, under this subtitle or subtitle II or III, shall be imprisoned not more 

20 than 2 years, fined not more than $5,000, or both. 

21 § 10502. Unlawful act by person connected with the Admin22 istration 

23 A person connected in any capacity with the Administration that— 

24 (1) embezzles, abstracts, purloins, or willfully misapplies any money, 

25 funds, security, or other thing of value, whether belonging to the Ad26 ministrator or pledged or otherwise entrusted to the Administrator; 

27 (2) with intent to defraud the Administrator or any other body poli28 tic or corporate, or any individual, or to deceive any officer, auditor, 

29 or examiner of the Administration— 

30 (A) makes a false entry in a book, report, or statement of or 

31 to the Administrator; or 

32 (B) without being duly authorized, draws an order or issues, 

33 puts forth, or assigns a note, debenture, bond, or other obligation, 

34 or draft, bill of exchange, mortgage, judgment, or decree of judg35 ment; 

36 (3) with intent to defraud, participates or shares in or receives di37 rectly or indirectly any money, profit, property, or benefit through any 


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1 transaction, loan, commission, contract, or other act of the Adminis2 trator; or 

3 (4)(A) gives any unauthorized information concerning a future action 

4 or plan of the Administrator that might affect the value of a security; 

5 or 

6 (B) having such knowledge, invests or speculates, directly or indi7 rectly, in a security or property of any company or corporation receiv8 ing a loan or other assistance from the Administrator; 

9 shall be imprisoned not more than 5 years, fined not more than $10,000, 

10 or both. 

11 § 10503. Concealment, disposal, or conversion of property 

12 A person that, with intent to defraud, knowingly conceals, removes, dis13 poses of, or converts to the use of that person or any other person any prop14 erty mortgaged or pledged to, or held by, the Administrator— 

15 (1) shall be imprisoned not more than one year, fined not more than 

16 $1,000, or both; or 

17 (2) if the value of the property exceeds $100, shall be imprisoned 

18 not more than 5 years, fined not more than $5,000, or both. 

19 § 10504. Misrepresentation of status as small business con20 cern 

21 (a) OFFENSE.—A person that, in writing, misrepresents the status of a 

22 concern or person as a small business concern, qualified HUBZone small 

23 business concern, small business concern owned and controlled by socially 

24 and economically disadvantaged individuals, or small business concern 

25 owned and controlled by women, in order to obtain for that person or any 

26 other person— 

27 (1) a prime contract to be awarded under chapter 251, 253, 261, 

28 or 263; 

29 (2) a subcontract to be awarded under chapter 233; 

30 (3) a subcontract that is to be included as part or all of a goal con31 tained in a subcontracting plan required under section 24303 of this 

32 title; or 

33 (4) a prime contract or subcontract to be awarded as a result, or 

34 in furtherance, of any other provision of Federal law that specifically 

35 references chapter 243 for a definition of program eligibility; 

36 shall be subject to the penalties described in subsection (b). 

37 (b) PENALTIES.—A person that violates subsection (a)— 

38 (1) shall be imprisoned not more than 10 years, fined not more than 

39 $500,000 or both; 

40 (2) shall be subject to the administrative remedies prescribed by 

41 chapter 38 of title 31; 


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1 (3) shall be subject to suspension and debarment as specified in sub2 part 9.4 of title 48, Code of Federal Regulations (or any successor reg3 ulation) on the basis that the misrepresentation indicates a lack of 

4 business integrity that seriously and directly affects the present respon5 sibility to perform any contract awarded by the Federal Government 

6 or a subcontract under such a contract; and 

7 (4) shall be ineligible for participation in any program or activity 

8 conducted under this subtitle or subtitle II or III for a period not to 

9 exceed 3 years. 

10 § 10505. False certification of past compliance 

11 A person that falsely certifies past compliance with the requirements of 

12 section 23328 of this title— 

13 (1) shall be imprisoned not more than 10 years, fined not more than 

14 $500,000 or both; 

15 (2) shall be subject to the administrative remedies prescribed by 

16 chapter 38 of title 31; 

17 (3) shall be subject to suspension and debarment as specified in sub18 part 9.4 of title 48, Code of Federal Regulations (or any successor reg19 ulation) on the basis that the misrepresentation indicates a lack of 

20 business integrity that seriously and directly affects the present respon21 sibility to perform any contract awarded by the Federal Government 

22 or a subcontract under such a contract; and 

23 (4) shall be ineligible for participation in any program or activity 

24 conducted under this subtitle or subtitle II or III for a period not to 

25 exceed 3 years. 

26 CHAPTER 107—PERIODIC REPORTS 

Sec. 

10701. Comprehensive annual report on the state of small business and on Administration 

operations. 

10702. Annual report on expenditures. 

10703. Annual report on secondary market operations. 

10704. Annual report on impact of authority to impose secondary market fees. 

10705. Annual report on needs of small business concerns owned and controlled by veterans 

and small business concerns owned and controlled by service-disabled veterans. 

10706. Annual report on contract bundling. 

10707. Annual report on business development program. 

10708. Annual report on contract participation goals. 

10709. Annual report on cost savings from breakout procurement center representatives. 

10710. Annual reports on SBIRs, STTRs, and the FAST program. 

10711. Annual report on women’s business center program. 

10712. Annual report of the Office of International Trade. 

10713. Annual report on historical trends of the small business sector. 

10714. Biennial report on accredited lenders program. 

10715. Annual report on premier certified lenders program. 

10716. Annual report on foreclosure and liquidation of loans under the certified development 

company program. 

10717. Reports on disaster assistance. 


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1 § 10701. Comprehensive annual report on the state of small 

2 business and on Administration operations 

3 (a) IN GENERAL.—As soon as practicable each fiscal year, the Adminis4 trator shall submit to the President a comprehensive annual report. 

5 (b) CONTENTS.—A report under subsection (a) shall include— 

6 (1) a description of the state of small business in the Nation as a 

7 whole and in each State; 

8 (2) a description of the operations of the Administration under this 

9 subtitle and subtitle II, including the general lending, disaster relief, 

10 Government regulation relief, procurement and property disposal, re11 search and development, technical assistance, dissemination of data and 

12 information, and other functions under the jurisdiction of the Adminis13 tration during the previous fiscal year; 

14 (3) recommendations— 

15 (A) for strengthening or improving the functions described in 

16 paragraph (2); or 

17 (B) when necessary or desirable to implement more effectively 

18 congressional policies and proposals, for establishing new or alter19 native programs; 

20 (4) the names of the business concerns to which contracts are let 

21 and for which financing is arranged by the Administrator, including the 

22 amounts of the contracts and financings; 

23 (5) the proportion of loans and other assistance under subtitle II and 

24 provided to minority small business concerns, the goals of the Adminis25 trator for the next fiscal year with respect to minority small business 

26 concerns, and recommendations for improving assistance to minority 

27 small business concerns under subtitle II; and 

28 (6)(A) a full and detailed account of operations under subtitle III 

29 that— 

30 (i) discloses the amount of losses sustained by the Government 

31 as a result of such operations during the preceding fiscal year; and 

32 (ii) includes an estimate of the total losses that the Government 

33 can reasonably expect to incur as a result of such operations dur34 ing the then-current fiscal year; 

35 (B) full and detailed accounts relating to— 

36 (i) the Administrator’s recommendations with respect to the fea37 sibility and organization of a small business capital bank to en38 courage private financing of small business investment companies 

39 (as defined in section 30101 of this title) to replace Government 

40 financing of small business investment companies; 


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1 (ii) the Administrator’s plans to ensure the provision of small 

2 business investment company financing to all areas of the country 

3 and to all eligible small business concerns, including steps taken 

4 to accomplish that; 

5 (iii) steps taken by the Administrator to maximize recoupment 

6 of Government funds incident to the inauguration and administra7 tion of the small business investment company program and to en8 sure compliance with statutory and regulatory standards relating 

9 to the small business investment company program; 

10 (iv) an accounting by the Director of the Office of Management 

11 and Budget with respect to Federal expenditures to business by 

12 executive agencies, specifying the proportion of those expenditures 

13 going to business concerns falling above and below small business 

14 size standards applicable to small business investment companies; 

15 (v) an accounting by the Secretary of the Treasury with respect 

16 to tax revenues accruing to the Government from business con17 cerns, specifying the source of those revenues by concerns falling 

18 above and below the small business size standards applicable to 

19 small business investment companies; 

20 (vi) an accounting by the Secretary of the Treasury with respect 

21 to tax losses and increased tax revenues related to small business 

22 investment company financing of both individual and corporate 

23 business taxpayers; 

24 (vii) recommendations of the Secretary of the Treasury with re25 spect to additional tax incentives to improve and facilitate the op26 erations of small business investment companies and to encourage 

27 the use of their financing facilities by eligible small business con28 cerns; 

29 (viii) a report from the Securities and Exchange Commission 

30 enumerating actions undertaken by the Securities and Exchange 

31 Commission to simplify and minimize the regulatory requirements 

32 governing small business investment companies under the Federal 

33 securities laws and to eliminate overlapping regulation and juris34 diction as between the Securities and Exchange Commission, the 

35 Administration, and other agencies of the executive branch; 

36 (ix) a report from the Securities and Exchange Commission 

37 with respect to actions taken to facilitate and stabilize the access 

38 of small business concerns (as defined in section 30101 of this 

39 title) to the securities markets; and 

40 (x) actions undertaken by the Securities and Exchange Commis41 sion to simplify compliance by small business investment compaVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 nies with the requirements of Investment Company Act of 1940 

2 (15 U.S.C. 80a–1 et seq.) and to facilitate the election to be taxed 

3 as regulated investment companies under section 851 of the Inter4 nal Revenue Code of 1986 (26 U.S.C. 851); and 

5 (C) a full and detailed description or account relating to— 

6 (i) the number of small business investment companies the Ad7 ministrator licensed under subtitle III, the number of licensees (as 

8 defined in section 30101 of this title) that have been placed in liq9 uidation, and the number of licensees that have surrendered their 

10 licenses in the previous year, identifying the amount of leverage 

11 (as defined in section 30101 of this title) each has received and 

12 the type of leverage instruments each has used; 

13 (ii) the amount of leverage that each licensee received in the 

14 previous year and the types of leverage instruments each licensee 

15 used; 

16 (iii) for each type of financing instrument, the sizes, geographic 

17 locations, and other characteristics of the small business invest18 ment companies using the financing instrument, including the ex19 tent to which small business investment companies have used the 

20 leverage from each instrument to make small business loans, eq21 uity investments, or both; and 

22 (iv) the frequency with which each type of investment instru23 ment has been used in the current year and a comparison of the 

24 current year with previous years. 

25 § 10702. Annual report on expenditures 

26 (a) IN GENERAL.—As soon as practicable each fiscal year, the Adminis27 trator shall submit to the President a report showing as accurately as pos28 sible for the fiscal year the amount of funds appropriated to the Administra29 tion that the Administrator has expended in the conduct of each of the prin30 cipal activities of the Administration such as lending, procurement, con31 tracting, and providing technical and managerial aids. 

32 (b) CONTENTS.—A report under subsection (a) shall disclose, separately 

33 for each type of loan made under sections 20503 to 20509 of this title and 

34 separately for all other loan programs, the number and amount of loans, 

35 the number of applications, the total amount applied for, and the number 

36 and amount of defaults for each type of equipment or service for which 

37 loans are authorized by subtitle II. 

38 § 10703. Annual report on secondary market operations 

39 (a) IN GENERAL.—Not later than March 31 of each year, the Adminis40 trator shall submit to the Committee on Small Business and Entrepreneur41 ship of the Senate and the Committee on Small Business of the House of 


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1 Representatives a report on the secondary market operations during the 

2 preceding calendar year. 

3 (b) CONTENTS.—A report under subsection (a) shall include— 

4 (1) the number and the total dollar amount of loans sold into the 

5 secondary market and the distribution of such loans by size of loan, 

6 size of lender, geographic location of lender, interest rate, maturity, 

7 lender servicing fees, whether the rate is fixed or variable, and pre8 mium paid; 

9 (2) the number and dollar amount of loans resold in the secondary 

10 market with a distribution by size of loan, interest rate, and premiums; 

11 (3) the number and total dollar amount of pools formed; 

12 (4) the number and total dollar amount of loans in each pool; 

13 (5) the dollar amount, interest rate, and terms on each loan in each 

14 pool and whether the rate is fixed or variable; 

15 (6) the number, face value, interest rate, and terms of the trust cer16 tificates issued for each pool; 

17 (7) to the maximum extent possible, the use by the lender of the pro18 ceeds of sales of loans in the secondary market for additional lending 

19 to small business concerns; and 

20 (8) an analysis of the information reported under paragraphs (1) to 

21 (7) to assess the access of small business concerns to capital at reason22 able rates and terms as a result of secondary market operations. 

23 § 10704. Annual report on impact of authority to impose sec24 ondary market fees 

25 (a) DEFINITION OF SMALL BUSINESS CONCERN OWNED AND CON26 TROLLED BY MINORITIES.—In this section, the term ‘‘small business con27 cerns owned and controlled by minorities’’ includes a small business concern 

28 that is owned and controlled by individuals belonging to one of the des29 ignated groups listed in subclause (1)(B) of the contract clause described 

30 in section 24301(c) of this title. 

31 (b) STUDY, MONITORING, AND EVALUATION.—The Administrator shall 

32 study, monitor, and evaluate the impact of subparagraphs (A) to (E) of sec33 tion 10332(d)(5) of this title on— 

34 (1) the ability of small business concerns owned and controlled by 

35 minorities, small business concerns owned and controlled by women, 

36 and other small business concerns to obtain financing; and 

37 (2) the effectiveness, viability, and growth of the secondary market 

38 authorized by section 10332(c) of this title. 

39 (c) ANNUAL REPORTS.— 

40 (1) IN GENERAL.—The Administrator shall annually submit to the 

41 Committee on Small Business and Entrepreneurship of the Senate and 


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1 the Committee on Small Business of the House of Representatives a 

2 report containing the Administrator’s findings and recommendations on 

3 the impact described in subsection (b), specifically including changes in 

4 the interest rates on financings provided to small business concerns 

5 owned and controlled by minorities, small business concerns owned and 

6 controlled by women, and other small business concerns through the 

7 use of the secondary market. 

8 (2) FINDINGS AND RECOMMENDATIONS.—The report under para9 graph (1) shall state findings and recommendations separately for the 

10 ethnic and gender components of the small business concerns described 

11 in paragraph (1). 

12 § 10705. Annual report on needs of small business concerns 

13 owned and controlled by veterans and small busi14 ness concerns owned and controlled by service15 disabled veterans 

16 (a) IN GENERAL.—The Administrator shall annually submit to the Com17 mittee on Small Business and Entrepreneurship and Committee on Veterans 

18 Affairs of the Senate and the Committee on Small Business and Committee 

19 on Veterans Affairs of the House of Representatives a report on the needs 

20 of small business concerns owned and controlled by veterans and small busi21 ness concerns owned and controlled by service-disabled veterans. 

22 (b) CONTENTS.—A report under subsection (a) shall include information 

23 on— 

24 (1)(A) the availability of Administration programs for small business 

25 concerns owned and controlled by veterans and small business concerns 

26 owned and controlled by service-disabled veterans; and 

27 (B) the degree of utilization of those programs by small business 

28 concerns owned and controlled by veterans and small business concerns 

29 owned and controlled by service-disabled veterans during the preceding 

30 12-month period, including statistical information on such utilization as 

31 compared with the small business community as a whole; 

32 (2) the percentage and dollar value of Federal contracts awarded to 

33 small business concerns owned and controlled by veterans and small 

34 business concerns owned and controlled by service-disabled veterans 

35 during the preceding 12-month period, based on the data collected 

36 under section 27513 of this title; and 

37 (3) proposals to improve the access of small business concerns owned 

38 and controlled by veterans and small business concerns owned and con39 trolled by service-disabled veterans to the assistance made available by 

40 the United States. 


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1 § 10706. Annual report on contract bundling 

2 (a) IN GENERAL.—In March of each year, using information maintained 

3 under section 25105(e) of this title, the Administrator shall submit to the 

4 Committee on Small Business and Entrepreneurship of the Senate and the 

5 Committee on Small Business of the House of Representatives a report on 

6 contract bundling. 

7 (b) CONTENTS.—A report under subsection (a) shall include— 

8 (1) information on the number (arranged by industrial classification) 

9 of small business concerns displaced as prime contractors as a result 

10 of the award of bundled contracts by Federal agencies; and 

11 (2) a description of the activities with respect to previously bundled 

12 contracts of each Federal agency during the preceding year, includ13 ing— 

14 (A) information on the number and total dollar amount of all 

15 contract requirements that were bundled; and 

16 (B) with respect to each bundled contract, information on— 

17 (i) the justification for the bundling of contract require18 ments; 

19 (ii) the cost savings realized by bundling the contract re20 quirements over the life of the contract; 

21 (iii) the extent to which maintaining the bundled status of 

22 contract requirements is projected to result in continued cost 

23 savings; 

24 (iv) the extent to which the bundling of contract require25 ments complied with the procuring agency’s small business 

26 subcontracting plan, including the total dollar value awarded 

27 to small business concerns as subcontractors and the total 

28 dollar value previously awarded to small business concerns as 

29 prime contractors; and 

30 (v) the impact of the bundling of contract requirements on 

31 small business concerns unable to compete as prime contrac32 tors for the consolidated requirements and on the industries 

33 of such small business concerns, including a description of 

34 any changes to the proportion of any such industry that is 

35 composed of small business concerns. 

36 § 10707. Annual report on business development program 

37 (a) IN GENERAL.—Not later than April 30 of each year, the Adminis38 trator shall submit to Congress a report on the business development pro39 gram. 

40 (b) CONTENTS.— 


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1 (1) NET WORTH OF PARTICIPATING INDIVIDUALS.—A report under 

2 subsection (a) shall disclose— 

3 (A) the average personal net worth of individuals who own and 

4 control small business concerns that were initially certified for par5 ticipation in the business development program during the imme6 diately preceding fiscal year; and 

7 (B) the dollar distribution of net worths, at $50,000 increments, 

8 of all such individuals determined to be socially and economically 

9 disadvantaged. 

10 (2) DESCRIPTION AND ESTIMATE OF BENEFITS AND COSTS.—A re11 port under subsection (a) shall include a description and estimate of 

12 the benefits and costs that have accrued to the economy and the Gov13 ernment in the immediately preceding fiscal year due to the operations 

14 of the program participants that were performing contracts awarded 

15 under the business development program. 

16 (3) PROGRAM PARTICIPANTS EXITING THE PROGRAM.— 

17 (A) IN GENERAL.—A report under subsection (a) shall include 

18 a compilation and evaluation of the former program participants 

19 that exited the program during the immediately preceding 3 fiscal 

20 years. 

21 (B) CONTENTS.—The compilation and evaluation under sub22 paragraph (A) shall— 

23 (i)(I) disclose the number of former program participants 

24 that are actively engaged in business operations; and 

25 (II) for those former program participants, separately de26 tail the benefits and costs that have accrued to the economy 

27 during the immediately preceding fiscal year due to the oper28 ations of the former program participants; 

29 (ii)(I) disclose the number of former program participants 

30 that have ceased or substantially curtailed business oper31 ations; and 

32 (II) describe the reasons for the cessation or curtailment; 

33 and 

34 (iii) disclose the number of former program participants 

35 that have been acquired by other business concerns or organi36 zations owned and controlled by other than socially and eco37 nomically disadvantaged individuals. 

38 (4) LIST OF PROGRAM PARTICIPANTS.—A report under subsection 

39 (a) shall include a list of all program participants that participated in 

40 the program during the preceding fiscal year that discloses, by State 

41 and by Administration region, for each program participant— 


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1 (A) the name of the program participant; 

2 (B) the race or ethnicity and gender of the disadvantaged own3 ers; 

4 (C) the dollar value of all contracts received in the preceding 

5 year; 

6 (D) the dollar amount of advance payments received under con7 tracts awarded under the business development program; and 

8 (E) a description (including (if appropriate) an estimate of the 

9 dollar value) of all benefits received under sections 20511 and 

10 23327 of this title during the preceding year. 

11 (5) CONTRACT AND OPTION VALUE.—A report under subsection (a) 

12 shall include the total dollar value of contracts and options awarded 

13 under this chapter during the preceding fiscal year— 

14 (A) expressed as an absolute amount; 

15 (B) expressed as a percentage of total sales— 

16 (i) of all program participants during that year; and 

17 (ii) of program participants in each of the 9 years of pro18 gram participation; and 

19 (C) expressed, at such dollar increments as the Administrator 

20 considers appropriate, for each 6-digit North American Industry 

21 Classification System code under which the contracts and options 

22 were classified. 

23 (6) ADDITIONAL RESOURCES OR AUTHORITIES.—A report under sub24 section (a) shall include a description of such additional resources or 

25 program authorities as may be required to provide the types of services 

26 needed over the next 2-year period to service the expected portfolio of 

27 program participants. 

28 § 10708. Annual report on contract participation goals 

29 (a) REPORT BY THE ADMINISTRATOR.— 

30 (1) IN GENERAL.—The Administrator shall annually— 

31 (A) compile and analyze the reports submitted by Federal agen32 cies under section 25106(c) of this title; and 

33 (B) submit the reports to the President and Congress. 

34 (2) CONTENTS.—The Administrator’s submission to the President 

35 shall include— 

36 (A)(i) the Governmentwide goals for participation by qualified 

37 HUBZone small business concerns, small business concerns owned 

38 and controlled by service-disabled veterans, small business con39 cerns owned and controlled by socially and economically disadvan40 taged individuals, small business concerns owned and controlled by 

41 women, and other small business concerns; and 


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1 (ii) the performance in attaining those goals; 

2 (B)(i) the goals in effect for each Federal agency; and 

3 (ii) each Federal agency’s performance in attaining those goals; 

4 (C)(i) an analysis of any failure to achieve the Governmentwide 

5 goals or any Federal agency goals; and 

6 (ii) the actions planned by each Federal agency and approved 

7 by the Administrator to achieve the goals in the succeeding fiscal 

8 year; 

9 (D) for each Federal agency and on a Governmentwide basis, 

10 the number and dollar value of contracts awarded to qualified 

11 HUBZone small business concerns, small business concerns owned 

12 and controlled by service-disabled veterans, small business con13 cerns owned and controlled by socially and economically disadvan14 taged individuals, small business concerns owned and controlled by 

15 women, and other small business concerns through— 

16 (i) noncompetitive negotiation; 

17 (ii) competition restricted to small business concerns owned 

18 and controlled by socially and economically disadvantaged in19 dividuals; 

20 (iii) competition restricted to small business concerns; and 

21 (iv) unrestricted competitions; and 

22 (E) the number and dollar value of subcontracts awarded to 

23 qualified HUBZone small business concerns, small business con24 cerns owned and controlled by service-disabled veterans, small 

25 business concerns owned and controlled by socially and economi26 cally disadvantaged individuals, small business concerns owned 

27 and controlled by women, and other small business concerns. 

28 (b) REPORT BY THE PRESIDENT.—The President shall include the infor29 mation required by subsection (a) in each annual report to Congress on the 

30 state of small business under section 45101(c) of this title. 

31 § 10709. Annual report on cost savings from breakout pro32 curement center representatives 

33 The Administrator shall annually submit to Congress a report that— 

34 (1) describes the cost savings achieved during the year covered by 

35 the report through the efforts of breakout procurement center rep36 resentatives assigned to major procurement centers under section 

37 25110 of this title; 

38 (2) contains an evaluation of the extent to which competition has 

39 been increased as a result of those efforts; and 

40 (3) includes such other information relating to breakout procurement 

41 center representatives as the Administrator considers appropriate. 


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1 § 10710. Annual reports on SBIRs, STTRs, and the FAST pro2 gram 

3 (a) SBIR AND STTR PROGRAMS.— 

4 (1) IN GENERAL.—The Administrator, not less than annually, shall 

5 submit to the Committee on Small Business and Entrepreneurship of 

6 the Senate and the Committee on Science and Committee on Small 

7 Business of the House of Representatives a report on the SBIRs (as 

8 defined in section 26101 of this title) and STTRs (as defined in section 

9 26101 of this title) of the Federal agencies and the Administrator’s in10 formation and monitoring efforts relating to the SBIRs and STTRs. 

11 (2) CONTENTS.—A report under paragraph (1) shall include— 

12 (A) the data on output and outcomes collected under section 

13 26302(a)(9) and paragraphs (9) and (14) of section 26322 of this 

14 title; 

15 (B) the number of proposals received from, and the number and 

16 total amount of awards to, HUBZone small business concerns 

17 under each of the SBIRs and STTRs; and 

18 (C) a description of the extent to which Federal agencies are 

19 providing in a timely manner information needed to maintain the 

20 database under section 26341 of this title. 

21 (b) FAST PROGRAM.—The Administrator shall annually submit to the 

22 Committee on Small Business and Entrepreneurship of the Senate and the 

23 Committee on Science and Committee on Small Business of the House of 

24 Representatives a report regarding— 

25 (1) the number and amount of awards provided and cooperative 

26 agreements entered into under the FAST program (as defined in sec27 tion 26345 of this title) during the preceding year; 

28 (2) a list of recipients under section 26345 of this title, including 

29 their location and the activities being performed with the awards made 

30 or under the cooperative agreements entered into; and 

31 (3) the mentoring networks and the mentoring database, as provided 

32 for under section 26345(f) of this title, including— 

33 (A) the status of the inclusion of mentoring information in the 

34 database required by section 26341 of this title; and 

35 (B) the status of the implementation and description of the 

36 usage of the mentoring networks. 

37 § 10711. Annual report on women’s business center program 

38 (a) IN GENERAL.—The Administrator shall annually submit to the Com39 mittee on Small Business and Entrepreneurship of the Senate and the Com40 mittee on Small Business of the House of Representatives a report on the 

41 effectiveness of all projects conducted under chapter 273. 


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1 (b) CONTENTS.—A report under subsection (a) shall include information 

2 concerning, with respect to each women’s business center— 

3 (1) the number of individuals receiving assistance; 

4 (2) the number of startup business concerns formed; 

5 (3) the gross receipts of assisted business concerns; 

6 (4) the employment increases or decreases of assisted business con7 cerns; 

8 (5) to the maximum extent practicable, increases or decreases in 

9 profits of assisted business concerns; and 

10 (6) the most recent analysis and determination made by the Admin11 istrator under section 27307(a)(2) of this title. 

12 § 10712. Annual report of the Office of International Trade 

13 The Office of International Trade shall annually submit to the Committee 

14 on Small Business and Entrepreneurship of the Senate and the Committee 

15 on Small Business of the House of Representatives a report that describes 

16 the progress that the Office of International Trade has made in carrying 

17 out section 10309. 

18 § 10713. Annual report on historical trends of the small busi19 ness sector 

20 The Administrator shall publish annually a report giving a comparative 

21 analysis and interpretation of the historical trends of the small business sec22 tor as reflected by the data acquired under section 10333 of this title. 

23 § 10714. Biennial report on accredited lenders program 

24 The Administrator shall biennially submit to the Committee on Small 

25 Business and Entrepreneurship of the Senate and the Committee on Small 

26 Business of the House of Representatives a report on the implementation 

27 of section 33107 of this title that includes data on the number of qualified 

28 development companies (as defined in section 33101 of this title) designated 

29 as accredited lenders, their debenture guarantee volume, their loss rates, the 

30 average processing time on their guarantee applications, and such other in31 formation as the Administrator considers appropriate. 

32 § 10715. Annual report on premier certified lenders program 

33 (a) IN GENERAL.—The Administration shall annually submit to the Com34 mittee on Small Business and Entrepreneurship of the Senate and the Com35 mittee on Small Business of the House of Representatives a report on the 

36 implementation of section 33108 of this title. 

37 (b) CONTENTS.—A report under subsection (a) shall include— 

38 (1) the number of certified development companies designated as 

39 premier certified lenders; 

40 (2) the debenture guarantee volume of those certified development 

41 companies; 


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1 (3) a comparison of the loss rate of premier certified lenders with 

2 the loss rate of accredited lenders under section 33107 of this title and 

3 the loss rate of other certified development companies under chapter 

4 331, specifically comparing default rates and recovery rates on liquida5 tions; and 

6 (4) such other information as the Administrator considers appro7 priate. 

8 § 10716. Annual report on foreclosure and liquidation of 

9 loans under the certified development company 

10 program 

11 (a) IN GENERAL.—Based on information provided by qualified develop12 ment companies (as defined in section 33101 of this title) and the Adminis13 tration, the Administrator shall annually submit to the Committee on Small 

14 Business and Entrepreneurship of the Senate and the Committee on Small 

15 Business of the House of Representatives a report on the results of delega16 tion of authority under section 33109 of this title. 

17 (b) CONTENTS.—A report under subsection (a)— 

18 (1) shall disclose, with respect to each loan foreclosed or liquidated 

19 by a qualified development company under section 33109 of this title, 

20 or for which losses were otherwise mitigated by the qualified develop21 ment company pursuant to a workout plan under that section— 

22 (A) the total cost of the project financed with the loan; 

23 (B) the total original dollar amount guaranteed by the Adminis24 trator; 

25 (C) the total dollar amount of the loan at the time of liquida26 tion, foreclosure, or mitigation of loss; 

27 (D) the total dollar losses resulting from the liquidation, fore28 closure, or mitigation of loss; and 

29 (E) the total recoveries resulting from the liquidation, fore30 closure, or mitigation of loss, both as a percentage of the amount 

31 guaranteed and the total cost of the project financed; 

32 (2) shall disclose, with respect to each qualified development com33 pany to which authority is delegated under section 33109 of this title, 

34 the totals of each of the amounts described in subparagraphs (A) to 

35 (E) of paragraph (1); 

36 (3) shall disclose, with respect to all loans subject to foreclosure, liq37 uidation, or mitigation under section 33109 of this title, the totals of 

38 each of the amounts described in subparagraphs (A) to (E) of para39 graph (1); 

40 (4) include a comparison between— 


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1 (A) the information provided under paragraph (3) with respect 

2 to the 12-month period preceding the date on which the report is 

3 submitted; and 

4 (B) the same information with respect to loans foreclosed and 

5 liquidated, or otherwise treated, by the Administrator during the 

6 same period; and 

7 (5)(A) shall disclose the number of times that the Administrator has 

8 failed to— 

9 (i) approve or reject a liquidation plan in accordance with sub10 paragraph (A)(ii) or a workout plan in accordance with subpara11 graph (C)(ii) of section 33109(c)(2) of this title; or 

12 (ii) approve or deny a request for purchase of indebtedness 

13 under section 33109(c)(2)(B)(ii) of this title; and 

14 (B) include specific information regarding— 

15 (i) the reasons for the Administrator’s failure; and 

16 (ii) any delays that resulted. 

17 § 10717. Reports on disaster assistance 

18 (a) DEFINITIONS.—In this section: 

19 (1) MAJOR DISASTER UPDATE PERIOD.—The term ‘‘major disaster 

20 update period’’, with respect to a major disaster, means the period be21 ginning on the date on which the President declares the major disaster 

22 (including any major disaster relating to which the Administrator de23 clares eligibility for additional disaster assistance under 21308 of this 

24 title) and ending on the date on which the declaration terminates. 

25 (2) STATE.—The term ‘‘State’’ means a State of the United States, 

26 the District of Columbia, Puerto Rico, the Northern Mariana Islands, 

27 the Virgin Islands, Guam, American Samoa, and any territory or pos28 session of the United States. 

29 (b) MONTHLY ACCOUNTING REPORTS FOR MAJOR DISASTERS.— 

30 (1) REPORTING REQUIREMENTS.—Not later than the fifth business 

31 day of each month during the applicable period for a major disaster, 

32 the Administrator shall submit to the Committee on Small Business 

33 and Entrepreneurship and Committee on Appropriations of the Senate 

34 and the Committee on Small Business and Committee on Appropria35 tions of the House of Representatives a report on the operation of the 

36 disaster assistance programs for that major disaster during the pre37 ceding month. 

38 (2) CONTENTS.—A report under paragraph (1) shall include— 

39 (A)(i) the daily average lending volume, in number of loans and 

40 dollars, of each category of loan; and 


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1 (ii) the percentage by which each category has increased or de2 creased since the previous report; 

3 (B)(i) the weekly average lending volume, in number of loans 

4 and dollars, of each category of loan; and 

5 (ii) the percentage by which each category has increased or de6 creased since the previous report; 

7 (C)(i) the amount of funding spent over the month for each cat8 egory of loan, both in amount of appropriations and in program 

9 level; and 

10 (ii) the percentage by which each category has increased or de11 creased since the previous report; 

12 (D)(i) the amount of funding available for loans, in amount of 

13 appropriations and in program level, for each category of loan; and 

14 (ii) the percentage by which each category has increased or de15 creased since the previous report, noting the source of any addi16 tional funding; 

17 (E) an estimate of how long the available funding for loans will 

18 last, based on the spending rate; 

19 (F)(i) the amount of funding spent over the month for staff en20 gaged in the operation of the disaster assistance programs; 

21 (ii) the number of staff engaged in the operation of the disaster 

22 assistance programs; and 

23 (iii) the percentage by which the funding and number of staff 

24 engaged in the operation of the disaster assistance programs have 

25 increased or decreased since the previous report; 

26 (G)(i) the amount of funding spent over the month for adminis27 trative costs of the disaster assistance programs; and 

28 (ii) the percentage by which spending for those administrative 

29 costs has increased or decreased since the previous report; 

30 (H)(i) the amount of funding available for salaries and expenses 

31 combined for operation of the disaster assistance programs; and 

32 (ii) the percentage by which that funding has increased or de33 creased since the previous report, noting the source of any addi34 tional funding; and 

35 (I) an estimate of how long the available funding for those sala36 ries and expenses will last, based on the spending rate. 

37 (c) WEEKLY DISASTER UPDATES FOR MAJOR DISASTERS.— 

38 (1) IN GENERAL.—Each week during a major disaster update period, 

39 the Administrator shall submit to the Committee on Small Business 

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1 ness of the House of Representatives a report on the operation of the 

2 disaster assistance programs for the major disaster area. 

3 (2) CONTENTS.—A report under paragraph (1) shall include— 

4 (A)(i) the number of Administration staff performing loan proc5 essing, field inspection, and other duties for the major disaster; 

6 and 

7 (ii) the allocations of the staff in the disaster field offices, dis8 aster recovery centers, workshops, and other Administration of9 fices nationwide; 

10 (B)(i) the daily number of applications received from applicants 

11 in the major disaster area; and 

12 (ii) a breakdown of that number by State; 

13 (C)(i) the daily number of applications pending application 

14 entry from applicants in the major disaster area; and 

15 (ii) a breakdown of that number by State; 

16 (D)(i) the daily number of applications withdrawn by applicants 

17 in the major disaster area; and 

18 (ii) a breakdown of that number by State; 

19 (E)(i) the daily number of applications summarily declined by 

20 the Administrator from applicants in the major disaster area; and 

21 (ii) a breakdown of that number by State; 

22 (F)(i) the daily number of applications declined by the Adminis23 trator from applicants in the major disaster area; and 

24 (ii) a breakdown of that number by State; 

25 (G)(i) the daily number of applications in process from appli26 cants in the major disaster area; and 

27 (ii) a breakdown of that number by State; 

28 (H)(i) the daily number of applications approved by the Admin29 istrator from applicants in the major disaster area; and 

30 (ii) a breakdown of that number by State; 

31 (I)(i) the daily dollar amount of applications approved by the 

32 Administrator from applicants in the major disaster area; and 

33 (ii) a breakdown of that number by State; 

34 (J)(i) the daily number of loans disbursed, both partially and 

35 fully, by the Administrator to applicants in the major disaster 

36 area; and 

37 (ii) a breakdown of that number by State; 

38 (K)(i) the daily dollar amount of loans disbursed, both partially 

39 and fully, to applicants in the major disaster area; and 

40 (ii) a breakdown of that number by State; 


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1 (L)(i) the number of applications approved, including dollar 

2 amount approved, and applications partially and fully disbursed, 

3 including dollar amounts, since the last report under paragraph 

4 (1); and 

5 (M)(i) the declaration date, physical damage closing date, and 

6 economic injury closing date for the major disaster; and 

7 (ii) the number of counties in the major disaster area. 

8 (d) PERIODS WHEN ADDITIONAL DISASTER ASSISTANCE IS MADE

9 AVAILABLE.— 

10 (1) IN GENERAL.—During any period for which the Administrator 

11 declares eligibility for additional disaster assistance under section 

12 21308 of this title, the Administrator shall, on a monthly basis, submit 

13 to the Committee on Small Business and Entrepreneurship of the Sen14 ate and the Committee on Small Business of the House of Representa15 tives a report on the disaster assistance operations of the Adminis16 trator with respect to the applicable major disaster. 

17 (2) CONTENTS.—A report under paragraph (1) shall specify— 

18 (A) the number of applications for disaster assistance distrib19 uted; 

20 (B) the number of applications for disaster assistance received; 

21 (C) the average time for the Administrator to approve or dis22 approve an application for disaster assistance; 

23 (D) the number of disaster loans approved; 

24 (E) the average time for initial disbursement of disaster loan 

25 proceeds; and 

26 (F) the dollar amount of disaster loan proceeds disbursed. 

27 (e) NOTICE OF NEED FOR SUPPLEMENTAL FUNDS.—On the date on 

28 which the Administrator notifies any committee of the Senate or the House 

29 of Representatives that supplemental funding is necessary for the disaster 

30 assistance programs in any fiscal year, the Administrator shall notify in 

31 writing the Committee on Small Business and Entrepreneurship of the Sen32 ate and the Committee on Small Business of the House of Representatives 

33 regarding the need for supplemental funds for the disaster assistance pro34 grams. 

35 (f) REPORT ON CONTRACTING.— 

36 (1) IN GENERAL.—Not later than 6 months after the date on which 

37 the President declares a major disaster, and every 6 months thereafter 

38 until the date that is 18 months after the date on which the major dis39 aster is declared, the Administrator shall submit to the Committee on 

40 Small Business and Entrepreneurship of the Senate and the Committee 


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1 on Small Business of the House of Representatives a report regarding 

2 Federal contracts awarded as a result of the major disaster. 

3 (2) CONTENTS.—A report under paragraph (1) shall include— 

4 (A) the number of contracts awarded as a result of the major 

5 disaster; 

6 (B) the number of contracts awarded to small business concerns 

7 as a result of the major disaster; 

8 (C) the number of contracts awarded to women-owned business 

9 concerns and minority-owned business concerns as a result of the 

10 major disaster; and 

11 (D) the number of contracts awarded to business concerns local 

12 to the major disaster area as a result of the major disaster. 

13 (g) ANNUAL REPORTS ON DISASTER ASSISTANCE.— 

14 (1) IN GENERAL.—Not later than 45 days after the end of a fiscal 

15 year, the Administrator shall submit to the Committee on Small Busi16 ness and Entrepreneurship of the Senate and the Committee on Small 

17 Business of the House of Representatives a report on the disaster as18 sistance operations of the Administration for the fiscal year. 

19 (2) CONTENTS.—A report under paragraph (1) shall— 

20 (1) specify the number of Administration personnel involved in dis21 aster assistance operations; 

22 (2) describe any material changes to disaster assistance operations, 

23 such as changes to technologies used or to personnel responsibilities; 

24 (3) describe and assess the effectiveness of the Administrator in re25 sponding to disasters during the fiscal year, including a description of 

26 the number and dollar amounts of loans made for damage and for eco27 nomic injury; and 

28 (4) describe the plans of the Administrator for preparing to respond 

29 to disasters during the next fiscal year. 

30 CHAPTER 109—FUNDING 

Sec. 

10901. Commitments in full amounts provided by law. 

10902. Program levels. 

10903. Authorization of appropriations. 

31 § 10901. Commitments in full amounts provided by law 

32 (a) IN GENERAL.—Notwithstanding any other provision of law, the Ad33 ministrator shall enter into commitments for direct loans and to guarantee 

34 loans, debentures, payment of rentals, or other amounts due under qualified 

35 contracts and other types of financial assistance, and enter into commit36 ments to purchase debentures and preferred securities and to guarantee 

37 sureties against loss pursuant to programs under subtitles II and III, in the 

38 full amounts provided by law subject only to— 


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1 (1) the availability of qualified applications; and 

2 (2) limitations contained in appropriations Acts. 

3 (b) EFFECT OF SECTION.—Nothing in this section authorizes the Admin4 istrator to reduce or limit the authority of the Administrator to enter into 

5 a commitment described in subsection (a). 

6 (c) MULTIPLE FISCAL YEARS.—Subject to approval in appropriations 

7 Acts, amounts authorized for preferred securities, debentures, or partici8 pating securities under chapter 303 may be obligated in one fiscal year and 

9 disbursed or guaranteed in any one or more of the 4 subsequent fiscal years. 

10 § 10902. Program levels 

11 (a) FISCAL YEAR 2005.—The following program levels are authorized for 

12 fiscal year 2005: 

13 (1) For the programs authorized by this subtitle and subtitle II, the 

14 Administrator may make— 

15 (A) $75,000,000 in technical assistance grants, as provided in 

16 chapter 211; and 

17 (B) $105,000,000 in direct loans, as provided in chapter 211. 

18 (2) For the programs authorized by this subtitle and subtitle II, the 

19 Administrator may make $23,050,000,000 in deferred participation 

20 loans and other financings. Of that sum, the Administrator may 

21 make— 

22 (A) $16,500,000,000 in general business loans, as provided in 

23 division B of subtitle II; 

24 (B) $6,000,000,000 in certified development company 

25 financings, as provided in section 20507 of this title and chapter 

26 331; 

27 (C) $500,000,000 in loans, as provided in section 20512 of this 

28 title; and 

29 (D) $50,000,000 in loans, as provided in chapter 211. 

30 (3) For the programs authorized by chapter 303, the Administrator 

31 may make— 

32 (A) $4,250,000,000 in purchases of participating securities; and 

33 (B) $3,250,000,000 in guarantees of debentures. 

34 (4) For the programs authorized by chapter 321, the Administrator 

35 may enter into guarantees not to exceed $6,000,000,000, of which not 

36 more than 50 percent may be in bonds approved under section 

37 32102(a)(4) of this title. 

38 (5) The Administrator may make grants or enter into cooperative 

39 agreements for a total amount of $7,000,000 for SCORE. 

40 (b) FISCAL YEAR 2006.—The following program levels are authorized for 

41 fiscal year 2006: 


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1 (1) For the programs authorized by this subtitle and subtitle II, the 

2 Administrator may make— 

3 (A) $80,000,000 in technical assistance grants, as provided in 

4 chapter 211; and 

5 (B) $110,000,000 in direct loans, as provided in chapter 211. 

6 (2) For the programs authorized by this subtitle and subtitle II, the 

7 Administrator may make $25,050,000,000 in deferred participation 

8 loans and other financings. Of that sum, the Administrator may 

9 make— 

10 (A) $17,000,000,000 in general business loans, as provided in 

11 division B of subtitle II; 

12 (B) $7,500,000,000 in certified development company 

13 financings, as provided in section 20507 of this title and chapter 

14 331; 

15 (C) $500,000,000 in loans, as provided in section 20512 of this 

16 title; and 

17 (D) $50,000,000 in loans, as provided in chapter 211. 

18 (3) For the programs authorized by chapter 303, the Administrator 

19 may make— 

20 (A) $4,500,000,000 in purchases of participating securities; and 

21 (B) $3,500,000,000 in guarantees of debentures. 

22 (4) For the programs authorized by chapter 321, the Administrator 

23 may enter into guarantees not to exceed $6,000,000,000, of which not 

24 more than 50 percent may be in bonds approved under section 

25 32102(a)(4) of this title. 

26 (5) The Administrator may make grants or enter into cooperative 

27 agreements for a total amount of $7,000,000 for SCORE. 

28 (c) AMOUNT OF DEFERRED PARTICIPATION LOANS.—Except as may be 

29 otherwise specifically provided by law, the amount of deferred participation 

30 loans authorized in this section— 

31 (1) means the net amount of the loan principal guaranteed by the 

32 Administrator and does not include any amount that is not guaranteed; 

33 and 

34 (2) shall be available for a national program, except that the Admin35 istrator may use not more than an amount equal to 10 percent of the 

36 amount authorized each year for any special or pilot program directed 

37 to identified sectors of the small business community or to specific geo38 graphic regions of the United States. 


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1 § 10903. Authorization of appropriations 

2 (a) CERTAIN ADMINISTRATIVE EXPENSES.—For each fiscal year, there 

3 are authorized to be appropriated such sums as are necessary, to remain 

4 available until expended— 

5 (1) to carry out the small business development center program, but 

6 not to exceed the annual funding level specified in section 27102 of this 

7 title; 

8 (2) to pay the expenses of the National Small Business Development 

9 Center Advisory Board under section 27109 of this title; 

10 (3) to pay the expenses of the information sharing system under sec11 tion 27104(j) of this title; 

12 (4) to pay the expenses of the Association for conducting the accredi13 tation program under section 27111 of this title; 

14 (5) to pay the expenses of the Administration, including salaries of 

15 examiners, for conducting examinations as part of the accreditation 

16 program conducted by the Association; and 

17 (6) to pay for small business development center grants as directed 

18 by Congress. 

19 (b) PROGRAMS FOR WHICH PROGRAM LEVELS ARE ESTABLISHED

20 UNDER SECTION 10902.— 

21 (1) IN GENERAL.—There are authorized to be appropriated to the 

22 Administration for each of fiscal years 2005 and 2006 such sums as 

23 are necessary to carry out— 

24 (A) the provisions of this subtitle and subtitle II not elsewhere 

25 provided for (including salaries and expenses of the Administration 

26 and necessary loan capital for loans under the disaster loan pro27 gram); and 

28 (B) subtitle III. 

29 (2) LIMITATIONS.—Notwithstanding any other provision of this sub30 section, for each of fiscal years 2005 and 2006, respectively— 

31 (A) no funds are authorized to be used as loan capital for the 

32 loan program authorized by section 20512 of this title except by 

33 transfer from another Federal agency to the Administration, un34 less the program level authorized for general business loans under 

35 subsection (a)(2)(A) or (b)(2)(A) of section 10902 of this title is 

36 fully funded; and 

37 (B) the Administrator may not approve loans on behalf of the 

38 Administration or on behalf of any other Federal agency, by con39 tract or otherwise, under terms or conditions other than those spe40 cifically authorized under this subtitle or subtitle II or III, except 


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1 that the Administrator may approve loans under section 20512 of 

2 this title in gross amounts of not more than $2,000,000. 

3 (c) OFFICE OF ADVOCACY.—There is authorized to be appropriated to 

4 carry out section 10307 of this title $1,000,000, to remain available until 

5 expended. 

6 (d) OFFICE OF VETERANS BUSINESS DEVELOPMENT.—There are author7 ized to be appropriated to carry out section 10313 of this title— 

8 (1) $1,500,000 for fiscal year 2005; and 

9 (2) $2,000,000 for fiscal year 2006. 

10 (e) LOSSES AND INTEREST SUBSIDIES.—There are authorized to be ap11 propriated for each fiscal year such sums as are necessary for losses and 

12 interest subsidies incurred by the accounts referred to in section 

13 10332(a)(1) of this title. 

14 (f) HUBZONE PROGRAM.—There is authorized to be appropriated to 

15 carry out chapter 253 $10,000,000 for each of fiscal years 2004 through 

16 2006. 

17 (g) FAST PROGRAM.— 

18 (1) IN GENERAL.—There is authorized to be appropriated to carry 

19 out the FAST program (including mentoring networks) under section 

20 26345 of this title $10,000,000 for each of fiscal years 2001 through 

21 2005. 

22 (2) MENTORING DATABASE.—Of the total amount made available 

23 under paragraph (1) for fiscal years 2001 through 2005, a reasonable 

24 amount, not to exceed a total of $500,000, may be used by the Admin25 istrator to carry out section 26345(f)(3) of this title. 

26 (h) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM.—There are au27 thorized to be appropriated to carry out chapter 271— 

28 (1) $130,000,000 for fiscal year 2005; and 

29 (2) $135,000,000 for fiscal year 2006. 

30 (i) NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION.— 

31 (1) IN GENERAL.—Subject to paragraph (2), there are authorized to 

32 be appropriated to the National Veterans Business Development Cor33 poration to carry out section 27514 of this title— 

34 (A) $4,000,000 for fiscal year 2001; 

35 (B) $4,000,000 for fiscal year 2002; 

36 (C) $2,000,000 for fiscal year 2003; and 

37 (D) $2,000,000 for fiscal year 2004. 

38 (2) MATCHING REQUIREMENT.— 

39 (A) FISCAL YEAR 2002.—The amount made available to the Na40 tional Veterans Business Development Corporation for fiscal year 

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1 tifies that it will provide for that fiscal year from sources other 

2 than the Federal Government. 

3 (B) SUBSEQUENT FISCAL YEARS.—The amount made available 

4 to the National Veterans Business Development Corporation for 

5 fiscal year 2003 or 2004 may not exceed the amount that the Cor6 poration certifies that it will provide for that fiscal year from 

7 sources other than the Federal Government. 

8 (3) PRIVATIZATION.—The National Veterans Business Development 

9 Corporation shall institute and implement a plan to raise private funds 

10 and become a self-sustaining corporation. 

11 (j) BUSINESS GRANTS AND COOPERATIVE AGREEMENTS.—There is au12 thorized to be appropriated to carry out section 29102 of this title 

13 $6,600,000 for each of fiscal years 2001 through 2006, to remain available 

14 until expended. 

15 (k) PAUL D. COVERDELL DRUG-FREE WORKPLACE PROGRAM.— 

16 (1) IN GENERAL.—There is authorized to be appropriated to carry 

17 out section 29104 of this title (other than section 29104(b)(2) of this 

18 title) $5,000,000 for each of fiscal years 2005 and 2006. Amounts 

19 made available under this paragraph shall remain available until ex20 pended. 

21 (2) SMALL BUSINESS DEVELOPMENT CENTERS.—Of the total 

22 amount made available under paragraph (1) for each of fiscal years 

23 2005 and 2006, not more than the greater of 10 percent or $500,000 

24 may be used to carry out section 27104(b)(20) of this title. 

25 (3) ADDITIONAL AUTHORIZATION FOR TECHNICAL ASSISTANCE

26 GRANTS.—There are authorized to be appropriated to carry out section 

27 29104(b)(2) of this title $1,500,000 for each of fiscal years 2005 and 

28 2006. Amounts made available under this paragraph shall remain avail29 able until expended. 

30 (4) LIMITATION ON ADMINISTRATIVE COSTS.—Not more than 5 per31 cent of the total amount made available under this subsection for any 

32 fiscal year shall be used for administrative costs (determined without 

33 regard to the administrative costs of eligible intermediaries). 

34 (l) NEW MARKETS VENTURE CAPITAL COMPANY PROGRAM.— 

35 (1) IN GENERAL.—There are authorized to be appropriated for fiscal 

36 years 2001 through 2006, to remain available until expended, the fol37 lowing sums: 

38 (A) Such subsidy budget authority as is necessary to guarantee 

39 $150,000,000 of debentures under chapter 305. 

40 (B) $30,000,000 to make grants under chapter 305. 


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1 (2) FUNDS COLLECTED FOR EXAMINATIONS.—Funds deposited 

2 under section 30512(d) of this title are authorized to be appropriated 

3 only for the costs of examinations under section 30512 of this title and 

4 for the costs of other oversight activities with respect to the new mar5 kets venture capital company program. 

6 (m) RENEWABLE FUEL CAPITAL INVESTMENT COMPANY PROGRAM.— 

7 (1) IN GENERAL.—Subject to the availability of appropriations, the 

8 Administrator may make $15,000,000 in operational assistance grants 

9 under section 30707 of this title for each of fiscal years 2008 and 

10 2009. 

11 (2) FUNDS COLLECTED FOR EXAMINATIONS.—Funds deposited 

12 under section 30711(d) of this title are authorized to be appropriated 

13 only for the costs of examinations under section 30711 of this title and 

14 for the costs of other oversight activities with respect to the renewable 

15 fuel capital investment company program. 

16 Subtitle II—Loan, Contracting, and 

17 Related Assistance Programs 

18 DIVISION A—GENERAL PROVISIONS 

19 CHAPTER 201—GENERAL PROVISIONS 

Sec. 

20101. Certification of compliance with child support obligations. 

20102. Authorities in carrying out programs for small business concerns in areas with high 

proportions of unemployed or low-income individuals and small business concerns 

owned by low-income individuals. 

20103. Extension or renewal of loans. 

20104. Deferral of repayment for active duty reservists. 

20105. Ownership interest arising from community property law. 

20 § 20101. Certification of compliance with child support obli21 gations 

22 (a) IN GENERAL.—A recipient of financial assistance under this subtitle 

23 shall certify that the recipient is not more than 60 days delinquent under 

24 the terms of any— 

25 (1) administrative order; 

26 (2) court order; or 

27 (3) repayment agreement entered into between the recipient and the 

28 custodial parent or State agency providing child support enforcement 

29 services; 

30 that requires the recipient to pay child support (as defined in section 459(i) 

31 of the Social Security Act (42 U.S.C. 659(i))). 

32 (b) ENFORCEMENT.—The Administrator shall promulgate such regula33 tions as are necessary to enforce compliance with this section. 


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1 § 20102. Authorities in carrying out programs for small busi2 ness concerns in areas with high proportions of 

3 unemployed or low-income individuals and small 

4 business concerns owned by low-income individ5 uals 

6 In carrying out section 20504 of this title and the business development 

7 program, the Administrator may— 

8 (1) use, with their consent, the services and facilities of Federal 

9 agencies without reimbursement, and, with the consent of any State or 

10 political subdivision of a State, accept and use the services and facili11 ties of the State or subdivision without reimbursement; 

12 (2) accept, in the name of the Administration, and employ or dispose 

13 of in furtherance of the purposes of this subtitle, any money or prop14 erty, real, personal, or mixed, tangible, or intangible, received by gift, 

15 devise, bequest, or otherwise; 

16 (3) accept voluntary and uncompensated services, notwithstanding 

17 section 1342 of title 31; and 

18 (4)(A) employ experts and consultants or organizations of experts 

19 and consultants as authorized by section 3109 of title 5, except that 

20 no individual may be employed under this subsection for more than 100 

21 days in any fiscal year; 

22 (B) compensate individuals employed under subparagraph (A) at 

23 rates not in excess of the daily equivalent of the highest rate payable 

24 under section 5332 of title 5, including travel time; 

25 (C) allow individuals employed under subparagraph (A), while away 

26 from their homes or regular places of business, travel expenses (includ27 ing per diem in lieu of subsistence) as authorized by section 5703 of 

28 title 5 for persons in the Government service employed intermittently, 

29 while so employed; and 

30 (D) notwithstanding section 3109(b) of title 5, renew contracts for 

31 employment under subparagraph (A) annually. 

32 § 20103. Extension or renewal of loans 

33 (a) IN GENERAL.—The Administrator may extend the maturity of or 

34 renew a loan under the general business loan program, disaster loan pro35 gram, or microloan program for additional periods not to exceed 10 years 

36 beyond the period stated in the loan if the extension or renewal will aid in 

37 the orderly liquidation of the loan. 

38 (b) INAPPLICABILITY TO CERTAIN DISASTER LOANS.—Subsection (a) 

39 does not apply to a loan under the disaster loan program that has a term 

40 of more than 20 years. 


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1 § 20104. Deferral of repayment for active duty reservists 

2 (a) DEFINITIONS.—In this section: 

3 (1) ELIGIBLE RESERVIST.—The term ‘‘eligible reservist’’ means a 

4 member of a reserve component of the Armed Forces ordered to active 

5 duty during a period of military conflict. 

6 (2) ESSENTIAL EMPLOYEE.—The term ‘‘essential employee’’ means 

7 an individual who is employed by a small business concern and whose 

8 managerial or technical expertise is critical to the successful day-to-day 

9 operations of the small business concern. 

10 (3) PERIOD OF MILITARY CONFLICT.—The term ‘‘period of military 

11 conflict’’ means— 

12 (A) a period of war declared by Congress; 

13 (B) a period of national emergency declared by Congress or by 

14 the President; or 

15 (C) a period of a contingency operation (as defined in section 

16 101(a) of title 10). 

17 (4) QUALIFIED BORROWER.—The term ‘‘qualified borrower’’ 

18 means— 

19 (A) an individual who is an eligible reservist and who received 

20 a direct loan under the general business loan program or a dis21 aster assistance program before being ordered to active duty; or 

22 (B) a small business concern that received a direct loan under 

23 the general business loan program or a disaster assistance pro24 gram before an eligible reservist, who is an essential employee, was 

25 ordered to active duty. 

26 (b) DEFERRAL OF DIRECT LOANS.— 

27 (1) IN GENERAL.—The Administrator shall, on written request, defer 

28 repayment of principal and interest due on a direct loan made under 

29 the general business loan program or a disaster assistance program if 

30 the loan was incurred by a qualified borrower. 

31 (2) PERIOD OF DEFERRAL.—The period of deferral for repayment 

32 under paragraph (1) shall begin on the date on which the eligible re33 servist is ordered to active duty and terminate on the date that is 180 

34 days after the date on which the eligible reservist is discharged or re35 leased from active duty. 

36 (3) INTEREST RATE REDUCTION DURING DEFERRAL.—Notwith37 standing any other provision of law, during the period of deferral under 

38 paragraph (2), the Administrator may reduce the interest rate on a 

39 loan qualifying for a deferral under this subsection. 

40 (c) DEFERRAL OF LOAN GUARANTEES AND OTHER FINANCINGS.—The 

41 Administrator shall— 


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1 (1) encourage intermediaries participating in the microloan program 

2 to defer repayment of a microloan made with proceeds made available 

3 under the microloan program, if the microloan was incurred by a small 

4 business concern that is eligible to apply for assistance under section 

5 21303 of this title; and 

6 (2) establish guidelines to— 

7 (A) encourage lenders and other intermediaries to defer repay8 ment of, or provide other relief relating to— 

9 (i) loan guarantees under the general business loan pro10 gram and financings under the certified development company 

11 program that were incurred by small business concerns that 

12 are eligible to apply for assistance under section 21303 of 

13 this title; and 

14 (ii) loan guarantees provided under the microloan program 

15 if the intermediary provides relief to a small business concern 

16 under this subsection; and 

17 (B) implement a program to provide for the deferral of repay18 ment or other relief to any intermediary providing relief to a small 

19 business borrower under this subsection. 

20 § 20105. Ownership interest arising from community prop21 erty law 

22 Ownership requirements to determine the eligibility of a small business 

23 concern that applies for assistance under any credit program under this 

24 subtitle shall be determined without regard to any ownership interest of a 

25 spouse arising solely from the application of the community property law 

26 of a State for purposes of determining marital interests. 

27 DIVISION B—GENERAL BUSINESS LOAN 

28 PROGRAM 

29 CHAPTER 203—GENERAL PURPOSE LOANS 

Sec. 

20301. Loan authority. 

20302. Methods of participation. 

20303. No credit elsewhere. 

20304. Sound and secure requirement. 

20305. Level of participation in guaranteed loans. 

20306. Maximum loan amounts. 

20307. Interest rates. 

20308. Prepayment charges. 

20309. Maximum term. 

20310. Deferment of payments. 

20311. Guarantee fees. 

20312. Certified lenders program. 

20313. Penalty fee on late payment. 

20314. Yearly fee. 

20315. Notification to Congress of significant policy or administrative changes. 

20316. Pilot programs. 

20317. Calculation of subsidy rate. 

20318. Leasing. 


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20319. Real estate appraisals. 

20320. Express loan program. 

20321. Loan application preparation and loan servicing by qualified development companies. 

20322. Increased veteran/reservist participation program. 

1 § 20301. Loan authority 

2 To the extent and in such amounts as are provided in advance in appro3 priation Acts, the Administrator may make loans to small business concerns 

4 (including a small business concern owned by a qualified Indian tribe) for 

5 plant acquisition, construction, conversion, or expansion, including the ac6 quisition of land, material, supplies, equipment, and working capital. 

7 § 20302. Methods of participation 

8 The Administrator may make a loan under section 20301 of this title— 

9 (1) directly; or 

10 (2) in cooperation with a bank or other lending institution or any 

11 other entity through an agreement to participate on an immediate or 

12 deferred (guaranteed) basis. 

13 § 20303. No credit elsewhere 

14 (a) IN GENERAL.—No financial assistance shall be extended under the 

15 general business loan program if the applicant can obtain credit elsewhere. 

16 (b) IMMEDIATE PARTICIPATION.—No immediate participation may be 

17 purchased unless it is shown that a deferred participation is not available. 

18 (c) DIRECT FINANCING.—No direct financing may be made unless it is 

19 shown that a participation is not available. 

20 § 20304. Sound and secure requirement 

21 (a) IN GENERAL.—A loan made under the general business loan program 

22 shall be of such sound value or so secured as reasonably to ensure repay23 ment. 

24 (b) REASONABLE DOUBT.—In applying subsection (a) in the case of a 

25 loan to assist a public or private organization for the disabled or to assist 

26 a disabled individual as provided in section 20503 of this title, any reason27 able doubt shall be resolved in favor of the applicant. 

28 (c) ENERGY MEASURES.—Recognizing that greater risk may be associ29 ated with a loan for an energy measure as provided in section 20505 of this 

30 title, in applying subsection (a) in the case of such a loan— 

31 (1) factors in determining sound value shall include— 

32 (A) quality of the product or service; 

33 (B) technical qualifications of the applicant or employees of the 

34 applicant; 

35 (C) sales projections; and 

36 (D) the financial status of the applicant; and 

37 (2) the loan need not be as sound as is generally required for a loan 

38 under the general business loan program. 


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1 (d) NO DELEGATION OF AUTHORITY.—The authority conferred by this 

2 subsection shall be exercised solely by Administration personnel and shall 

3 not be delegated to other than Administration personnel. 

4 § 20305. Level of participation in guaranteed loans 

5 (a) IN GENERAL.—Except as provided in subsection (b), in an agreement 

6 to participate in a loan on a deferred basis under the general business loan 

7 program (including a loan made under the preferred lenders program), par8 ticipation by the Administrator shall be equal to— 

9 (1) 75 percent of the balance of the financing outstanding at the 

10 time of disbursement of the loan, if the balance exceeds $150,000; or 

11 (2) 85 percent of the balance of the financing outstanding at the 

12 time of disbursement of the loan, if the balance is less than or equal 

13 to $150,000. 

14 (b) REDUCED PARTICIPATION ON REQUEST.— 

15 (1) IN GENERAL.—The guarantee percentage specified by subsection 

16 (a) for a loan under the general business loan program may be reduced 

17 on the request of the participating lender. 

18 (2) PROHIBITION.—The Administrator shall not use the guarantee 

19 percentage requested by a participating lender under paragraph (1) as 

20 a criterion for establishing priorities in approving loan guarantee re21 quests under the general business loan program. 

22 (c) PARTICIPATION UNDER EXPORT WORKING CAPITAL PROGRAM.—Not23 withstanding subsection (a), under an agreement to participate in a loan on 

24 a deferred basis under the export working capital program, participation by 

25 the Administrator shall not exceed 90 percent. 

26 (d) REFINANCING OF INDEBTEDNESS.—On any portion of a loan used to 

27 refinance indebtedness held by a bank or other lending institution, the Ad28 ministrator shall limit the amount of deferred participation to 80 percent 

29 of the amount of the loan at the time of disbursement. 

30 § 20306. Maximum loan amounts 

31 (a) IN GENERAL.—Except as provided in subsection (b) and subject to 

32 subsection (c), no loan shall be made to a borrower under the general busi33 ness loan program if the total amount outstanding and committed (on a de34 ferred basis, through a participation on an immediate basis, or directly) to 

35 the borrower under the general business loan program and microloan pro36 gram would exceed $1,500,000 (or if the gross loan amount would exceed 

37 $2,000,000). 

38 (b) SMALL BUSINESS CONCERN IN INDUSTRY ENGAGED IN OR AD39 VERSELY AFFECTED BY INTERNATIONAL TRADE.—A loan solely for the 

40 purposes provided in section 20510 of this title may be made under the gen41 eral business loan program and microloan program if the total amount outVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 standing and committed (on a deferred basis) to the borrower under the 

2 general business loan program would not exceed $1,750,000, of which not 

3 more than $1,250,000 may be used for working capital, supplies, or 

4 financings under section 20508 of this title for export purposes. 

5 (c) DIRECT LOANS; PARTICIPATION ON AN IMMEDIATE BASIS.—No loan 

6 shall be made under the general business loan program, either directly or 

7 in cooperation with banks or other lending institutions through agreements 

8 to participate on an immediate basis, if the amount would exceed $350,000. 

9 § 20307. Interest rates 

10 (a) MAXIMUM RATE PRESCRIBED BY THE ADMINISTRATOR.—Notwith11 standing the provisions of the constitution of any State or the laws of any 

12 State limiting the rate or amount of interest that may be charged, taken, 

13 received, or reserved, the maximum legal rate of interest on a financing 

14 made on a deferred basis under the general business loan program shall not 

15 exceed a rate prescribed by the Administrator. 

16 (b) DIRECT LOANS AND IMMEDIATE PARTICIPATION LOANS.—The rate 

17 of interest for the Administrator’s share of any direct loan or immediate 

18 participation loan under the general business loan program shall not exceed 

19 the current average market yield on outstanding marketable obligations of 

20 the United States with remaining periods to maturity comparable to the av21 erage maturities of such loans and adjusted to the nearest 0.125 percent, 

22 and an additional amount as determined by the Administrator, but not to 

23 exceed one percent per year. 

24 (c) PREFERRED LENDERS PROGRAM.—The maximum interest rate for a 

25 loan under the general business loan program that is guaranteed under the 

26 preferred lenders program shall not exceed the maximum interest rate, as 

27 determined by the Administrator, applicable to other loans guaranteed 

28 under the general business loan program. 

29 (d) LOANS TO ASSIST THE DISABLED.—In the case of a loan under the 

30 general business loan program to assist a public or private organization for 

31 the disabled or to assist a disabled individual as provided in section 20503 

32 of this title, the interest rate shall be 3 percent per year. 

33 (e) PAYMENT OF ACCRUED INTEREST.— 

34 (1) IN GENERAL.—A bank or other lending institution making a 

35 claim for payment on the guaranteed portion of a loan made under the 

36 general business loan program shall be paid the accrued interest due 

37 on the loan from the earliest date of default to the date of payment 

38 of the claim at a rate not to exceed the rate of interest on the loan 

39 on the date of default, minus one percent. 

40 (2) LOANS SOLD ON SECONDARY MARKET.—If a loan described in 

41 paragraph (1) is sold on the secondary market, the amount of interest 


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1 paid to a bank or other lending institution described in that paragraph 

2 from the earliest date of default to the date of payment of the claim 

3 shall be no more than the agreed upon rate, minus one percent. 

4 (3) APPLICABILITY.—Paragraphs (1) and (2) do not apply to loans 

5 made on or after October 1, 2000. 

6 § 20308. Prepayment charges 

7 (a) IN GENERAL.—A borrower that prepays a loan guaranteed under the 

8 general business loan program shall remit to the Administrator a subsidy 

9 recoupment fee calculated in accordance with subsection (b) if— 

10 (1) the loan is for a term of not less than 15 years; 

11 (2) the prepayment is voluntary; 

12 (3) the amount of prepayment in any calendar year is more than 25 

13 percent of the outstanding balance of the loan; and 

14 (4) the prepayment is made within the first 3 years after disburse15 ment of the loan proceeds. 

16 (b) SUBSIDY RECOUPMENT FEE.—The subsidy recoupment fee charged 

17 under subsection (a) shall be— 

18 (1) 5 percent of the amount of prepayment, if the borrower prepays 

19 during the first year after disbursement; 

20 (2) 3 percent of the amount of prepayment, if the borrower prepays 

21 during the second year after disbursement; and 

22 (3) one percent of the amount of prepayment, if the borrower pre23 pays during the third year after disbursement. 

24 § 20309. Maximum term 

25 (a) IN GENERAL.—Except as provided in subsection (b), no loan (includ26 ing a loan renewal or extension) shall be made under the general business 

27 loan program for a term or terms exceeding 25 years. 

28 (b) EXCEPTION.—Any portion of a loan that is made under the general 

29 business loan program for the purpose of acquiring real property or con30 structing, converting, or expanding a facility may have a term of 25 years 

31 plus such additional period as is estimated may be required to complete the 

32 construction, conversion, or expansion. 

33 § 20310. Deferment of payments 

34 The Administrator may defer payments on the principal of a loan under 

35 the general business loan program for a grace period, and use such other 

36 methods as the Administrator considers necessary and appropriate, to en37 sure the successful establishment and operation of a small business concern. 

38 § 20311. Guarantee fees 

39 (a) IN GENERAL.—With respect to a loan guaranteed under the general 

40 business loan program (other than a loan that is repayable in one year or 


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1 less), the Administrator shall collect a guarantee fee, which shall be payable 

2 by the participating lender, and may be charged to the borrower, as follows: 

3 (1) A guarantee fee of not to exceed 2 percent of the deferred par4 ticipation share of a total loan amount that is not more than $150,000. 

5 (2) A guarantee fee of not to exceed 3 percent of the deferred par6 ticipation share of a total loan amount that is more than $150,000, 

7 but not more than $700,000. 

8 (3) A guarantee fee of not to exceed 3.5 percent of the deferred par9 ticipation share of a total loan amount that is more than $700,000. 

10 (4) In addition to the guarantee fee under paragraph (3), a guar11 antee fee equal to 0.25 percent of any portion of the deferred participa12 tion share that is more than $1,000,000. 

13 (b) RETENTION OF CERTAIN FEES.—A lender participating in the gen14 eral business loan program may retain not more than 25 percent of a fee 

15 collected under subsection (a)(1). 

16 § 20312. Certified lenders program 

17 (a) IN GENERAL.—The Administrator may establish a certified lenders 

18 program for lenders that establish their knowledge of Administration laws 

19 (including regulations) concerning the guaranteed loan program and their 

20 proficiency in program requirements. 

21 (b) SUSPENSION OR REVOCATION.—The designation of a lender as a cer22 tified lender shall be suspended or revoked at any time that the Adminis23 trator determines that the lender is not adhering to regulations prescribed 

24 by the Administrator or that the loss experience of the lender is excessive 

25 as compared with that of other lenders, but the suspension or revocation 

26 shall not affect any outstanding guarantee. 

27 (c) UNIFORM AND SIMPLIFIED LOAN FORM.—To encourage all lending 

28 institutions and other entities making loans under the general business loan 

29 program to provide loans of $50,000 or less in guarantees to eligible small 

30 business loan applicants, the Administrator shall develop, and allow partici31 pating lenders to solely use, a uniform and simplified loan form for such 

32 loans. 

33 (d) LOAN LIQUIDATION.— 

34 (1) IN GENERAL.—The Administrator may permit a lender partici35 pating in the certified lenders program to liquidate a loan made with 

36 a guarantee from the Administrator in accordance with a liquidation 

37 plan approved by the Administrator. 

38 (2) AUTOMATIC APPROVAL.—If the Administrator does not approve 

39 or deny a request for approval of a liquidation plan within 10 business 

40 days after the date on which the request is made (or with respect to 


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1 any routine liquidation activity under such a plan, within 5 business 

2 days), the request shall be deemed to be approved. 

3 § 20313. Penalty fee on late payment 

4 The Administrator may permit a participating lender to impose and col5 lect a reasonable penalty fee on late payment of a loan guaranteed under 

6 the general business loan program in an amount not to exceed 5 percent 

7 of the monthly loan payment per month plus interest. 

8 § 20314. Yearly fee 

9 (a) DEFINITION OF COST.—In this section, the term ‘‘cost’’ has the 

10 meaning given the term in section 502 of the Federal Credit Reform Act 

11 of 1990 (2 U.S.C. 661a). 

12 (b) FEE.—With respect to a loan approved under the general business 

13 loan program, the Administrator shall assess, collect, and retain a fee, not 

14 to exceed 0.55 percent per year of the outstanding balance of the deferred 

15 participation share of the loan, in an amount established once annually by 

16 the Administrator in the Administrator’s annual budget request to Con17 gress, as necessary to reduce to zero the cost to the Administrator of mak18 ing guarantees under the general business loan program. 

19 (c) PAYER.—The yearly fee assessed under subsection (b) shall be pay20 able by the participating lender and shall not be charged to the borrower. 

21 (d) LOWERING OF BORROWER FEES.—If the Administrator determines 

22 that fees paid by lenders and by small business borrowers for guarantees 

23 under the general business loan program may be reduced, consistent with 

24 reducing to zero the cost to the Administrator of making such guarantees— 

25 (1) the Administrator shall first consider reducing fees paid by small 

26 business borrowers under paragraphs (1) to (3) of section 20311(a) of 

27 this title, to the maximum extent possible; and 

28 (2) fees paid by small business borrowers shall not be increased 

29 above the levels in effect on December 8, 2004. 

30 § 20315. Notification to Congress of significant policy or ad31 ministrative changes 

32 Not later than 15 days before making any significant policy or adminis33 trative change affecting the operation of the general business loan program, 

34 the Administrator shall notify the Committee on Small Business and Entre35 preneurship of the Senate and the Committee on Small Business of the 

36 House of Representatives of the change. 

37 § 20316. Pilot programs 

38 (a) DEFINITION OF PILOT PROGRAM.—In this section, the term ‘‘pilot 

39 program’’ means a lending program initiative, project, innovation, or other 

40 activity not specifically authorized by law. 


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1 (b) LIMITATION.—Not more than 10 percent of the number of loans 

2 guaranteed in any fiscal year under the general business loan program may 

3 be awarded as part of a pilot program commenced on or after October 1, 

4 1996. 

5 (c) LOW DOCUMENTATION LOAN PROGRAM.— 

6 (1) IN GENERAL.—The Administrator may carry out the low docu7 mentation loan program for loans of $100,000 or less only through 

8 lenders with significant experience in making small business loans. 

9 (2) REGULATIONS.—The Administrator shall promulgate regulations 

10 defining the experience necessary for participation as a lender in the 

11 low documentation loan program. 

12 § 20317. Calculation of subsidy rate 

13 All fees, interest, and profits received and retained by the Administrator 

14 under the general business loan program shall be included in the calcula15 tions made by the Director of the Office of Management and Budget to off16 set the cost (as defined in section 502 of the Federal Credit Reform Act 

17 of 1990 (2 U.S.C. 661a)) to the Administrator of purchasing and guaran18 teeing loans under this subtitle. 

19 § 20318. Leasing 

20 In addition to such other lease arrangements as the Administrator may 

21 authorize, a borrower may permanently lease to one or more tenants not 

22 more than 20 percent of any property constructed with the proceeds of a 

23 loan guaranteed under the general business loan program if the borrower 

24 permanently occupies and uses not less than 60 percent of the total business 

25 space in the property. 

26 § 20319. Real estate appraisals 

27 With respect to a loan under the general business loan program that is 

28 secured by commercial real property, an appraisal of the property by a State 

29 licensed or certified appraiser— 

30 (1) shall be required by the Administrator in connection with any 

31 such loan for more than $250,000; or 

32 (2) may be required by the Administrator or the lender in connection 

33 with any such loan for $250,000 or less, if an appraisal is necessary 

34 for appropriate evaluation of creditworthiness. 

35 § 20320. Express loan program 

36 (a) RESTRICTION TO EXPRESS LENDER.—The authority to make an ex37 press loan shall be limited to lenders that the Administrator considers quali38 fied to make express loans. 

39 (b) EFFECT OF DESIGNATION.—Designation as an express lender for 

40 purposes of making an express loan does not preclude the lender from takVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00088 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 ing any other action authorized by the Administrator for that lender under 

2 the general business loan program. 

3 (c) RETENTION OF DESIGNATION OF EXPRESS LENDER.—An express 

4 lender shall retain that designation unless— 

5 (1) the Administrator determines that the express lender has violated 

6 the law (including regulations); or 

7 (2) the Administrator modifies the requirements to be an express 

8 lender and the lender no longer satisfies those requirements. 

9 (d) MAXIMUM LOAN AMOUNT.—The maximum loan amount under the 

10 express loan program is $350,000. 

11 (e) OPTION TO PARTICIPATE.—Except as otherwise provided in this sec12 tion, the Administrator shall take no regulatory, policy, or administrative 

13 action, without regard to whether the action requires notification under sec14 tion 20315 of this title, that has the effect of requiring a lender to make 

15 an express loan. 

16 (f) RENEWABLE ENERGY AND ENERGY EFFICIENCY.—The Administrator 

17 may make a loan under the express loan program for the purpose of— 

18 (1) purchasing a renewable energy system; or 

19 (2) carrying out an energy efficiency project for a small business 

20 concern. 

21 § 20321. Loan application preparation and loan servicing by 

22 qualified development companies 

23 Notwithstanding any other provision of law, a qualified development com24 pany (as defined in section 33101 of this title) may— 

25 (1) prepare applications for deferred participation loans under the 

26 general business loan program; and 

27 (2) service loans under the general business loan program and 

28 charge a reasonable fee for servicing the loans. 

29 § 20322. Increased veteran/reservist participation program 

30 (a) DEFINITIONS.—In this section: 

31 (1) COST.—The term ‘‘cost’’ has the meaning given the term in sec32 tion 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). 

33 (2) PILOT PROGRAM.—The term ‘‘pilot program’’ means the pilot 

34 program established under subsection (b). 

35 (3) VETERAN/RESERVIST PARTICIPATION LOAN.—The term ‘‘veteran/ 

36 reservist participation loan’’ means a loan made under the general busi37 ness loan program to a small business concern owned and controlled 

38 by veterans or by reservists. 

39 (b) ESTABLISHMENT.—The Administrator shall establish and carry out a 

40 pilot program under which the Administrator shall reduce the fees for vet41 eran/reservist participation loans. 


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1 (c) DURATION.—The pilot program shall terminate at the end of the sec2 ond full fiscal year after the date on which the Administrator establishes 

3 the pilot program. 

4 (d) MAXIMUM PARTICIPATION.—A veteran/reservist participation loan 

5 shall include the maximum participation levels by the Administrator per6 mitted for loans made under the general business loan program. 

7 (e) FEES.— 

8 (1) IN GENERAL.—The fee on a veteran/reservist participation loan 

9 shall be equal to 50 percent of the fee otherwise applicable to that loan 

10 under section 20311 of this title. 

11 (2) WAIVER.—The Administrator may waive paragraph (1) for a fis12 cal year if— 

13 (A) for the fiscal year before that fiscal year, the annual esti14 mated rate of default of veteran/reservist participation loans ex15 ceeds that of loans made under the general business loan program 

16 that are not veteran/reservist participation loans; 

17 (B) the cost to the Administrator of making loans under the 

18 general business loan program is greater than zero and the cost 

19 is directly attributable to the cost of making veteran/reservist par20 ticipation loans; and 

21 (C) no additional source of revenue authority is available to re22 duce the cost of making loans under the general business loan pro23 gram to zero. 

24 (3) EFFECT OF WAIVER.—If the Administrator waives the reduction 

25 of fees under paragraph (2), the Administrator— 

26 (A) shall not assess or collect fees in an amount greater than 

27 necessary to ensure that the cost of the general business loan pro28 gram is not greater than zero; and 

29 (B) shall reinstate the fee reductions under paragraph (1) when 

30 the conditions in paragraph (2) no longer apply. 

31 (4) NO INCREASE OF FEES.—The Administrator shall not increase 

32 the fees under 20311 of this title on loans made under the general 

33 business loan program that are not veteran/reservist participation loans 

34 as a direct result of the pilot program. 

35 (f) GAO REPORT.— 

36 (1) IN GENERAL.—Not later than one year after the date on which 

37 the pilot program terminates, the Comptroller General shall submit to 

38 the Committee on Small Business of the House of Representatives and 

39 the Committee on Small Business and Entrepreneurship of the Senate 

40 a report on the pilot program. 

41 (2) CONTENTS.—The report under paragraph (1) shall include— 


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1 (A) the number of veteran/reservist participation loans for which 

2 fees were reduced under the pilot program; 

3 (B) a description of the impact of the pilot program on the gen4 eral business loan program; 

5 (C) an evaluation of the efficacy and potential fraud and abuse 

6 of the pilot program; and 

7 (D) recommendations for improving the pilot program. 

8 CHAPTER 205—SPECIAL PURPOSE LOANS 

Sec. 

20501. Applicability of chapter 203. 

20502. Residential or commercial construction or rehabilitation for sale. 

20503. The disabled. 

20504. Unemployed or low-income individuals. 

20505. Energy measures. 

20506. Pollution control facilities. 

20507. Certified development companies. 

20508. Export working capital program. 

20509. Qualified employee trusts. 

20510. International trade. 

20511. Business development. 

20512. Closure of defense installations; termination of defense programs; veterans and certain 

other individuals associated with defense. 

20513. Loans for energy efficient technologies. 

9 § 20501. Applicability of chapter 203 

10 The provisions of chapter 203 apply to this chapter except to the extent 

11 that any such provision is inconsistent with a provision of this chapter. 

12 § 20502. Residential or commercial construction or rehabili13 tation for sale 

14 (a) IN GENERAL.—The Administrator may provide a loan under the gen15 eral business loan program to finance residential or commercial construction 

16 or rehabilitation for sale. 

17 (b) LIMITATION.—A loan under subsection (a) shall not be used primarily 

18 for the acquisition of land. 

19 § 20503. The disabled 

20 The Administrator may provide a guaranteed loan under the general busi21 ness loan program to assist a public or private organization for the disabled 

22 or a disabled individual (including a service-disabled veteran) in estab23 lishing, acquiring, or operating a small business concern. 

24 § 20504. Unemployed or low-income individuals 

25 (a) IMPLEMENTATION.—The general business loan program shall be used 

26 to— 

27 (1) assist in the establishment, preservation, and strengthening of 

28 small business concerns and improve the managerial skills employed in 

29 small business concerns, with special attention to, and particular em30 phasis on the preservation or establishment of, small business concerns 

31 that are— 


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1 (A) located in urban or rural areas with high proportions of un2 employed or low-income individuals; or 

3 (B) owned by low-income individuals; and 

4 (2) mobilize for those objectives private as well as public managerial 

5 skills and resources. 

6 (b) LOAN AUTHORITY.—The Administrator may provide a loan under the 

7 general business loan program to a small business concern or to a qualified 

8 person seeking to establish a small business concern if the Administrator 

9 determines that providing the loan will further the purposes stated in sub10 section (a). 

11 § 20505. Energy measures 

12 (a) IN GENERAL.—The Administrator may provide a loan under the gen13 eral business loan program to provide assistance (including startup assist14 ance) to a small business concern to enable the small business concern to 

15 design architecturally, or engineer, manufacture, distribute, market, install, 

16 or service, an energy measure. 

17 (b) LIMITATION.—The proceeds of a loan under subsection (a) shall not 

18 be used primarily for research and development. 

19 § 20506. Pollution control facilities 

20 (a) IN GENERAL.—The Administrator may provide a deferred participa21 tion loan under the general business loan program to finance the planning, 

22 design, or installation of a pollution control facility for the purposes speci23 fied in section 404 of the Small Business Investment Act of 1958 (15 

24 U.S.C. 694–1), as in effect before the date of repeal of that section. 

25 (b) LIMIT ON AMOUNT.—A loan under subsection (a) may not result in 

26 a total amount outstanding and committed (on a deferred basis) to a bor27 rower under the general business loan program and microloan program of 

28 more than $1,000,000. 

29 § 20507. Certified development companies 

30 The Administrator may provide financing under the general business loan 

31 program to certified development companies for the purposes of, and subject 

32 to the restrictions in, the certified development company program. 

33 § 20508. Export working capital program 

34 (a) IN GENERAL.—The Administrator may provide extensions of credit, 

35 standby letters of credit, revolving lines of credit for export purposes, and 

36 other financing to enable small business concerns (including small business 

37 export trading companies and small business export management compa38 nies) to develop foreign markets. 

39 (b) RATE OF INTEREST.—A bank or participating lending institution may 

40 establish such a rate of interest on a financing under subsection (a) as is 

41 legal and reasonable. 


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1 (c) CONSIDERATIONS.—When considering a loan or guarantee application, 

2 the Administrator shall give weight to export-related benefits, including the 

3 opening of new markets for United States goods and services abroad and 

4 encouraging the involvement of small business concerns (including agricul5 tural concerns) in the export market. 

6 (d) MARKETING OF EXPORT FINANCING PROGRAM.—The Administrator 

7 shall aggressively market the export working capital program to small busi8 ness concerns. 

9 § 20509. Qualified employee trusts 

10 (a) DEFINITION OF QUALIFIED EMPLOYEE TRUST.—In this section: 

11 (1) TRUST MAINTAINED BY SMALL BUSINESS CONCERN.—The term 

12 ‘‘qualified employee trust’’, with respect to a small business concern, 

13 means a trust— 

14 (A) that forms part of an employee stock ownership plan (as de15 fined in section 4975(e) of the Internal Revenue Code of 1986 (26 

16 U.S.C. 4975(e)) that— 

17 (i) is maintained by the small business concern; and 

18 (ii) provides that each participant in the plan is entitled to 

19 direct the plan as to the manner in which voting rights under 

20 qualifying employer securities (as defined in section 4975(e) 

21 of the Internal Revenue Code of 1986 (26 U.S.C. 4975(e)) 

22 that are allocated to the account of the participant are to be 

23 exercised with respect to a corporate matter that (by law or 

24 charter) must be decided by a majority vote of outstanding 

25 common shares voted; and 

26 (B) the trustee of which enters into an agreement with the Ad27 ministrator that is binding on the trust and on the small business 

28 concern and provides that— 

29 (i) a loan guaranteed under the general business loan pro30 gram shall be used solely for the purchase of qualifying em31 ployer securities of the small business concern; 

32 (ii) all funds acquired by the small business concern in the 

33 purchase shall be used by the small business concern solely 

34 for the purposes for which the loan was guaranteed; 

35 (iii) the small business concern will provide such funds as 

36 are necessary for the timely repayment of the loan, and the 

37 property of the small business concern shall be available as 

38 security for repayment of the loan; and 

39 (iv) all qualifying employer securities acquired by the trust 

40 in the purchase shall be allocated to the accounts of partici41 pants in the plan who are entitled to share in the allocation, 


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1 and each participant has a nonforfeitable right, not later than 

2 the date on which the loan is repaid, to all such qualifying 

3 employer securities that are allocated to the participant’s ac4 count. 

5 (2) TRUST MAINTAINED BY EMPLOYEE ORGANIZATION.—A trust 

6 maintained by an employee organization may be treated as a qualified 

7 employee trust with respect to a small business concern in accordance 

8 with regulations prescribed under subsection (f). 

9 (b) IN GENERAL.—The Administrator may guarantee a loan under the 

10 general business loan program to a qualified employee trust with respect to 

11 a small business concern, on the same basis as if the qualified employee 

12 trust were the same entity as the small business concern, for the purpose 

13 of purchasing stock of the small business concern under a plan approved 

14 by the Administrator that, when carried out, results in the qualified em15 ployee trust owning at least 51 percent of the stock of the small business 

16 concern. 

17 (c) PLAN.— 

18 (1) SUBMISSION WITH APPLICATION.—A plan requiring approval 

19 under subsection (b) shall be submitted to the Administrator by the 

20 trustee of the qualified employee trust with the application for a loan 

21 guarantee. 

22 (2) AGREEMENT.—The plan shall include an agreement with the Ad23 ministrator that is binding on the qualified employee trust and on the 

24 small business concern and provides that— 

25 (A) not later than the date on which the loan guaranteed under 

26 subsection (b) is repaid (or as soon after that date as is consistent 

27 with the requirements of section 401(a) of the Internal Revenue 

28 Code of 1986 (26 U.S.C. 401(a))), at least 51 percent of the total 

29 stock of the small business concern shall be allocated to the ac30 counts of at least 51 percent of the employees of the small busi31 ness concern who are entitled to share in the allocation; 

32 (B) there will be periodic reviews of the role in the management 

33 of the small business concern of employees to whose accounts 

34 stock is allocated; and 

35 (C) there will be adequate management to ensure management 

36 expertise and continuity. 

37 (d) CRITERIA.— 

38 (1) IN GENERAL.—Except as provided in paragraph (2), in deter39 mining whether to guarantee a loan under this section, the Adminis40 trator shall not use the individual business experience or personal as41 sets of employee-owners as criteria. 


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1 (2) EXCEPTION.—To the that extent that any employee-owner as2 sumes managerial responsibilities, the Administrator may consider the 

3 business expertise of that employee-owner. 

4 (e) TREATMENT OF CORPORATION AS SMALL BUSINESS CONCERN.—For 

5 purposes of this section, a corporation that is controlled by any other person 

6 shall be treated as a small business concern if the corporation would, after 

7 the plan under subsection (c) is carried out, be treated as a small business 

8 concern. 

9 (f) REGULATIONS RELATING TO TREATMENT OF A TRUST MAINTAINED

10 BY AN EMPLOYEE ORGANIZATION.—The Administrator may prescribe regu11 lations under which a trust maintained by an employee organization may 

12 be treated as a qualified employee trust with respect to a small business 

13 concern if— 

14 (1) the employee organization represents at least 51 percent of the 

15 employees of the small business concern; 

16 (2) the small business concern maintains a plan that— 

17 (A) is an employee benefit plan that is designed to invest pri18 marily in qualifying employer securities (as defined in section 

19 4975(e) of the Internal Revenue Code of 1986 (26 U.S.C. 

20 4975(e))); 

21 (B) provides that each participant in the plan is entitled to di22 rect the plan as to the manner in which voting rights under quali23 fying employer securities that are allocated to the account of the 

24 participant are to be exercised with respect to a corporate matter 

25 that (by law or charter) must be decided by a majority vote of the 

26 outstanding common shares voted; 

27 (C) provides that each participant who is entitled to distribution 

28 from the plan has a right, in the case of qualifying employer secu29 rities that are not readily tradable on an established market, to 

30 require that the small business concern repurchase the securities 

31 under a fair valuation formula; and 

32 (D) meets such other requirements (similar to requirements ap33 plicable to employee stock ownership plans (as defined in section 

34 4975(e) of the Internal Revenue Code of 1986 (26 U.S.C. 

35 4975(e))) as the Administrator may prescribe; and 

36 (3) in the case of a loan guarantee under the general business loan 

37 program, the employee organization enters into an agreement with the 

38 Administrator that is described in subsection (a)(1)(B). 

39 (g) REPORTS.—The Administrator shall— 


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1 (1) compile a separate list of applications for assistance under this 

2 section, indicating which applications are accepted and which denied; 

3 and 

4 (2) periodically submit to Congress a report on the status of em5 ployee-owned firms assisted by the Administrator. 

6 § 20510. International trade 

7 (a) IN GENERAL.—If the Administrator determines that a loan guaran8 teed under the general business loan program will allow an eligible small 

9 business concern that is engaged in or adversely affected by international 

10 trade to improve its competitive position, the Administrator may provide a 

11 loan guarantee to assist the small business concern in— 

12 (1) the financing of the acquisition, construction, renovation, mod13 ernization, improvement, or expansion of productive facilities or equip14 ment to be used in the United States in the production of a good or 

15 service involved in international trade; or 

16 (2) the refinancing of existing indebtedness that is not structured 

17 with reasonable terms and conditions. 

18 (b) SECURITY.—A loan under this section shall be secured by a first lien 

19 position or first mortgage on the property or equipment financed by the 

20 loan or on other assets of the small business concern. 

21 (c) ENGAGEMENT IN INTERNATIONAL TRADE.—For purposes of this sec22 tion, a small business concern shall be considered to be engaged in inter23 national trade if, as determined by the Administrator, the small business 

24 concern is in a position to expand existing export markets or develop new 

25 export markets. 

26 (d) ADVERSE EFFECT OF INTERNATIONAL TRADE.—For purposes of this 

27 section, a small business concern shall be considered to be adversely affected 

28 by international trade if, as determined by the Administrator, the small 

29 business concern— 

30 (1) is confronting increased competition with foreign firms in the rel31 evant market; and 

32 (2) is injured by such competition. 

33 (e) FINDINGS BY CERTAIN FEDERAL AGENCIES.—For purposes of sub34 section (d)(2), the Administrator shall accept any finding of injury by the 

35 International Trade Commission or any finding of injury by the Secretary 

36 of Commerce under chapter 3 of title II of the Trade Act of 1974 (19 

37 U.S.C. 2341 et seq.). 

38 § 20511. Business development 

39 (a) IN GENERAL.—The Administrator may make a loan under the gen40 eral business loan program to a small business concern that is eligible for 

41 assistance under the business development program. 


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1 (b) REQUIREMENTS.—Assistance may be provided under subsection (a) if 

2 the Administrator determines that— 

3 (1) the type and amount of assistance requested by a small business 

4 concern is not otherwise available on reasonable terms from other 

5 sources; 

6 (2) with the assistance, the small business concern has a reasonable 

7 prospect for operating soundly and profitably within a reasonable pe8 riod of time; 

9 (3) the proceeds of the assistance will be used within a reasonable 

10 time— 

11 (A) for plant construction, conversion, or expansion, including 

12 the acquisition of equipment, facilities, machinery, supplies, or ma13 terial; or 

14 (B) to supply the small business concern with working capital 

15 to be used in the manufacture of articles, equipment, supplies, or 

16 material for defense or civilian production or as may be necessary 

17 to ensure a well-balanced national economy; and 

18 (4) the assistance is of such sound value as reasonably to ensure that 

19 the terms under which the assistance is provided will not be breached 

20 by the small business concern. 

21 (c) LIMIT ON AMOUNT.— 

22 (1) IN GENERAL.—No loan shall be made under this section if the 

23 total amount outstanding and committed (on a deferred basis, through 

24 a participation on an immediate basis, or directly) to the borrower 

25 under the general business loan program would exceed $750,000. 

26 (2) AMOUNT OF PARTICIPATION.—Subject to paragraph (1), in an 

27 agreement to participate in a loan on a deferred (guaranteed) basis, 

28 participation by the Administrator shall be not less than 85 percent of 

29 the balance of the financing outstanding at the time of disbursement. 

30 (d) RATE OF INTEREST.—The rate of interest on a financing made on 

31 a deferred (guaranteed) basis shall be an amount that is legal and reason32 able. 

33 (e) LIMITATIONS.— 

34 (1) IN GENERAL.—A financing under this section shall be subject to 

35 the limitations stated in this subsection. 

36 (2) IMMEDIATE FINANCING.—No immediate participation may be 

37 purchased unless it is shown that a deferred participation is not avail38 able. 

39 (3) DIRECT FINANCING.—No direct financing may be made unless 

40 it is shown that a participation is unavailable. 


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1 (f) SECURED DEBT INSTRUMENT.—A direct loan or the Administrator’s 

2 share of an immediate participation loan under this section shall be any se3 cured debt instrument— 

4 (1) that is subordinated by its terms to all other borrowings of the 

5 issuer; 

6 (2) the rate of interest on which does not exceed the current average 

7 market yield on outstanding marketable obligations of the United 

8 States with remaining periods to maturity comparable to the average 

9 maturities of such loans and adjusted to the nearest 0.125 percent; 

10 (3) the term of which is not more than 25 years; 

11 (4) the principal on which is amortized at such a rate as the Admin12 istrator considers appropriate; and 

13 (5) the interest on which is payable not less often than annually. 

14 § 20512. Closure of defense installations; termination of de15 fense programs; veterans and certain other indi16 viduals associated with defense 

17 (a) DEFINITION OF QUALIFIED INDIVIDUAL.—In this section, the term 

18 ‘‘qualified individual’’ means— 

19 (1) a member of the Armed Forces honorably discharged from active 

20 duty involuntarily or under a program providing bonuses or other in21 ducements to encourage voluntary separation or early retirement; 

22 (2) a civilian employee of the Department of Defense involuntarily 

23 separated from Federal service or retired under a program offering in24 ducements to encourage early retirement; or 

25 (3) an employee of a prime contractor, subcontractor, or supplier at 

26 any tier of a Department of Defense program whose employment is in27 voluntarily terminated (or voluntarily terminated under a program of28 fering inducements to encourage voluntary separation or early retire29 ment) due to the termination or substantial reduction of a Department 

30 of Defense program. 

31 (b) LOANS.—The Administrator may make a loan on a guaranteed basis 

32 under the general business loan program— 

33 (1) to a small business concern that has been (or can reasonably be 

34 expected to be) detrimentally affected by— 

35 (A) the closure or substantial reduction of a Department of De36 fense installation; or 

37 (B) the termination or substantial reduction of a Department 

38 of Defense program on which the small business concern was a 

39 prime contractor or subcontractor or supplier at any tier; or 

40 (2) to a qualified individual or a veteran seeking to establish (or ac41 quire) and operate a small business concern. 


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1 (c) RESOLUTION OF DOUBT.—Recognizing that greater risk may be asso2 ciated with a loan to a small business concern described in subsection 

3 (b)(1), in making a determination regarding the sound value of the proposed 

4 loan under section 20304, any reasonable doubt concerning the small busi5 ness concern’s proposed business plan for transition to nondefense-related 

6 markets shall be resolved in favor of the loan applicant. 

7 (d) AMOUNTS OF LOANS.—Loans under this section shall be authorized 

8 in such amounts as are provided in advance in appropriation Acts for the 

9 purposes of loans under this section. 

10 (e) JOB CREATION AND COMMUNITY BENEFIT.—In providing assistance 

11 under this section, the Administrator shall develop procedures to ensure, to 

12 the maximum extent practicable, that the assistance is used for projects 

13 that— 

14 (1) have the greatest potential for— 

15 (A) creating new jobs for individuals whose employment is invol16 untarily terminated due to reductions in Federal defense expendi17 tures; or 

18 (B) preventing the loss of jobs by employees of small business 

19 concerns described in subsection (b)(1); and 

20 (2) have substantial potential for stimulating new economic activity 

21 in communities most affected by reductions in Federal defense expendi22 tures. 

23 § 20513. Loans for energy efficient technologies 

24 (a) DEFINITIONS.—In this section: 

25 (1) COST.—The term ‘‘cost’’ has the meaning given the term in sec26 tion 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). 

27 (2) COVERED ENERGY EFFICIENCY LOAN.—The term ‘‘covered en28 ergy efficiency loan’’ means a loan— 

29 (A) made under the general business loan program; and 

30 (B) the proceeds of which are used to— 

31 (i) purchase energy efficient designs, equipment, or fix32 tures; or 

33 (ii) reduce the energy consumption of the borrower by 10 

34 percent or more. 

35 (3) PILOT PROGRAM.—The term ‘‘pilot program’’ means the pilot 

36 program established under subsection (b). 

37 (b) ESTABLISHMENT.—The Administrator shall establish and carry out a 

38 pilot program under which the Administrator shall reduce the fees for cov39 ered energy efficiency loans. 


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1 (c) DURATION.—The pilot program shall terminate at the end of the sec2 ond full fiscal year after the date on which the Administrator establishes 

3 the pilot program. 

4 (d) MAXIMUM PARTICIPATION.—A covered energy efficiency loan shall in5 clude the maximum participation levels by the Administrator permitted for 

6 loans made under this division. 

7 (e) FEES.— 

8 (1) IN GENERAL.—The fee on a covered energy efficiency loan shall 

9 be equal to 50 percent of the fee otherwise applicable to that loan 

10 under 20311 of this title. 

11 (2) WAIVER.—The Administrator may waive paragraph (1) for a fis12 cal year if— 

13 (A) for the fiscal year before that fiscal year, the annual rate 

14 of default of covered energy efficiency loans exceeds that of loans 

15 made under this division that are not covered energy efficiency 

16 loans; 

17 (B) the cost to the Administrator of making loans under this 

18 division— 

19 (i) is greater than zero; and 

20 (ii) is directly attributable to the cost of making covered 

21 energy efficiency loans; and 

22 (C) no additional sources of revenue authority are available to 

23 reduce the cost of making loans under this division to zero. 

24 (3) EFFECT OF WAIVER.—If the Administrator waives the reduction 

25 of fees under paragraph (2), the Administrator— 

26 (A) shall not assess or collect fees in an amount greater than 

27 necessary to ensure that the cost of the program under this divi28 sion is not greater than zero; and 

29 (B) shall reinstate the fee reductions under paragraph (1) when 

30 the conditions in paragraph (2) no longer apply. 

31 (4) NO INCREASE OF FEES.—The Administrator shall not increase 

32 the fees under section 20311 of this title on loans made under this divi33 sion that are not covered energy efficiency loans as a direct result of 

34 the pilot program. 

35 (f) GAO REPORT.— 

36 (1) IN GENERAL.—Not later than one year after the date on which 

37 the pilot program terminates, the Comptroller General shall submit to 

38 the Committee on Small Business of the House of Representatives and 

39 the Committee on Small Business and Entrepreneurship of the Senate 

40 a report on the pilot program. 

41 (2) CONTENTS.—The report under paragraph (1) shall include— 


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1 (A) the number of covered energy efficiency loans for which fees 

2 were reduced under the pilot program; 

3 (B) a description of the energy efficiency savings with the pilot 

4 program; 

5 (C) a description of the impact of the pilot program on the pro6 gram under this division; 

7 (D) an evaluation of the efficacy and potential fraud and abuse 

8 of the pilot program; and 

9 (E) recommendations for improving the pilot program. 

10 CHAPTER 207—SMALL BUSINESS LENDING COMPANIES 

11 AND NON-FEDERALLY REGULATED LENDERS 

Sec. 

20701. Authority to regulate. 

20702. Capital directive. 

20703. Civil action. 

20704. Revocation or suspension of loan authority; cease and desist orders. 

20705. Removal or suspension of management officials. 

20706. Appointment of receiver. 

20707. Taking of possession of assets. 

20708. Reports. 

12 § 20701. Authority to regulate 

13 The Administrator— 

14 (1) may supervise the safety and soundness of small business lending 

15 companies and non-federally regulated lenders; 

16 (2) in accordance with the purposes of this subtitle, may— 

17 (A) regulate small business lending companies; 

18 (B) set capital standards for small business lending companies; 

19 (C) examine small business lending companies; and 

20 (D) enforce laws governing small business lending companies; 

21 and 

22 (3) in accordance with the purposes of this subtitle, may— 

23 (A) regulate non-federally regulated lenders; 

24 (B) examine non-federally regulated lenders; and 

25 (C) enforce laws governing the lending activities of non-federally 

26 regulated lenders under the general business loan program. 

27 § 20702. Capital directive 

28 (a) IN GENERAL.—If the Administrator determines that a small business 

29 lending company is being operated in an imprudent manner, the Adminis30 trator may, in addition to any other action authorized by law, issue a direc31 tive to the small business lending company to increase capital to such level 

32 as the Administrator determines will result in the safe and sound operation 

33 of the small business lending company. 


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1 (b) LIMIT ON DELEGABILITY.—The Administrator may not delegate the 

2 authority granted under subsection (a) except to an Associate Deputy Ad3 ministrator. 

4 (c) REGULATIONS.—The Administrator shall issue regulations outlining 

5 the conditions under which the Administrator may determine the level of 

6 capital under subsection (a). 

7 § 20703. Civil action 

8 If a small business lending company violates this subtitle or subtitle I, 

9 the Administrator may bring a civil action in United States district court 

10 to terminate the rights, privileges, and franchises of the small business lend11 ing company under this subtitle or subtitle I. 

12 § 20704. Revocation or suspension of loan authority; cease 

13 and desist orders 

14 (a) REVOCATION OR SUSPENSION OF LOAN AUTHORITY.— 

15 (1) IN GENERAL.—The Administrator may revoke or suspend the au16 thority of a small business lending company or a non-federally regu17 lated lender to make, service, or liquidate business loans under the gen18 eral business loan program— 

19 (A) for false statements knowingly made in any written submis20 sion required under this subtitle; 

21 (B) for omission of a material fact from any written submission 

22 required under this subtitle; 

23 (C) for willful or repeated violation of this subtitle; 

24 (D) for willful or repeated violation of any condition imposed by 

25 the Administrator with respect to any application, request, or 

26 agreement under this subtitle; or 

27 (E) for violation of any cease and desist order of the Adminis28 trator under this chapter. 

29 (2) LIMITATION ON DELEGABILITY.—The Administrator may dele30 gate power to revoke or suspend authority under paragraph (1) only 

31 to the Deputy Administrator and only if the Administrator is unavail32 able to take the action. 

33 (3) PROCEDURE.— 

34 (A) IN GENERAL.—Except as provided in subparagraph (B), the 

35 Administrator may revoke or suspend authority under paragraph 

36 (1) only after a hearing under subsection (c). 

37 (B) SUSPENSION BEFORE HEARING.— 

38 (i) IN GENERAL.—The Administrator, after finding ex39 traordinary circumstances and in order to protect the finan40 cial or legal position of the United States, may issue a susVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 pension order without conducting a hearing under subsection 

2 (c). 

3 (ii) HEARING.—If the Administrator issues a suspension 

4 under clause (i), the Administrator shall, within 2 business 

5 days after issuance of the suspension, follow the procedure 

6 specified in subsection (c). 

7 (C) ACTION BY THE ADMINISTRATOR AFTER HEARING BY AD8 MINISTRATIVE LAW JUDGE.— 

9 (i) IN GENERAL.—A revocation or suspension under para10 graph (1) shall be made by the Administrator, except that the 

11 Administrator shall delegate to an administrative law judge 

12 appointed under section 3105 of title 5 the authority to con13 duct any hearing required under subsection (c). 

14 (ii) BASIS OF DECISION.—The Administrator shall base the 

15 decision to revoke or suspend on the record of the hearing. 

16 (4) EFFECTIVE PERIOD OF SUSPENSION.—A suspension under para17 graph (1) shall remain in effect until the Administrator makes a deci18 sion under paragraph (3)(C) to permanently revoke the authority of the 

19 small business lending company or non-federally regulated lender, sus20 pend the authority for a time certain, or terminate the suspension. 

21 (5) NOTIFICATION OF BORROWERS.—On revocation of the authority 

22 of a small business lending company or non-federally regulated lender 

23 under paragraph (1), the small business lending company or non-feder24 ally regulated lender shall, and the Administrator may, notify bor25 rowers of the revocation and of the appointment of a new entity to 

26 service the borrowers’ loans. 

27 (b) CEASE AND DESIST ORDERS.— 

28 (1) IN GENERAL.—If a small business lending company, a non-feder29 ally regulated lender, or other person violates this subtitle or subtitle 

30 I or is engaging or is about to engage in any act or practice that con31 stitutes or will constitute a violation of this subtitle or subtitle I, the 

32 Administrator, after an opportunity for hearing under subsection (c), 

33 may order that— 

34 (A) the small business lending company, non-federally regulated 

35 lender, or other person cease and desist from engaging in the act 

36 or practice or in any failure to act; 

37 (B) the small business lending company, non-federally regulated 

38 lender, or other person take such action or to refrain from such 

39 action as the Administrator considers necessary to ensure compli40 ance with this subtitle; or 


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1 (C) the authority of the small business lending company or non2 federally regulated lender to lend be suspended under subsection 

3 (a). 

4 (2) LIMITATION ON DELEGABILITY.—The Administrator may dele5 gate the authority under paragraph (1) only to the Deputy Adminis6 trator and only if the Administrator is unavailable to take the action. 

7 (3) ORDER BEFORE HEARING.— 

8 (A) IN GENERAL.—The Administrator, after finding extraor9 dinary circumstances and in order to protect the financial or legal 

10 position of the United States, may issue a cease and desist order 

11 without conducting a hearing under subsection (c). 

12 (B) HEARING.—If the Administrator issues a cease and desist 

13 order under subparagraph (A), the Administrator shall within 2 

14 business days follow the procedures specified in subsection (c). 

15 (c) PROCEDURE.— 

16 (1) ORDER TO SHOW CAUSE.— 

17 (A) IN GENERAL.—Before revoking or suspending authority 

18 under subsection (a) or issuing a cease and desist order under 

19 subsection (b), the Administrator shall serve an order to show 

20 cause on the small business lending company, non-federally regu21 lated lender, or other person why an order revoking or suspending 

22 the authority or a cease and desist order should not be issued. 

23 (B) CONTENTS.—An order under subparagraph (A) shall— 

24 (i) contain a statement of the matters of fact and law as25 serted by the Administrator and the legal authority and juris26 diction under which a hearing is to be held; and 

27 (ii) state that a hearing will be held before an administra28 tive law judge at a time and place stated in the order. 

29 (2) HEARING.—A hearing shall be conducted under sections 554, 

30 556, and 557 of title 5. 

31 (3) ORDER OF REVOCATION OR SUSPENSION; CEASE AND DESIST

32 ORDER.— 

33 (A) IN GENERAL.—If, after hearing or a waiver of hearing, the 

34 Administrator determines that an order revoking or suspending 

35 the authority or a cease and desist order should be issued, the Ad36 ministrator shall promptly issue the order. 

37 (B) CONTENTS.—An order under subparagraph (A) shall— 

38 (i) include a statement of the findings of the Administrator 

39 and the grounds and reasons for the findings; and 

40 (ii) specify the effective date of the order. 


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1 (C) SERVICE.—The Administrator shall cause an order under 

2 subparagraph (A) to be served on the small business lending com3 pany, non-federally regulated lender, or other person that is sub4 ject to the order. 

5 (4) WITNESSES.—A witness summoned before the Administrator 

6 shall be paid by the party at whose instance the witness is called the 

7 same fees and mileage that are paid witnesses in the courts of the 

8 United States. 

9 (d) FINAL AGENCY ACTION.—An order under subsection (c)(3) is final 

10 agency action for purposes of chapter 7 of title 5. 

11 (e) JUDICIAL REVIEW.—An adversely affected party shall have 20 days 

12 from the date of issuance of an order under subsection (c)(3) to seek judi13 cial review in United States district court. 

14 § 20705. Removal or suspension of management officials 

15 (a) DEFINITION OF MANAGEMENT OFFICIAL.—In this section, the term 

16 ‘‘management official’’ means an officer, director, general partner, manager, 

17 employee, agent, or other participant in the management of the affairs of 

18 a small business lending company’s or non-federally regulated lender’s ac19 tivities under the general business loan program. 

20 (b) REMOVAL OF MANAGEMENT OFFICIAL.— 

21 (1) NOTICE.—The Administrator may serve on a management offi22 cial a written notice of the Administrator’s intention to remove that 

23 management official if, in the opinion of the Administrator, the man24 agement official— 

25 (A) willfully and knowingly commits a substantial violation of— 

26 (i) this subtitle or subtitle I (including any regulation 

27 issued under this subtitle or subtitle I); 

28 (ii) a final cease and desist order under this subtitle; or 

29 (iii) any agreement under this subtitle by— 

30 (I) the management official; or 

31 (II) the small business lending company or non-feder32 ally regulated lender in which the management official is 

33 a participant; or 

34 (B) willfully and knowingly commits a substantial breach of a 

35 fiduciary duty of that participant as a management official, if the 

36 violation or breach of fiduciary duty is one involving personal dis37 honesty on the part of the management official. 

38 (2) CONTENTS.—A notice under paragraph (1) shall— 

39 (A) contain a statement of the facts constituting grounds for 

40 the notice; and 


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1 (B) state a time and place at which a hearing under paragraph 

2 (3) will be held on the notice. 

3 (3) HEARING.— 

4 (A) TIMING.—A hearing under sections 554, 556, and 557 of 

5 title 5 shall be held not earlier than 30 nor later than 60 days 

6 after the date of service of notice of the hearing, unless an earlier 

7 or a later date is set by the Administrator at the request of— 

8 (i) the management official, for good cause; or 

9 (ii) the Attorney General. 

10 (B) CONSENT.—Unless the management official appears at a 

11 hearing under this subsection in person or by an authorized rep12 resentative, the management official shall be deemed to have con13 sented to the issuance of an order of removal under paragraph (1). 

14 (4) ORDER OF REMOVAL.— 

15 (A) IN GENERAL.—In the event of consent under paragraph 

16 (3)(B), or if on the record made at a hearing under this section, 

17 the Administrator finds that any of the grounds specified in the 

18 notice of removal has been established, the Administrator may 

19 issue such orders of removal from office as the Administrator con20 siders appropriate. 

21 (B) EFFECTIVENESS.—An order under subparagraph (A) 

22 shall— 

23 (i) take effect 30 days after the date of service on the sub24 ject small business lending company or non-federally regu25 lated lender and the management official concerned (except in 

26 the case of an order issued on consent as described in para27 graph (3)(B), which shall become effective at the time speci28 fied in the order); and 

29 (ii) remain effective and enforceable, except to such extent 

30 as the order is stayed, modified, terminated, or set aside by 

31 action of the Administrator or a court in accordance with this 

32 chapter. 

33 (c) AUTHORITY TO SUSPEND OR PROHIBIT PARTICIPATION.— 

34 (1) IN GENERAL.—To protect a small business lending company, a 

35 non-federally regulated lender, or the interests of the Administration or 

36 the United States, the Administrator may suspend from office or pro37 hibit from further participation in any manner in the management or 

38 conduct of the affairs of a small business lending company or non-fed39 erally regulated lender a management official by written notice to that 

40 effect served on the management official. 


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1 (2) PROHIBITED ACTIVITIES.—A suspension or prohibition under 

2 paragraph (1) may prohibit the management official from making, 

3 servicing, reviewing, approving, or liquidating any loan under the gen4 eral business loan program. 

5 (3) EFFECTIVENESS.—A suspension or prohibition under paragraph 

6 (1)— 

7 (A) shall take effect on service of notice under subsection (b); 

8 and 

9 (B) unless stayed by a court in proceedings under paragraph 

10 (4), shall remain in effect— 

11 (i) pending the completion of the administrative pro12 ceedings pursuant to a notice of intention to remove served 

13 under subsection (b); and 

14 (ii) until such time as the Administrator dismisses the 

15 charges specified in the notice, or, if an order of removal or 

16 prohibition is issued against the management official, until 

17 the effective date of any such order. 

18 (4) JUDICIAL REVIEW OF SUSPENSION PRIOR TO HEARING.—Not 

19 later than 10 days after a management official is suspended or prohib20 ited from participation under paragraph (1), the management official 

21 may apply to a United States district court for a stay of the suspension 

22 or prohibition pending the completion of the administrative proceedings 

23 pursuant to a notice of intent to remove served on the management of24 ficial under subsection (b). 

25 (d) AUTHORITY TO SUSPEND ON CRIMINAL CHARGES.— 

26 (1) IN GENERAL.—If a management official is charged in an infor27 mation, indictment, or complaint authorized by a United States attor28 ney, with a felony involving dishonesty or breach of trust, the Adminis29 trator may, by written notice served on the management official, sus30 pend the management official from office or prohibit the management 

31 official from further participation in any manner in the management 

32 or conduct of the affairs of the small business lending company or non33 federally regulated lender in which the management official is a partici34 pant described in subsection (a). 

35 (2) EFFECTIVENESS.—A suspension or prohibition under paragraph 

36 (1) shall remain in effect until the information, indictment, or com37 plaint is finally disposed of, or until terminated by the Administrator 

38 or by order of a United States district court. 

39 (3) AUTHORITY ON CONVICTION.— 

40 (A) IN GENERAL.—If a judgment of conviction with respect to 

41 an offense described in paragraph (1) is entered against a manVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00107 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 agement official, at such time as the judgment is not subject to 

2 further judicial review, the Administrator may issue and serve on 

3 the management official an order removing the management offi4 cial, effective on service of a copy of the order on the small busi5 ness lending company or non-federally regulated lender in which 

6 the management official is a participant described in subsection 

7 (a). 

8 (B) JUDGMENT NOT SUBJECT TO FURTHER JUDICIAL RE9 VIEW.—For purposes of subparagraph (A), further judicial review 

10 does not include the possibility of review of a petition for a writ 

11 of habeas corpus. 

12 (4) AUTHORITY ON DISMISSAL OR OTHER DISPOSITION.—A finding 

13 of not guilty or other disposition of charges described in paragraph (1) 

14 shall not preclude the Administrator from instituting proceedings under 

15 section 20704 of this title. 

16 (e) NOTIFICATION TO SMALL BUSINESS LENDING COMPANY OR NON17 FEDERALLY REGULATED LENDER.—A copy of a notice required to be 

18 served on a management official under this chapter shall also be served on 

19 the small business lending company or non-federally regulated lender in 

20 which the management official is a participant described in subsection (a). 

21 (f) DECISION.—After a hearing under this section, and not later than 30 

22 days after the Administrator notifies the parties that the case has been sub23 mitted for final decision, the Administrator shall— 

24 (1) render a decision in the matter (which shall include findings of 

25 fact on which its decision is predicated); and 

26 (2) issue and cause to be served on each party to the proceeding an 

27 order or orders consistent with this chapter. 

28 (g) FINAL AGENCY ACTION.—A decision under subsection (f) shall con29 stitute final agency action for purposes of chapter 7 of title 5. 

30 (h) JUDICIAL REVIEW.—An adversely affected party shall have 20 days 

31 from the date of issuance of the order to seek judicial review in United 

32 States district court. 

33 § 20706. Appointment of receiver 

34 (a) IN GENERAL.—In a civil action under this division, the court may— 

35 (1) take exclusive jurisdiction over a small business lending company 

36 or non-federally regulated lender; and 

37 (2) appoint a receiver to hold and administer the assets of the small 

38 business lending company or non-federally regulated lender. 

39 (b) APPOINTMENT OF ADMINISTRATOR.—On request of the Adminis40 trator, the court may appoint the Administrator as a receiver under sub41 section (a). 


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1 § 20707. Taking of possession of assets 

2 (a) TAKING OF POSSESSION OF LOAN PORTFOLIO.—If a small business 

3 lending company or non-federally regulated lender is not in compliance with 

4 capital requirements or is insolvent, the Administrator may take possession 

5 of the portfolio of loans guaranteed by the Administrator and sell the loans 

6 to a third party by means of a receiver appointed under section 20706 of 

7 this title. 

8 (b) TAKING OF POSSESSION OF SERVICING ACTIVITIES.—If a small busi9 ness lending company or non-federally regulated lender is not in compliance 

10 with capital requirements or is insolvent or otherwise operating in an unsafe 

11 and unsound condition, the Administrator may take possession of servicing 

12 activities of loans that are guaranteed by the Administrator and sell the 

13 servicing rights to a third party by means of a receiver appointed under sec14 tion 20706 of this title. 

15 § 20708. Reports 

16 (a) CIVIL PENALTY FOR FAILURE TO FILE.— 

17 (1) IN GENERAL.—A small business lending company or non-feder18 ally regulated lender that violates a regulation or written directive 

19 issued by the Administrator regarding the filing of a regular or special 

20 report shall pay to the United States a civil penalty of not more than 

21 $5,000 for each day of the continuance of the failure to file the report, 

22 unless it is shown that the violation is due to reasonable cause and not 

23 due to willful neglect. 

24 (2) ENFORCEMENT.—A civil penalty under paragraph (1) may be en25 forced in a civil action brought by the Administrator. 

26 (3) NONAPPLICABILITY TO CERTAIN SMALL BUSINESS LENDING

27 COMPANIES.—Paragraph (1) does not apply to an affiliate of a small 

28 business lending company that procures at least 10 percent of its an29 nual purchasing requirements from small manufacturers. 

30 (b) EXEMPTION.— 

31 (1) IN GENERAL.—If the Administrator determines that granting an 

32 exemption would not be inconsistent with the public interest or the pro33 tection of the Administration, the Administrator may exempt a small 

34 business lending company or non-federally regulated lender from sub35 section (a)— 

36 (A) in whole or in part; and 

37 (B) on such terms and conditions and for such period of time 

38 as the Administrator considers necessary and appropriate. 

39 (2) PROCEDURE.—The Administrator may grant an exemption under 

40 paragraph (1)— 


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1 (A) by regulation prescribed after an opportunity for notice and 

2 comment; or 

3 (B) on application of an interested party, at any time previous 

4 to a violation described in subsection (a), by order, after notice 

5 and opportunity for hearing under sections 554, 556, and 557 of 

6 title 5. 

7 (c) ALTERNATIVE REQUIREMENTS.—The Administrator may for purposes 

8 of this section make any alternative requirement that the Administrator 

9 considers to be appropriate to a situation. 

10 DIVISION C—MICROLOAN PROGRAM 

11 CHAPTER 211—MICROLOAN PROGRAM 

Sec. 

21101. Definitions. 

21102. Establishment of microloan program. 

21103. Purposes of microloan program. 

21104. Eligibility for participation. 

21105. Loans to intermediaries; loans by intermediaries to small business concerns. 

21106. Marketing, management, and technical assistance grants to intermediaries. 

21107. Private sector borrowing technical assistance grants. 

21108. Grants for management, marketing, technical assistance, and related services. 

12 § 21101. Definitions 

13 In this chapter: 

14 (1) INTERMEDIARY.—The term ‘‘intermediary’’ means— 

15 (A) a private, nonprofit entity; 

16 (B) a private, nonprofit community development corporation; 

17 (C) a consortium of private, nonprofit organizations or nonprofit 

18 community development corporations; 

19 (D) a quasi-governmental economic development entity (such as 

20 a planning and development district), other than a State, county, 

21 or municipal government (or any agency of a State, county, or 

22 municipal government), in a geographic area— 

23 (i) in which no application is received from an eligible non24 profit organization; or 

25 (ii) with respect to which the Administrator determines 

26 that the needs of the geographic area are not adequately 

27 served by an existing, eligible nonprofit organization that has 

28 submitted an application; or 

29 (E) an agency of or nonprofit entity established by a Native 

30 American Tribal Government; 

31 that seeks to borrow or has borrowed funds from the Administrator to 

32 make microloans to small business concerns under the microloan pro33 gram. 


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1 (2) MICROLOAN.—The term ‘‘microloan’’ means a short-term, fixed 

2 rate loan of not more than $35,000, made by an intermediary to a 

3 startup, newly established, or growing small business concern. 

4 (3) RURAL AREA.—The term ‘‘rural area’’ means a political subdivi5 sion or unincorporated area— 

6 (A) in a nonmetropolitan county (as defined by the Secretary 

7 of Agriculture) or its equivalent; or 

8 (B) in a metropolitan county or its equivalent that has a resi9 dent population of less than 20,000 if the Administrator deter10 mines the political subdivision or unincorporated area to be rural. 

11 (4) STATE.—The term ‘‘State’’ includes the District of Columbia, 

12 Puerto Rico, the United States Virgin Islands, Guam, and American 

13 Samoa. 

14 § 21102. Establishment of microloan program 

15 There is established within the Administration a microloan program. 

16 § 21103. Purposes of microloan program 

17 The purposes of the microloan program are— 

18 (1) to assist women, low-income, veteran, and minority entrepreneurs 

19 and business owners and other such individuals possessing the capa20 bility to operate successful business concerns; 

21 (2) to assist small business concerns in areas suffering from a lack 

22 of credit due to economic downturns; 

23 (3) to make loans to eligible intermediaries to enable the inter24 mediaries to provide small-scale loans, particularly loans in amounts 

25 averaging not more than $10,000, to startup, newly established, or 

26 growing small business concerns for working capital or the acquisition 

27 of materials, supplies, or equipment; 

28 (4) to make grants to eligible intermediaries that, together with non29 Federal matching funds, will enable the intermediaries to provide inten30 sive marketing, management, and technical assistance to microloan bor31 rowers; 

32 (5) to make grants to eligible nonprofit entities that, together with 

33 non-Federal matching funds, will enable the entities to provide inten34 sive marketing, management, and technical assistance to assist low-in35 come entrepreneurs and other low-income individuals obtain private 

36 sector financing for their businesses, with or without loan guarantees; 

37 (6) to report to the Committee on Small Business and Entrepreneur38 ship of the Senate and the Committee on Small Business of the House 

39 of Representatives on the effectiveness of the microloan program and 

40 the advisability and feasibility of implementing such a program nation41 wide; and 


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1 (7) to establish a welfare-to-work microloan initiative to test the fea2 sibility of supplementing the technical assistance grants provided under 

3 sections 21106 and 21107 of this title to individuals who are receiving 

4 assistance under the State program funded under part A of title IV 

5 of the Social Security Act (42 U.S.C. 601 et seq.), or under any com6 parable State-funded means-tested program of assistance for low-in7 come individuals, to adequately assist those individuals in— 

8 (A) establishing small business concerns; and 

9 (B) eliminating their dependence on that assistance. 

10 § 21104. Eligibility for participation 

11 An intermediary shall be eligible to receive loans and grants under sec12 tions 21105 and 21106 of this title if the intermediary has at least one year 

13 of experience making microloans to startup, newly established, or growing 

14 small business concerns and providing, as an integral part of the microloan 

15 program, intensive marketing, management, and technical assistance to its 

16 borrowers. 

17 § 21105. Loans to intermediaries; loans by intermediaries to 

18 small business concerns 

19 (a) IN GENERAL.—Under the microloan program, the Administrator may 

20 make direct loans to eligible intermediaries for the purpose of making 

21 microloans to small business concerns under this section. 

22 (b) LOAN APPLICATIONS.— 

23 (1) IN GENERAL.—As part of an application for a loan, an inter24 mediary shall submit to the Administrator a description of— 

25 (A) the type of businesses to be assisted; 

26 (B) the size and range of loans to be made; 

27 (C) the geographic area to be served, including a description of 

28 the economic, poverty, and unemployment characteristics of the 

29 area; 

30 (D) the status of small business concerns in the area to be 

31 served, including an analysis of their credit and technical assist32 ance needs; 

33 (E) any marketing, management, and technical assistance to be 

34 provided in connection with a loan made under this chapter; 

35 (F) the local economic credit markets, including the costs asso36 ciated with obtaining credit locally; 

37 (G) the qualifications of the applicant to carry out the purposes 

38 of the microloan program; and 

39 (H) any plan to involve other technical assistance providers 

40 (such as counselors from SCORE or small business development 


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1 centers) or private sector lenders in assisting selected business 

2 concerns. 

3 (2) SELECTION OF INTERMEDIARIES.—In selecting intermediaries to 

4 participate in the microloan program, the Administrator shall give pri5 ority to applicants that provide loans in amounts averaging not more 

6 than $10,000. 

7 (c) INTERMEDIARY CONTRIBUTION.—As a condition of a loan under sub8 section (a), the Administrator shall require an intermediary to contribute 

9 not less than 15 percent of the loan amount in cash from a non-Federal 

10 source. 

11 (d) LOAN LIMITS.—A loan shall not be made under the microloan pro12 gram if the total amount outstanding and committed (on a deferred basis, 

13 through a participation on an immediate basis, or directly) to one inter14 mediary (excluding outstanding grants) under the general business loan pro15 gram and microloan program would, as a result of the loan, exceed 

16 $750,000 in the first year of the intermediary’s participation in the 

17 microloan program or $3,500,000 in any subsequent year of the 

18 intermediary’s participation in the microloan program. 

19 (e) LOAN TERM.—A loan made by the Administrator under this chapter 

20 shall be for a term of 10 years. 

21 (f) DELAYED PAYMENTS.—Except for a loan loss reserve fund under sub22 section (i), the Administrator shall not require repayment of principal or in23 terest on a loan made to an intermediary under this chapter during the first 

24 year of the loan. 

25 (g) NO FEE OR COLLATERAL.—Except for a loan loss reserve fund under 

26 subsection (i), the Administrator shall not charge any fee or require collat27 eral other than an assignment of the notes receivable of the microloans with 

28 respect to any loan made to an intermediary under the microloan program. 

29 (h) INTEREST RATES.— 

30 (1) IN GENERAL.—Except as provided in paragraph (2), a loan made 

31 by the Administrator to an intermediary under this chapter shall bear 

32 an interest rate equal to 1.25 percentage points below the rate deter33 mined by the Secretary of the Treasury for obligations of the United 

34 States with a period of maturity of 5 years, adjusted to the nearest 

35 0.125 percent. 

36 (2) RATES APPLICABLE TO CERTAIN SMALL LOANS.—A loan made 

37 by the Administrator to an intermediary that makes loans to small 

38 business concerns and entrepreneurs averaging not more than $7,500 

39 shall bear an interest rate that is 2 percentage points below the rate 

40 determined by the Secretary of the Treasury for obligations of the 


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1 United States with a period of maturity of 5 years, adjusted to the 

2 nearest 0.125 percent. 

3 (3) MULTIPLE SITES OR OFFICES.—The interest rate determined 

4 under paragraph (1) or (2) shall apply to each separate loanmaking 

5 site or office of an intermediary only if the site or office meets the re6 quirements of that paragraph. 

7 (4) RATE BASIS.—The applicable rate of interest under this sub8 section— 

9 (A) for the first year of an intermediary’s participation in the 

10 microloan program, shall be applied retroactively based on the ac11 tual lending practices of the intermediary as determined by the 

12 Administrator before the end of that year; and 

13 (B) for each subsequent year of an intermediary’s participation 

14 in the microloan program, shall be based on the actual lending 

15 practices of the intermediary during the term of the intermediary’s 

16 participation in the microloan program. 

17 (i) LOSS RESERVE OF INTERMEDIARIES.— 

18 (1) IN GENERAL.—The Administrator shall by regulation require an 

19 intermediary to establish and maintain a loan loss reserve fund until 

20 all obligations owed to the Administrator under the microloan program 

21 are repaid. 

22 (2) LEVEL OF LOAN LOSS RESERVE FUND.— 

23 (A) IN GENERAL.—Subject to subparagraph (C), the Adminis24 trator shall require the loan loss reserve fund of an intermediary 

25 to be maintained at a level equal to 15 percent of the outstanding 

26 balance of the notes receivable owed to the intermediary. 

27 (B) REVIEW OF LOAN LOSS RESERVE.—

28 (i) IN GENERAL.—After the initial 5 years of an 

29 intermediary’s participation in the microloan program, the 

30 Administrator shall, at the request of the intermediary, con31 duct a review of the annual loss rate of the intermediary. 

32 (ii) REVIEW PERIOD.—An intermediary that requests a re33 duction in its loan loss reserve shall be reviewed based on the 

34 most recent 5-year period preceding the request. 

35 (C) REDUCTION OF LOAN LOSS RESERVE.—Subject to subpara36 graph (D), the Administrator may reduce the annual loan loss re37 serve requirement of an intermediary to reflect the actual average 

38 loan loss rate for the intermediary during the preceding 5-year pe39 riod, except that in no case shall the loan loss reserve be reduced 

40 to less than 10 percent of the outstanding balance of the notes 

41 receivable owed to the intermediary. 


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1 (D) REQUIREMENTS.—The Administrator may reduce the an2 nual loan loss reserve requirement of an intermediary only if the 

3 intermediary demonstrates to the satisfaction of the Administrator 

4 that— 

5 (i) the average annual loss rate for the intermediary during 

6 the preceding 5-year period is less than 15 percent; and 

7 (ii) no other factors exist that may impair the ability of the 

8 intermediary to repay all obligations owed to the Adminis9 trator under this chapter. 

10 (j) LOANS BY INTERMEDIARIES TO SMALL BUSINESS CONCERNS.— 

11 (1) IN GENERAL.—From funds made available to an intermediary 

12 under the microloan program, the intermediary shall make short-term, 

13 fixed rate loans to startup, newly established, and growing small busi14 ness concerns for working capital and the acquisition of materials, sup15 plies, furniture, fixtures, and equipment. 

16 (2) LOAN AMOUNT.— 

17 (A) PORTFOLIO REQUIREMENT.—To the extent practicable, an 

18 intermediary that operates under the microloan program shall 

19 maintain a microloan portfolio with an average loan size of not 

20 more than $15,000. 

21 (B) UNAVAILABILITY OF COMPARABLE CREDIT.—An inter22 mediary may make a loan under the microloan program of more 

23 than $20,000 to a small business concern only if the small busi24 ness concern demonstrates that— 

25 (i) it is unable to obtain credit elsewhere at comparable in26 terest rates; and 

27 (ii) it has good prospects for success. 

28 (C) MAXIMUM AMOUNT.—An intermediary shall not— 

29 (i) make a loan under this chapter of more than $35,000; 

30 or 

31 (ii) have outstanding or committed to any one borrower 

32 more than $35,000. 

33 (3) INTEREST LIMIT.—Notwithstanding any provision of law of any 

34 State (including the constitution of a State) pertaining to the rate or 

35 amount of interest that may be charged, taken, received, or reserved 

36 on a loan, the maximum rate of interest to be charged on a microloan 

37 funded under this chapter shall not exceed the rate of interest applica38 ble to a loan made to an intermediary by the Administrator— 

39 (A) in the case of a loan of more than $7,500 made by the 

40 intermediary to a small business concern or entrepreneur, by more 

41 than 7.75 percentage points; and 


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1 (B) in the case of a loan of not more than $7,500 made by the 

2 intermediary to a small business concern or entrepreneur by more 

3 than 8.5 percentage points. 

4 (4) REVIEW RESTRICTION.—The Administrator shall not review indi5 vidual microloans made by intermediaries prior to approval. 

6 (5) ESTABLISHMENT OF CHILD CARE OR TRANSPORTATION BUSI7 NESSES.—In addition to other eligible small business concerns, a bor8 rower under the microloan program may include an individual who will 

9 use the loan proceeds to establish— 

10 (A) a for-profit or nonprofit child care establishment; or 

11 (B) a business providing a for-profit transportation service. 

12 (k) PROGRAM FUNDING FOR MICROLOANS.— 

13 (1) NUMBER OF PARTICIPANTS.—Under the microloan program, the 

14 Administrator may fund, on a competitive basis, not more than 300 

15 intermediaries. 

16 (2) ALLOCATION.— 

17 (A) MINIMUM ALLOCATION.—Subject to the availability of ap18 propriations, of the total amount of new loan funds made available 

19 for award under the microloan program for each fiscal year, the 

20 Administrator shall make available for award in each State an 

21 amount equal to the sum of— 

22 (i) the lesser of— 

23 (I) $800,000; or 

(II) 1 24 ⁄55 of the total amount of new loan funds made 

25 available for award under the microloan program for 

26 that fiscal year; and 

27 (ii) any additional amount, as determined by the Adminis28 trator. 

29 (B) REDISTRIBUTION.—If, at the beginning of the third quarter 

30 of a fiscal year, the Administrator determines that any portion of 

31 the amount made available to carry out the microloan program is 

32 unlikely to be made available under subparagraph (A) during that 

33 fiscal year, the Administrator may make that portion available for 

34 award in any one or more States without regard to subparagraph 

35 (A). 

36 (l) EQUITABLE DISTRIBUTION OF INTERMEDIARIES.—In approving 

37 microloan program applicants and providing funding to intermediaries 

38 under the microloan program, the Administrator shall select and provide 

39 funding to such intermediaries as will ensure appropriate availability of 

40 loans for small business concerns in all industries located throughout each 


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1 State, particularly industries located in urban areas and industries located 

2 in rural areas. 

3 § 21106. Marketing, management, and technical assistance 

4 grants to intermediaries 

5 (a) IN GENERAL.—In conjunction with a loan to an intermediary under 

6 section 21105 of this title, the Administrator may make a grant to the eligi7 ble intermediary for the purpose of providing intensive marketing, manage8 ment, and technical assistance to small business concerns that are borrowers 

9 under the microloan program. 

10 (b) GRANT AMOUNT.— 

11 (1) IN GENERAL.—An intermediary that receives a loan under sec12 tion 21105 of this title shall be eligible to receive a grant in an amount 

13 equal to not more than 25 percent of the total outstanding balance of 

14 loans made to the intermediary under the microloan program. 

15 (2) INTERMEDIARY CONTRIBUTION.— 

16 (A) IN GENERAL.—As a condition of a grant under paragraph 

17 (1), the Administrator shall require the intermediary to contribute 

18 an amount equal to 25 percent of the amount of the grant, ob19 tained solely from a non-Federal source. 

20 (B) FORM.—In addition to cash or other direct funding, a con21 tribution under subparagraph (A) may include indirect costs or in22 kind contributions paid for under a non-Federal program. 

23 (c) ADDITIONAL TECHNICAL ASSISTANCE GRANTS FOR MAKING CERTAIN

24 LOANS.— 

25 (1) IN GENERAL.—An intermediary that has a portfolio of loans 

26 under the microloan program that averages not more than $10,000 

27 during the period of the intermediary’s participation in the microloan 

28 program shall be eligible to receive a grant equal to 5 percent of the 

29 total outstanding balance of loans made to the intermediary under the 

30 microloan program, in addition to any grant made under subsection 

31 (b). 

32 (2) USE.—A grant under paragraph (1) shall be used to provide 

33 marketing, management, and technical assistance to small business 

34 concerns that are borrowers under the microloan program. 

35 (d) MULTIPLE SITES OR OFFICES.—Eligibility for a grant under sub36 section (b) or (c) shall be determined separately for each loanmaking site 

37 or office of an intermediary. 

38 (e) ASSISTANCE TO CERTAIN SMALL BUSINESS CONCERNS.— 

39 (1) IN GENERAL.—An intermediary may expend an amount not to 

40 exceed 25 percent of the funds received under subsection (a) to provide 


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1 information and technical assistance to small business concerns that 

2 are prospective borrowers under section 21108 of this title. 

3 (2) TECHNICAL ASSISTANCE.—An intermediary may provide tech4 nical assistance under paragraph (1) through a third party contract. 

5 § 21107. Private sector borrowing technical assistance 

6 grants 

7 (a) IN GENERAL.—The Administrator may make grants to nonprofit enti8 ties for the purpose of providing marketing, management, and technical as9 sistance to low-income individuals seeking to start or enlarge their own busi10 nesses, if the assistance includes working with the grant recipient to secure 

11 loans in amounts not to exceed $35,000 from private sector lending institu12 tions, with or without a loan guarantee from the nonprofit entity. 

13 (b) GRANT AMOUNTS.—The Administrator may make not more than 55 

14 grants annually under subsection (a), each in an amount not to exceed 

15 $200,000. 

16 (c) GRANT RECIPIENT CONTRIBUTION.— 

17 (1) IN GENERAL.—As a condition of a grant under subsection (a), 

18 the Administrator shall require the grant recipient to contribute an 

19 amount equal to 20 percent of the amount of the grant, obtained solely 

20 from a non-Federal source. 

21 (2) FORM.—In addition to cash or other direct funding, a contribu22 tion under paragraph (1) may include indirect costs or in-kind con23 tributions paid for under a non-Federal program. 

24 § 21108. Grants for management, marketing, technical as25 sistance, and related services 

26 (a) IN GENERAL.—The Administrator may procure technical assistance 

27 for intermediaries participating in the microloan program to ensure that the 

28 intermediaries have the knowledge, skills, and understanding of micro29 lending practices necessary to operate a successful microloan program. 

30 (b) ASSISTANCE AMOUNT.—The Administrator shall transfer 7 percent of 

31 the annual appropriation for loans and loan guarantees under this chapter 

32 to the Administration’s Salaries and Expense Account for the specific pur33 pose of providing one or more technical assistance grants to experienced 

34 microlending organizations and national and regional nonprofit organiza35 tions that have demonstrated experience in providing training support for 

36 microenterprise development and financing to achieve the purpose specified 

37 in subsection (a). 

38 (c) WELFARE-TO-WORK MICROLOAN INITIATIVE.—Of amounts made 

39 available to carry out the welfare-to-work microloan initiative under section 

40 21103(7) of this title for any fiscal year, the Administrator may use not 

41 more than 5 percent to provide technical assistance, either directly or 


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1 through contractors, to welfare-to-work microloan initiative grantees, to en2 sure that the grantees have the knowledge, skills, and understanding of 

3 microlending and welfare-to-work transition, and other related issues, to op4 erate a successful welfare-to-work microloan initiative. 

5 DIVISION D—DISASTER ASSISTANCE 

6 PROGRAMS 

7 CHAPTER 213—DISASTER LOAN PROGRAM 

Sec. 

21301. Physical loss disaster loans. 

21302. Economic injury disaster loans. 

21303. Loans to assist small business concerns that suffer injury as a result of an essential 

employee’s being ordered to active military duty. 

21304. Public awareness of disaster declaration and application periods. 

21305. Disaster loan processing. 

21306. Disaster assistance employees. 

21307. Maximum loan amount. 

21308. Declaration of eligility for additional disaster assistance. 

21309. Interest rates. 

21310. Maximum term. 

21311. Deferment of repayment. 

21312. Suspension of payments. 

21313. Participation in loans on deferred basis. 

21314. Assistance and counseling for disaster victims. 

21315. Priority in allocating funds. 

21316. Prohibition of cancellation of certain disaster loans. 

21317. Prohibition of net earnings clauses. 

21318. Biennial disaster simulation exercise. 

21319. Disaster planning responsibilities. 

21320. Disaster response plan. 

21321. Coordination of disaster assistance programs with FEMA. 

21322. Plans to secure sufficient office space. 

21323. Bond guarantees in procurements relating to a major disaster. 

21324. Civil penalty. 

8 § 21301. Physical loss disaster loans 

9 (a) IN GENERAL.—Except as to agricultural enterprises, to the extent 

10 and in such amounts as are provided in advance in appropriation Acts, the 

11 Administrator may make such a loan (directly or in cooperation with a bank 

12 or other lending institution through an agreement to participate on an im13 mediate or deferred (guaranteed) basis) as the Administrator determines to 

14 be necessary or appropriate to repair, rehabilitate, or replace property, real 

15 or personal, damaged or destroyed by or as a result of a natural or other 

16 disaster. 

17 (b) LOAN AMOUNT.— 

18 (1) IN GENERAL.—The amount of a loan under subsection (a) shall 

19 be equal to 100 percent of the amount of the loss, minus any amount 

20 compensated for by insurance or otherwise. 

21 (2) PROTECTION FROM FUTURE DISASTERS.—The Administrator 

22 may increase the amount of a loan under subsection (a) by up to 20 

23 percent of the aggregate costs of the damage or destruction (whether 

24 or not compensated for by insurance or otherwise) if the Administrator 

25 determines the increase to be necessary or appropriate to protect the 


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1 damaged or destroyed property from future disasters by taking miti2 gating measures, including construction of retaining walls and sea 

3 walls, grading and contouring land, relocating utilities, and modifying 

4 structures. 

5 (3) LIMITATION ON LOAN AMOUNT.— 

6 (A) IN GENERAL.—No loan under this section shall be made if 

7 the total amount outstanding and committed to the borrower 

8 under the disaster loan program would exceed $1,500,000 for any 

9 one disaster unless an applicant constitutes a major source of em10 ployment in an area suffering a disaster, in which case the Admin11 istrator may waive the $1,500,000 limitation. 

12 (B) MAJOR SOURCE OF EMPLOYMENT.—For purposes of deter13 mining whether a nonprofit applicant that owns a premises con14 stitutes a major source of employment under subparagraph (A), 

15 the employees of 2 or more concerns that share the premises as 

16 a common business premises shall be aggregated. 

17 (4) LIMITATION ON REDUCTION OF LOAN AMOUNT.— 

18 (A) IN GENERAL.—The Administrator shall not reduce the 

19 amount of a loan— 

20 (i) for any homeowner on account of loss of real estate to 

21 less than $100,000 for any one disaster; or 

22 (ii) for any homeowner or lessee on account of loss of per23 sonal property to less than $20,000 for any one disaster. 

24 (B) REFINANCING.—The $100,000 and $20,000 amounts in 

25 subparagraph (A) are in addition to any refinancing for which a 

26 loan applicant is eligible. 

27 (c) REFINANCINGS.— 

28 (1) IN GENERAL.—A loan or guarantee may be made to refinance 

29 a mortgage or other lien against a totally destroyed or substantially 

30 damaged home or business concern (other than an agricultural enter31 prise). 

32 (2) REQUIREMENTS.—A loan or guarantee under paragraph (1) shall 

33 not be made unless the Administrator determines that— 

34 (A) the applicant is not able to obtain credit elsewhere; and 

35 (B) the property is to be repaired, rehabilitated, or replaced. 

36 (3) AMOUNT.—The amount refinanced under paragraph (1)— 

37 (A) shall not exceed the amount of physical loss sustained; and 

38 (B) shall be reduced to the extent that the mortgage or lien is 

39 satisfied by insurance or otherwise. 

40 (d) COLLATERAL.—The Administrator shall not require collateral for a 

41 loan of $14,000 (or such greater amount as the Administrator determines 


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1 to be appropriate in the event of a major disaster) or less that is made 

2 under this section. 

3 § 21302. Economic injury disaster loans 

4 (a) DEFINITIONS.—In this section: 

5 (1) DISASTER.—The term ‘‘disaster’’ includes— 

6 (A) a drought; 

7 (B) a below average water level in one or more of the Great 

8 Lakes or on any other body of water in the United States that 

9 supports commerce by small business concerns; and 

10 (C) an ice storm or blizzard. 

11 (2) DISASTER AREA.—The term ‘‘disaster area’’ includes— 

12 (A) a county determined to be a disaster by the President, the 

13 Secretary of Agriculture, or the Administrator; and 

14 (B) a county contiguous to a county described in subparagraph 

15 (A). 

16 (b) LOANS.—Except as to agricultural enterprises, to the extent and in 

17 such amounts as are provided in advance in appropriation Acts, the Admin18 istrator may make such a loan (directly or in cooperation with a bank or 

19 other lending institution through an agreement to participate on an imme20 diate or deferred (guaranteed) basis) as the Administrator determines to be 

21 necessary or appropriate to a small business concern, private nonprofit orga22 nization, or small agricultural cooperative located in a disaster area if— 

23 (1) the Administrator determines that the small business concern, 

24 private nonprofit organization, or agricultural cooperative has suffered 

25 a substantial economic injury as a result of the disaster; 

26 (2)(A) the disaster constitutes— 

27 (i) a major disaster; 

28 (ii) a natural disaster, as determined by the Secretary of Agri29 culture under section 321 of the Consolidated Farm and Rural 

30 Development Act (7 U.S.C. 1961), in which case, assistance under 

31 this section may be provided to farm-related and nonfarm-related 

32 small business concerns, subject to the other applicable require33 ments of this section; or 

34 (iii) a disaster, as determined by the Administrator; or 

35 (B) if no disaster described in subparagraph (A) is declared, the 

36 Governor of a State in which a disaster has occurred certifies to the 

37 Administrator that small business concerns, private nonprofits organi38 zations, or small agricultural cooperatives— 

39 (i) have suffered economic injury as a result of the disaster; and 

40 (ii) are in need of financial assistance that is not available on 

41 reasonable terms in the disaster area; and 


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1 (3) the Administrator determines that the applicant is not able to 

2 obtain credit elsewhere. 

3 (c) PROMPT RESPONSE TO CERTIFICATION.—Not later than 30 days 

4 after the date of receipt of a certification by a Governor of a State under 

5 subsection (b)(2)(B), the Administrator shall respond in writing to the Gov6 ernor on the Administrator’s determination regarding the certification, stat7 ing the reasons for the determination. 

8 (d) LIMITATION ON LOAN AMOUNT.— 

9 (1) IN GENERAL.—No loan under this section shall be made if the 

10 total amount outstanding and committed to a borrower under the dis11 aster loan program would exceed $1,500,000 for any one disaster un12 less the borrower constitutes a major source of employment in a dis13 aster area, in which case the Administrator may waive the $1,500,000 

14 limitation. 

15 (2) MAJOR SOURCE OF EMPLOYMENT.—For purposes of determining 

16 whether a nonprofit applicant that owns a premises constitutes a major 

17 source of employment under paragraph (1), the employees of 2 or more 

18 concerns that share the premises as a common business premises shall 

19 be aggregated. 

20 (e) NURSERIES.—The Administrator shall not withhold disaster assist21 ance under this section to a nursery that is a victim of a drought disaster. 

22 § 21303. Loans to assist small business concerns that suffer 

23 injury as a result of an essential employee’s being 

24 ordered to active military duty 

25 (a) DEFINITIONS.—In this section: 

26 (1) ESSENTIAL EMPLOYEE.—The term ‘‘essential employee’’ means 

27 an individual who is employed by a small business concern and whose 

28 managerial or technical expertise is critical to the successful day-to-day 

29 operations of the small business concern. 

30 (2) PERIOD OF MILITARY CONFLICT.—The term ‘‘period of military 

31 conflict’’ has the meaning given the term in section 20104(a) of this 

32 title. 

33 (3) RESERVIST EXPECTING ACTIVATION.—The term ‘‘reservist ex34 pecting activation’’ means a reservist who— 

35 (A) has not been ordered to active duty; 

36 (B) expects to be ordered to active duty during a period of mili37 tary conflict; and 

38 (C) is a key employee of a small business concern that can rea39 sonably demonstrate that the small business concern will suffer 

40 economic injury in the absence of the reservist. 


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1 (4) SUBSTANTIAL ECONOMIC INJURY.—The term ‘‘substantial eco2 nomic injury’’ means an economic harm to a small business concern 

3 that results in the inability of the small business concern to— 

4 (A) meet its obligations as they mature; 

5 (B) pay its ordinary and necessary operating expenses; or 

6 (C) market, produce, or provide a product or service ordinarily 

7 marketed, produced, or provided by the small business concern. 

8 (b) IN GENERAL.—Except as to agricultural enterprises, to the extent 

9 and in such amounts as are provided in advance in appropriation Acts, the 

10 Administrator may make a loan (directly or in cooperation with a bank or 

11 other lending institution through an agreement to participate on an imme12 diate or deferred basis) to assist a small business concern that has suffered 

13 or that is likely to suffer substantial economic injury as the result of an 

14 essential employee of the small business concern’s being ordered to active 

15 military duty during a period of military conflict. 

16 (c) ELIGIBILITY PERIOD.— 

17 (1) IN GENERAL.—A small business concern shall be eligible for as18 sistance under this section during the period beginning on the date on 

19 which an essential employee is ordered to active duty and ending on 

20 the date that is one year after the date on which the essential employee 

21 is discharged or released from active duty. 

22 (2) EXTENSION.—The Administrator may, when appropriate (as de23 termined by the Administrator), extend the ending date specified in 

24 paragraph (1) by not more than one year. 

25 (d) INTEREST RATE.—A loan or guarantee made under this section shall 

26 be made at the same interest rate as in the case of an economic injury loan 

27 under section 21302 of this title. 

28 (e) LOAN AMOUNT.— 

29 (1) IN GENERAL.—Except as provided in paragraph (2), no loan may 

30 be made under this section if the total amount outstanding and com31 mitted to the borrower under the disaster loan program would exceed 

32 $1,500,000. 

33 (2) MAJOR SOURCE OF EMPLOYMENT.—If the Administrator deter34 mines that the applicant constitutes a major source of employment in 

35 its surrounding area (including a borrower that was not a major source 

36 of employment before the disaster but became a major source of em37 ployment after the disaster), as determined by the Administrator, the 

38 Administrator may waive the $1,500,000 limitation under paragraph 

39 (1). 

40 (f) PRECONSIDERATION PROCESS.—The Administrator shall establish a 

41 preconsideration process under which the Administrator— 


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1 (1) may collect all relevant materials necessary for processing a loan 

2 to a small business concern under this section before a reservist expect3 ing activation who is employed by the small business concern is acti4 vated; and 

5 (2) shall distribute funds for any loan approved under paragraph (1) 

6 if the reservist expecting activation is activated. 

7 (g) OUTREACH AND TECHNICAL ASSISTANCE PROGRAM.— 

8 (1) IN GENERAL.—The Administrator, in consultation with the Sec9 retary of Veterans Affairs and the Secretary of Defense, may develop 

10 a comprehensive outreach and technical assistance program (referred to 

11 in this subsection as the ‘‘program’’) to— 

12 (A) market the loans available under this section to reservists 

13 and family members of reservists (including both reservists that 

14 are on active duty and reservists that are not on active duty); and 

15 (B) provide technical assistance to a small business concern ap16 plying for a loan under this section. 

17 (2) COMPONENTS.—The program shall— 

18 (A) incorporate appropriate websites maintained by the Admin19 istration, the Department of Veterans Affairs, and the Depart20 ment of Defense; and 

21 (B) require that information on the program be made available 

22 to small business concerns directly through— 

23 (i) the district offices and resource partners of the Admin24 istration, including small business development centers, wom25 en’s business centers, and the SCORE; and 

26 (ii) the Department of Veterans Affairs, the Department of 

27 Defense, and other Federal agencies. 

28 (3) REPORT.— 

29 (A) IN GENERAL.—The Administrator shall submit to Congress 

30 a biannnual report on the status of the program. 

31 (B) CONTENTS.—A report under subparagraph (A) shall in32 clude— 

33 (i) for the 6-month period ending on the date of the re34 port— 

35 (I) the number of loans approved under this section; 

36 (II) the number of loans disbursed under this section; 

37 and 

38 (III) the total amount disbursed under this section; 

39 and 


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1 (ii) recommendations, if any, to make the program more ef2 fective in serving small business concerns that employ reserv3 ists. 

4 (C) REPEAL.—This paagraph is repealed effective February 14, 

5 2011. 

6 (h) NONCOLLATERALIZED LOANS.— 

7 (1) IN GENERAL.—Notwithstanding any other provision of law, the 

8 Administrator may make a loan under this section of not more than 

9 $50,000 without collateral. 

10 (2) DEFERRAL OF PAYMENT.—The Administrator may defer pay11 ment of principal and interest on a loan described in paragraph (1) 

12 during the longer of— 

13 (A) the one-year period beginning on the date of the initial dis14 bursement of the loan; or 

15 (B) the period during which the essential employee is on active 

16 duty. 

17 (i) PRIORITY.—The Administrator shall— 

18 (1) give priority to any application for a loan under this section; and 

19 (2) process and make a determination regarding applications under 

20 this section prior to processing or making a determination on other 

21 loan applications under the disaster loan program, on a rolling basis. 

22 § 21304. Public awareness of disaster declaration and appli23 cation periods 

24 (a) COORDINATION WITH FEMA.— 

25 (1) IN GENERAL.—Notwithstanding any other provision of law, for 

26 any disaster declared under this chapter or major disaster (including 

27 any major disaster relating to which the Administrator declares eligi28 bility for additional disaster assistance under section 21308 of this 

29 title), the Administrator, in consultation with the Administrator of the 

30 Federal Emergency Management Agency, shall ensure, to the max31 imum extent practicable, that all application periods for disaster relief 

32 under this subtitle correspond with application deadlines established 

33 under the Robert T. Stafford Disaster Relief and Emergency Assist34 ance Act (42 U.S.C. 5121 et seq.), or as extended by the President. 

35 (2) DEADLINES.—Notwithstanding any other provision of law, not 

36 later than 10 days before the closing date of an application period for 

37 a major disaster (including any major disaster relating to which the 

38 Administrator declares eligibility for additional disaster assistance 

39 under section 21308 of this title), the Administrator, in consultation 

40 with the Administrator of the Federal Emergency Management Agency, 

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1 ship of the Senate and the Committee on Small Business of the House 

2 of Representatives a report that includes— 

3 (A) the deadline for submitting applications for assistance under 

4 this subtitle relating to the major disaster; 

5 (B) information regarding the number of loan applications and 

6 disbursements processed by the Administrator relating to the 

7 major disaster for each day during the period beginning on the 

8 date on which the major disaster was declared and ending on the 

9 date of the report; and 

10 (C) an estimate of the number of potential applicants that have 

11 not submitted an application relating to the major disaster. 

12 (b) PUBLIC AWARENESS OF DISASTERS.—If a disaster is declared under 

13 this chapter or the Administrator declares eligibility for additional disaster 

14 assistance under section 21308 of this title, the Administrator shall make 

15 every effort to communicate through radio, television, print, and web-based 

16 outlets all relevant information needed by disaster loan applicants, includ17 ing— 

18 (1) the date of the declaration; 

19 (2) the names of cities and towns within the disaster area; 

20 (3) loan application deadlines related to the disaster; 

21 (4) all relevant contact information for victim services available 

22 through the Administrator (including links to small business develop23 ment center websites); 

24 (5) links to relevant Federal and State disaster assistance websites, 

25 including links to websites providing information regarding assistance 

26 available from the Federal Emergency Management Agency; 

27 (6) information on eligibility criteria for the disaster assistance pro28 grams, including where loan applications can be found; and 

29 (7) loan application materials that clearly state the function of the 

30 Administration as the Federal source of disaster loans for homeowners 

31 and renters. 

32 (c) MARKETING AND OUTREACH.—The Administrator shall create a mar33 keting and outreach plan that— 

34 (1) encourages a proactive approach to the disaster relief efforts of 

35 the Administrator; 

36 (2) makes clear the services provided by the Administrator, including 

37 contact information, application information, and timelines for submit38 ting applications, the review of applications, and the disbursement of 

39 funds; 


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1 (3) describes each of the disaster assistance programs, including how 

2 each disaster assistance program is made available and the eligibility 

3 requirements for each disaster assistance program; 

4 (4) provides for regional marketing, focusing on disasters occurring 

5 in each Administration region before June 18, 2008, and likely sce6 narios for disasters in each Administration region; and 

7 (5) ensures that the marketing plan is made available at small busi8 ness development centers and on the website of the Administration. 

9 § 21305. Disaster loan processing 

10 (a) MAJOR DISASTER LOAN PROCESSING AND LOSS VERIFICATION BY

11 QUALIFIED PRIVATE CONTRACTORS.— 

12 (1) MAJOR DISASTER LOAN PROCESSING.—The Administrator may 

13 enter into an agreement with a qualified private contractor, as deter14 mined by the Administrator, to process loans under this chapter in the 

15 event of a major disaster (including any major disaster relating to 

16 which the Administrator declares eligibility for additional disaster as17 sistance under section 21308 of this title), under which the Adminis18 trator shall pay the contractor a fee for each loan processed. 

19 (2) LOAN LOSS VERIFICATION.—The Administrator may enter into 

20 an agreement with a qualified lender or loss verification professional, 

21 as determined by the Administrator, to verify losses for loans under 

22 this chapter in the event of a major disaster (including any major dis23 aster relating to which the Administrator declares eligibility for addi24 tional disaster assistance under section 21308 of this title), under 

25 which the Administrator shall pay the lender or verification professional 

26 a fee for each loan for which the lender or verification professional 

27 verifies a loss. 

28 (b) COORDINATION OF EFFORTS BETWEEN THE ADMINISTRATOR AND

29 THE COMMISSIONER OF INTERNAL REVENUE TO EXPEDITE LOAN PROC30 ESSING.—The Administrator and the Commissioner of Internal Revenue 

31 shall, to the maximum extent practicable, ensure that all relevant and allow32 able tax records for loan approval are shared with loan processors in an ex33 pedited manner on request by the Administrator. 

34 (c) INFORMATION TRACKING AND FOLLOWUP SYSTEM.— 

35 (1) INFORMATION TRACKING.— 

36 (A) IN GENERAL.—The Administrator shall develop, implement, 

37 and maintain a centralized information system to track commu38 nications between Administration personnel and applicants for dis39 aster assistance. 

40 (B) INFORMATION TO BE RECORDED.—The information system 

41 shall ensure that when an applicant for disaster assistance comVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00127 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 municates with Administration personnel on a matter relating to 

2 the application, the following information is recorded: 

3 (i) The method of communication. 

4 (ii) The date of the communication. 

5 (iii) The identity of the Administration personnel. 

6 (iv) A summary of the subject matter of the communica7 tion. 

8 (2) FOLLOWUP.—The Administrator shall ensure that an applicant 

9 for disaster assistance receives, by telephone, mail, or electronic mail, 

10 followup communications from Administration personnel at all critical 

11 stages of the application process, including the following: 

12 (A) When Administration personnel determine that additional 

13 information or documentation is required to process the applica14 tion. 

15 (B) When Administration personnel determine whether to ap16 prove or deny the disaster assistance. 

17 (C) When the primary contact person managing the application 

18 for disaster assistance has changed. 

19 (d) DISASTER ASSISTANCE PROCESSING REDUNDANCY.—The Adminis20 trator shall ensure that the Administration has in place a facility for dis21 aster assistance processing that, when the Administration’s primary facility 

22 for disaster loan processing becomes unavailable, is able to take over all dis23 aster loan processing from the primary facility within 2 days. 

24 § 21306. Disaster assistance employees 

25 (a) IN GENERAL.—In carrying out the disaster assistance programs, the 

26 Administrator may, where practicable, ensure that the number of full-time 

27 equivalent employees— 

28 (1) in the Office of the Disaster Assistance is not fewer than 800; 

29 and 

30 (2) in the Disaster Cadre of the Administration is not fewer than 

31 1,000. 

32 (b) REPORT.—In carrying out the disaster assistance programs, if the 

33 number of full-time employees for the Office of Disaster Assistance or the 

34 Disaster Cadre of the Administration is below the level required by sub35 section (a) for that office, not later than 21 days after the date on which 

36 the staffing level decreases below the level required by subsection (a), the 

37 Administrator shall submit to the Committee on Appropriations and Com38 mittee on Small Business and Entrepreneurship of the Senate and the Com39 mittee on Appropriations and Committee on Small Business of the House 

40 of Representatives a report that— 

41 (1) details staffing levels on that date; 


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1 (2) requests, if practicable and determined to be appropriate by the 

2 Administrator, additional funds for additional employees; and 

3 (3) contains such additional information as the Administrator deter4 mines to be appropriate. 

5 § 21307. Maximum loan amount 

6 (a) AGGREGATE LOAN AMOUNTS.—Except as provided in subsection (b), 

7 and notwithstanding any other provision of law, the aggregate loan amount 

8 outstanding and committed to a borrower under the disaster loan program 

9 shall not exceed $2,000,000. 

10 (b) WAIVER.—The Administrator may increase the aggregate loan 

11 amount under subsection (a) for loans relating to a disaster to a level estab12 lished by the Administrator based on appropriate economic indicators for 

13 the region in which the disaster occurred. 

14 § 21308. Declaration of eligibility for additional disaster as15 sistance 

16 (a) DEFINITIONS.—In this section: 

17 (1) ELIGIBLE SMALL BUSINESS CONCERN.—The term ‘‘eligible small 

18 business concern’’ means a small business concern— 

19 (A) that has suffered major disaster-related substantial eco20 nomic injury as a result of a major disaster; and 

21 (B)(i) for which not less than 25 percent of the market share 

22 of the small business concern is from business transacted in the 

23 major disaster area; 

24 (ii) for which not less than 25 percent of an input into a pro25 duction process of the small business concern is from the major 

26 disaster area; or 

27 (iii) that relies on a provider located in the major disaster area 

28 for a service that is not readily available elsewhere. 

29 (2) MAJOR DISASTER-RELATED SUBSTANTIAL ECONOMIC INJURY.— 

30 The term ‘‘major disaster-related substantial economic injury’’ means 

31 economic harm to a business concern that results in the inability of the 

32 business concern to— 

33 (A) meet its obligations as they mature; 

34 (B) meet its ordinary and necessary operating expenses; or 

35 (C) market, produce, or provide a product or service ordinarily 

36 marketed, produced, or provided by the business concern because 

37 the business concern relies on materials from the major disaster 

38 area or sells or markets in the major disaster area. 

39 (b) DECLARATION OF ELIGIBILITY.—If the President declares a major 

40 disaster, the Administrator may declare eligibility for additional disaster as41 sistance in accordance with this section. 


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1 (c) THRESHOLD.—A major disaster for which the Administrator declares 

2 eligibility for additional disaster assistance under this section shall be a 

3 major disaster that— 

4 (1) results in— 

5 (A) extraordinary levels of casualties or damage; or 

6 (B) disruption severely affecting the population (including a 

7 mass evacuation), the infrastructure, the environment, the econ8 omy, national morale, or government functions in an area; 

9 (2) is comparable to a catastrophic incident described in the Admin10 istrator’s national response plan (including any successor to the na11 tional response plan), unless the national response plan expires and 

12 there is no successor to the plan, in which case this paragraph shall 

13 be of no effect; and 

14 (3) is of such size and scope that— 

15 (A) the disaster loan program is incapable of providing adequate 

16 and timely assistance to individuals or business concerns located 

17 within the major disaster area; or 

18 (B) a significant number of business concerns outside the major 

19 disaster area have suffered major disaster-related substantial eco20 nomic injury as a result of the major disaster. 

21 (d) ADDITIONAL ECONOMIC INJURY DISASTER LOAN ASSISTANCE.— 

22 (1) IN GENERAL.—If the Administrator declares eligibility for addi23 tional disaster assistance under this section, the Administrator may 

24 make such loans under this subsection as the Administrator determines 

25 to be appropriate to eligible small business concerns located anywhere 

26 in the United States. 

27 (2) PROCESSING TIME.— 

28 (A) IN GENERAL.—If the Administrator determines that the av29 erage processing time for applications for disaster loans under this 

30 subsection relating to a specific major disaster is more than 15 

31 days, the Administrator shall give priority to the processing of 

32 such applications submitted by eligible small business concerns lo33 cated inside the major disaster area until the Administrator deter34 mines that the average processing time for such applications is not 

35 more than 15 days. 

36 (B) SUSPENSION OF APPLICATIONS FROM OUTSIDE MAJOR DIS37 ASTER AREA.—If the Administrator determines that the average 

38 processing time for applications for disaster loans under this sub39 section relating to a specific major disaster is more than 30 days, 

40 the Administrator shall suspend the processing of such applica41 tions submitted by eligible small business concerns located outside 


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1 the major disaster area until the Administrator determines that 

2 the average processing time for such applications is not more than 

3 15 days. 

4 (3) LOAN TERMS.—A loan under this subsection shall be made on 

5 the same terms as a loan under section 21302 of this title. 

6 § 21309. Interest rates 

7 (a) IN GENERAL.—Notwithstanding any other provision of law, except as 

8 provided in subsection (b), the interest rate on the Administrator’s share 

9 of a loan under the disaster loan program shall not exceed— 

10 (1) the average annual interest rate on all interest-bearing obliga11 tions of the United States then forming a part of the public debt as 

12 computed at the end of the fiscal year next preceding the date of the 

13 loan and adjusted to the nearest 0.125 percent; plus 

14 (2) 0.25 percent. 

15 (b) LOANS UNDER SECTION 21301 OR 21302.— 

16 (1) IN GENERAL.—The interest rate for a loan under section 21301 

17 or 21302 of this title shall not exceed the rate of interest that is in 

18 effect at the time of the occurrence of the disaster. 

19 (2) DETERMINATION.—Notwithstanding any other provision of law, 

20 the interest rate on the Federal share of a loan under section 21301 

21 or 21302 of this title, determined as of the date of the disaster, shall 

22 be— 

23 (A) in the case of a homeowner unable to secure credit else24 where, the lesser of— 

25 (i) a rate prescribed by the Administrator, not to exceed 

26 half a rate determined by the Secretary of the Treasury tak27 ing into consideration the current average market yield on 

28 outstanding marketable obligations of the United States with 

29 remaining periods to maturity comparable to the average ma30 turities of such loans plus an additional charge of not to ex31 ceed one percent per year as determined by the Adminis32 trator, and adjusted to the nearest 0.125 percent; or 

33 (ii) 4 percent per year; 

34 (B) in the case of a homeowner able to secure credit elsewhere, 

35 the lesser of— 

36 (i) a rate prescribed by the Administrator, not to exceed a 

37 rate determined by the Secretary of the Treasury taking into 

38 consideration the current average market yield on outstanding 

39 marketable obligations of the United States with remaining 

40 periods to maturity comparable to the average maturities of 

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1 cent per year as determined by the Administrator, and ad2 justed to the nearest 0.125 percent; or 

3 (ii) 8 percent per year; 

4 (C) in the case of a business concern, private nonprofit organi5 zation, or other concern (including an agricultural cooperative) un6 able to obtain credit elsewhere, not to exceed 4 percent per year; 

7 or 

8 (D) in the case of a business concern able to obtain credit else9 where, a rate prescribed by the Administrator, not to exceed the 

10 lowest of— 

11 (i) the rate prevailing in the private market for similar 

12 loans; 

13 (ii) the rate prescribed by the Administrator as the max14 imum interest rate for deferred participation (guaranteed) 

15 loans under the general business loan program; or 

16 (iii) 8 percent per year. 

17 § 21310. Maximum term 

18 No loan under the disaster loan program (including any renewal or exten19 sion of a loan) may be made for a period or periods exceeding— 

20 (1) 30 years; or 

21 (2) in the case of a loan to a business concern under section 

22 21309(b)(2)(D) of this title that is able to obtain credit elsewhere, 3 

23 years. 

24 § 21311. Deferment of repayment 

25 (a) IN GENERAL.—In making a loan under this chapter, the Adminis26 trator may provide the person receiving the loan an option to defer repay27 ment on the loan. 

28 (b) DEFERMENT PERIOD.—The period of a deferment under subsection 

29 (a) shall not exceed 4 years. 

30 § 21312. Suspension of payments 

31 (a) IN GENERAL.—The Administrator may consent to a suspension in the 

32 payment of principal and interest on, and to an extension in the maturity 

33 of, the Federal share of a loan under the disaster loan program, for a period 

34 not to exceed 5 years, if— 

35 (1) the borrower under the loan is a homeowner or a small business 

36 concern; 

37 (2) the loan was made to enable— 

38 (A) the homeowner to repair or replace his or her home; or 

39 (B) the small business concern to repair or replace plant or 

40 equipment that was damaged or destroyed as the result of a disVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00132 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 aster described in clause (i) or (ii) of section 21302(b)(2)(A) of 

2 this title; and 

3 (3) the Administrator determines that the suspension is necessary to 

4 avoid severe financial hardship. 

5 (b) PURCHASE OF PARTICIPATION OR ASSUMPTION OF OBLIGATION.— 

6 During any period in which principal and interest charges are suspended 

7 under subsection (a), the Administrator shall, on the request of any person 

8 having a participation in the loan, purchase the participation, or assume the 

9 obligation of the borrower, for the balance of the period, to make principal 

10 and interest payments on the non-Federal share of the loan, if— 

11 (1) the Administrator determines that the action is necessary to 

12 avoid a default; and 

13 (2) the borrower agrees to make payments to the Administrator in 

14 an aggregate amount equal to the amount paid in the borrower’s behalf 

15 by the Administrator, in such manner and at such times (during or 

16 after the term of the loan) as the Administrator determines having due 

17 regard for the purposes sought to be achieved by this subsection. 

18 § 21313. Participation in loans on deferred basis 

19 In an agreement to participate in a loan on a deferred basis under the 

20 disaster loan program, participation by the Administrator shall not be in ex21 cess of 90 percent of the balance of the loan outstanding at the time of 

22 disbursement. 

23 § 21314. Assistance and counseling for disaster victims 

24 In administering the disaster assistance programs, to the maximum ex25 tent possible, the Administrator shall provide assistance and counseling to 

26 disaster victims in— 

27 (1) filing applications (including the provision of information relevant 

28 to loan processing); and 

29 (2) loan closing and prompt disbursement of loan proceeds. 

30 § 21315. Priority in allocating funds 

31 In administering the disaster assistance programs, to the maximum ex32 tent possible, the Administrator shall give the disaster loan program a high 

33 priority in allocating funds for administrative expenses. 

34 § 21316. Prohibition of cancellation of certain disaster loans 

35 No portion of a loan under section 21301 or 21302 of this title shall be 

36 subject to cancellation under any provision of law. 

37 § 21317. Prohibition of net earnings clauses 

38 In making a loan under this chapter, the Administrator shall not require 

39 the borrower to pay any nonamortized amount for the first 5 years after 

40 repayment begins. 


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1 § 21318. Biennial disaster simulation exercise 

2 (a) IN GENERAL.—The Administrator shall conduct a disaster simulation 

3 exercise at least once every 2 fiscal years. 

4 (b) REQUIREMENTS.—A disaster simulation exercise shall— 

5 (1) include the participation of, at a minimum, not fewer than 50 

6 percent of the individuals in the disaster reserve corps; and 

7 (2) test, at maximum capacity, all of the information technology and 

8 telecommunications systems of the Administrator that are vital to the 

9 activities of the Administrator during a disaster. 

10 (c) REPORT.—The Administrator shall include in a report under section 

11 10717(g) of this title a report on a disaster simulation exercise conducted 

12 under subsection (a). 

13 § 21319. Disaster planning responsibilities 

14 (a) DEFINITIONS.—In this section: 

15 (1) DISASTER PLANNING OFFICER.—The term‘‘disaster planning of16 ficer’’ means the individual to whom the disaster planning function of 

17 the Administrator is assigned under subsection (b). 

18 (2) STATE.—The term ‘‘State’’ means a State of the United States, 

19 the District of Columbia, Puerto Rico, the Northern Mariana Islands, 

20 the Virgin Islands, Guam, American Samoa, and any territory or pos21 session of the United States. 

22 (b) ASSIGNMENT OF SMALL BUSINESS ADMINISTRATION DISASTER

23 PLANNING RESPONSIBILITIES.—The disaster planning function of the Ad24 ministrator shall be assigned to an individual appointed by the Adminis25 trator who— 

26 (1) is not an employee of the Office of Disaster Assistance of the 

27 Administration; 

28 (2) has proven management ability; 

29 (3) has substantial knowledge in the field of disaster readiness and 

30 emergency response; and 

31 (4) has demonstrated significant experience in the area of disaster 

32 planning. 

33 (c) RESPONSIBILITIES.—The disaster planning officer shall report di34 rectly and solely to the Administrator and shall be responsible for— 

35 (1) developing, implementing, and maintaining the comprehensive 

36 disaster response plan under section 21320 of this title; 

37 (2) ensuring that there are in-service and pre-service training proce38 dures for the disaster response staff of the Administration; 

39 (3) coordinating and directing the training exercises of the Adminis40 tration relating to disasters, including disaster simulation exercises and 

41 disaster exercises coordinated with other government agencies; and 


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1 (4) other responsibilities relevant to disaster planning and readiness, 

2 as determined by the Administrator. 

3 (d) COORDINATION.—In carrying out the responsibilities described in sub4 section (c), the disaster planning officer shall coordinate with— 

5 (1) the Office of Disaster Assistance of the Administration; 

6 (2) the Administrator of the Federal Emergency Management Agen7 cy; and 

8 (3) other Federal, State, and local disaster planning offices, as nec9 essary. 

10 (e) RESOURCES.—The Administrator shall ensure that the disaster plan11 ning officer has adequate resources to carry out the responsibilities de12 scribed in subsection (c). 

13 § 21320. Disaster response plan 

14 (a) DEFINITION OF STATE.—In this section, the term ‘‘State’’ means a 

15 State of the United States, the District of Columbia, Puerto Rico, the 

16 Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and 

17 any territory or possession of the United States. 

18 (b) PLAN.— 

19 (1) IN GENERAL.—The Administrator shall develop, implement, and 

20 maintain a comprehensive written disaster response plan. 

21 (2) CONTENTS.—The disaster response plan shall include the fol22 lowing: 

23 (A) For each Administration region, a description of the disas24 ters most likely to occur in the Administration region. 

25 (B) For each disaster described under subparagraph (A)— 

26 (i) an assessment of the disaster; 

27 (ii) an assessment of the demand for Administration assist28 ance most likely to occur in response to the disaster; 

29 (iii) an assessment of the needs of the Administration, with 

30 respect to such resources as information technology, tele31 communications, human resources, and office space, to meet 

32 the demand referred to in clause (ii); and 

33 (iv) guidelines pursuant to which the Administrator will co34 ordinate with other Federal agencies and with State and local 

35 authorities to best respond to the demand described in clause 

36 (ii) and to best use the resources referred to in that clause. 

37 (c) PLAN REVISION.—The Administrator shall update the disaster re38 sponse plan— 

39 (1) annually; and 


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1 (2) following any major disaster relating to which the Administrator 

2 declares eligibility for additional disaster assistance under section 

3 21308 of this title. 

4 (d) REQUIRED KNOWLEDGE.—The Administrator shall carry out sub5 sections (b) and (c) through an individual with substantial knowledge in the 

6 field of disaster readiness and emergency response. 

7 (e) REPORT.—The Administrator shall include in a report under section 

8 10717(g) of this title a report on the disaster response plan. 

9 § 21321. Coordination of disaster assistance programs with 

10 FEMA 

11 (a) IN GENERAL.—The Administrator shall ensure that the disaster as12 sistance programs of the Administration are coordinated, to the maximum 

13 extent practicable, with the disaster assistance programs of the Federal 

14 Emergency Management Agency. 

15 (b) REGULATIONS.— 

16 (1) IN GENERAL.—The Administrator, in consultation with the Ad17 ministrator of the Federal Emergency Management Agency, shall es18 tablish regulations to ensure that each application for disaster assist19 ance is submitted as quickly as practicable to the Administration or di20 rected to the appropriate agency under the circumstances. 

21 (2) REVISION.—The regulations shall be revised annually. 

22 (c) REPORT.—The Administrator shall include in a report under section 

23 10717(g) of this title a report on the regulations under subsection (b). 

24 § 21322. Plans to secure sufficient office space 

25 (a) IN GENERAL.—The Administrator shall develop long-term plans to se26 cure sufficient office space to accommodate an expanded workforce in times 

27 of disaster. 

28 (b) REPORT.—The Administrator shall include in a report under section 

29 10717(g) of this title a report on the plans developed under subsection (a). 

30 § 21323. Bond guarantees in procurements relating to a 

31 major disaster 

32 (a) IN GENERAL.—Except as provided in subsection (b), and notwith33 standing any other provision of law, for any procurement relating to a major 

34 disaster, the Administrator may, on such terms and conditions as the Ad35 ministrator may prescribe, guarantee and enter into commitments to guar36 antee a surety against loss resulting from a breach of the terms of a bid 

37 bond, payment bond, performance bond, or bonds ancillary thereto, by a 

38 principal on any total work order or contract amount at the time of bond 

39 execution that does not exceed $5,000,000. 

40 (b) INCREASE IN AMOUNT.—On request of the head of any Federal agen41 cy (other than the Administration) involved in reconstruction efforts in reVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00136 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 sponse to a major disaster, the Administrator may guarantee and enter into 

2 a commitment to guarantee a surety against loss under subsection (a) on 

3 any total work order or contract amount at the time of bond execution that 

4 does not exceed $10,000,000. 

5 (c) LIMITATION ON USE OF OTHER FUNDS.—The Administrator may 

6 carry out this section only with amounts appropriated in advance specifically 

7 to carry out this section. 

8 § 21324. Civil penalty 

9 A person that wrongfully misapplies the proceeds of a loan made under 

10 the disaster loan program shall be liable to the Administrator for a civil 

11 penalty in the amount that is equal to 1.5 times the original principal 

12 amount of the loan. 

13 CHAPTER 215—PRIVATE DISASTER ASSISTANCE 

14 PROGRAM 

Sec. 

21501. Definitions. 

21502. Program. 

21503. Use of loans. 

21504. Online applications. 

21505. Maximum amounts. 

21506. Terms and conditions. 

21507. Lenders. 

21508. Fees. 

21509. Documentation. 

21510. Purchase of loans. 

21511. Regulations. 

21512. Authorization of appropriations. 

15 § 21501. Definitions 

16 In this chapter: 

17 (1) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible individual’’ means an 

18 individual who is eligible for disaster assistance under section 21301 

19 of this title relating to a major disaster relating to which the Adminis20 trator declares eligibility for additional disaster assistance under sec21 tion 21308 of this title. 

22 (2) MAJOR DISASTER AREA.—The term ‘‘major disaster area’’ means 

23 an area for which the President declares a major disaster relating to 

24 which the Administrator declares eligibility for additional disaster as25 sistance under section 21308 of this title, during the period of the 

26 major disaster declaration. 

27 (3) QUALIFIED PRIVATE LENDER.—The term ‘‘qualified private lend28 er’’ means a privately-owned bank or other lending institution that— 

29 (A) is not a preferred lender; and 

30 (B) the Administrator determines meets the criteria established 

31 under section 20511 of this title. 


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1 (4) SMALL BUSINESS CONCERN.—The term ‘‘small business concern’’ 

2 means a small business concern (as defined in section 10101 or 30101 

3 of this title). 

4 § 21502. Program 

5 The Administrator shall carry out a program, to be known as the private 

6 disaster assistance program, under which the Administrator may guarantee 

7 timely payment of principal and interest, as scheduled, on any loan made 

8 to a small business concern located in a major disaster area or to an eligible 

9 individual. 

10 § 21503. Use of loans 

11 A loan guaranteed by the Administrator under this chapter may be used 

12 for any purpose authorized under chapter 213. 

13 § 21504. Online applications 

14 (a) ESTABLISHMENT OF PROCESS.—The Administrator may establish, di15 rectly or through an agreement with another entity, an online application 

16 process for loans guaranteed under this chapter. 

17 (b) OTHER FEDERAL ASSISTANCE.—The Administrator may coordinate 

18 with the head of any other appropriate Federal agency so that any applica19 tion submitted through an online application process established under this 

20 section may be considered for any other Federal assistance program for dis21 aster relief. 

22 (c) CONSULTATION.—In establishing an online application process under 

23 this section, the Administrator shall consult with appropriate persons from 

24 the public and private sectors, including private lenders. 

25 § 21505. Maximum amounts 

26 (a) GUARANTEE PERCENTAGE.—The Administrator may guarantee not 

27 more than 85 percent of a loan under this chapter. 

28 (b) LOAN AMOUNT.—The maximum amount of a loan guaranteed under 

29 this chapter shall be $2,000,000. 

30 § 21506. Terms and conditions 

31 A loan guaranteed under this chapter shall be made under the same 

32 terms and conditions as a loan under chapter 213. 

33 § 21507. Lenders 

34 (a) IN GENERAL.— 

35 (1) LOANS TO AN ELIGIBLE INDIVIDUAL.—A loan guaranteed under 

36 this chapter made to an eligible individual may be made by a preferred 

37 lender. 

38 (2) LOANS TO A SMALL BUSINESS CONCERN.—A loan guaranteed 

39 under this chapter made to a small business concern may be made by 

40 a qualified private lender or by a preferred lender that also makes 

41 loans to eligible individuals. 


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1 (b) COMPLIANCE.—If the Administrator determines that a preferred lend2 er knowingly failed to comply with the underwriting standards for loans 

3 guaranteed under this chapter or violated the terms of the standard oper4 ating procedure agreement between the preferred lender and the Adminis5 trator, the Administrator shall do one or both of the following: 

6 (1) Exclude the preferred lender from participating in the private 

7 disaster assistance program. 

8 (2) Exclude the preferred lender from participating in the preferred 

9 lender program for a period of not more than 5 years. 

10 § 21508. Fees 

11 (a) IN GENERAL.—The Administrator shall not collect a guarantee fee 

12 under this chapter. 

13 (b) ORIGINATION FEE.—The Administrator may pay a qualified private 

14 lender or preferred lender an origination fee for a loan guaranteed under 

15 this chapter in an amount agreed on in advance between the qualified pri16 vate lender or preferred lender and the Administrator. 

17 § 21509. Documentation 

18 (a) IN GENERAL.—A qualified private lender or preferred lender may use 

19 its own loan documentation for a loan guaranteed by the Administrator 

20 under this chapter, to the extent authorized by the Administrator. 

21 (b) NOT PART OF QUALIFICATION CRITERIA.—The ability of a lender to 

22 use its own loan documentation for a loan guaranteed under this chapter 

23 shall not be considered part of the criteria for becoming a qualified private 

24 lender under the regulations promulgated under section 21511 of this title. 

25 § 21510. Purchase of loans 

26 The Administrator may enter into an agreement with a qualified private 

27 lender or preferred lender to purchase any loan guaranteed under this chap28 ter. 

29 § 21511. Regulations 

30 The Administrator shall promulgate regulations establishing permanent 

31 criteria for qualified private lenders. 

32 § 21512. Authorization of appropriations 

33 (a) IN GENERAL.—Amounts necessary to carry out this chapter shall be 

34 made available from amounts appropriated to the Administration to carry 

35 out chapter 213. 

36 (b) AUTHORITY TO REDUCE INTEREST RATES AND OTHER TERMS AND

37 CONDITIONS.—Funds appropriated to the Administration to carry out this 

38 chapter may be used by the Administrator to meet the loan terms and con39 ditions specified in section 21506 of this title. 


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1 CHAPTER 217—IMMEDIATE DISASTER ASSISTANCE 

2 PROGRAM 

Sec. 

21701. Definition of program. 

21702. Program. 

21703. Eligibility. 

21704. Use of proceeds. 

21705. Loan terms. 

21706. Approval or disapproval. 

3 § 21701. Definition of program 

4 In this chapter, the term ‘‘program’’ means the immediate disaster assist5 ance program established under section 21702 of this title. 

6 § 21702. Program 

7 The Administrator shall carry out a program, to be known as the imme8 diate disaster assistance program, under which the Administrator partici9 pates on a deferred (guaranteed) basis in 85 percent of the balance of the 

10 financing outstanding at the time of disbursement of the loan if the balance 

11 is less than or equal to $25,000 for business concerns affected by a disaster. 

12 § 21703. Eligibility 

13 To receive a loan guarantee under section 21702 of this title, an appli14 cant shall apply for, and meet basic eligibility standards for, a loan under 

15 chapter 213 or 215. 

16 § 21704. Use of proceeds 

17 A business concern that receives a loan under chapter 213 or 215 shall 

18 use the proceeds of the loan to repay all loans guaranteed under section 

19 21702 of this title, if any, before using the proceeds for any other purpose. 

20 § 21705. Loan terms 

21 (a) NO PREPAYMENT PENALTY.—There shall be no prepayment penalty 

22 on a loan guaranteed under section 21702 of this title. 

23 (b) REPAYMENT.—A business concern that receives a loan guaranteed 

24 under section 21702 of this title and that is disapproved for a loan under 

25 chapter 213 or 215 shall repay the loan guaranteed under section 21702 

26 of this title not later than the date established by the Administrator, which 

27 shall not be earlier than 10 years after the date on which the loan guaran28 teed under section 21702 of this title is disbursed. 

29 § 21706. Approval or disapproval 

30 The Administrator shall ensure that each applicant for a loan under the 

31 program receives a decision approving or disapproving the application within 

32 36 hours after the Administrator receives the application. 

33 CHAPTER 219—EXPEDITED DISASTER ASSISTANCE 

34 BUSINESS LOAN GUARANTEE PROGRAM 

Sec. 

21901. Definition of program. 

21902. Program. 


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21903. Consultation. 

21904. Regulations. 

1 § 21901. Definition of program 

2 In this chapter, the term ‘‘program’’ means the expedited disaster assist3 ance business loan guarantee program established under section 21902 of 

4 this title. 

5 § 21902. Program 

6 The Administrator shall establish and implement an expedited disaster 

7 assistance business loan guarantee program under which the Administrator 

8 may, on an expedited basis, guarantee timely payment of principal and in9 terest, as scheduled on any loan made to an eligible small business concern 

10 under section 21308 of this title. 

11 § 21903. Consultation 

12 In establishing the program, the Administrator shall consult with— 

13 (1) appropriate personnel (including district office personnel) of the 

14 Administration; 

15 (2) appropriate technical assistance providers (including small busi16 ness development centers); 

17 (3) appropriate lenders and credit unions; and 

18 (4) the Committee on Small Business and Entrepreneurship of the 

19 Senate and Committee on Small Business of the House of Representa20 tives. 

21 § 21904. Regulations 

22 (a) IN GENERAL.—The Administrator shall issue regulations establishing 

23 and implementing the program in accordance with this chapter. 

24 (b) CONTENTS.—The regulations shall— 

25 (1) identify whether appropriate uses of funds under the program 

26 may include— 

27 (A) paying employees; 

28 (B) paying bills and other financial obligations; 

29 (C) making repairs; 

30 (D) purchasing inventory; 

31 (E) restarting or operating a small business concern in the com32 munity in which the small business concern was conducting oper33 ations prior to the applicable major disaster or in a neighboring 

34 area in the disaster area; or 

35 (F) covering additional costs until the small business concern is 

36 able to obtain funding through insurance claims, Federal assist37 ance programs, or other sources; and 

38 (2) set the terms and conditions of any loan made under the pro39 gram. 


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1 (c) TERMS AND CONDITIONS.—A loan guaranteed by the Administrator 

2 under the program— 

3 (1) shall be for not more than $150,000; 

4 (2) shall be a short-term loan, not to exceed 180 days, except that 

5 the Administrator may extend the term as the Administrator deter6 mines to be appropriate on a case-by-case basis; 

7 (3) shall have an interest rate not to exceed 300 basis points above 

8 the interest rate established by the Board of Governors of the Federal 

9 Reserve System that one bank charges another for reserves that are 

10 lent on an overnight basis on the date on which the loan is made; 

11 (4) shall have no prepayment penalty; 

12 (5) may be made only to a borrower that meets the requirements for 

13 a loan under chapter 213; 

14 (6) may be refinanced as part of any subsequent disaster assistance 

15 provided under chapter 213; 

16 (7) may receive expedited loss verification and loan processing, if the 

17 applicant— 

18 (A) is a major source of employment in the disaster area (which 

19 shall be determined in the same manner as under section 

20 21303(e)(2) of this title); or 

21 (B) is vital to recovery efforts in the region (including providing 

22 debris removal services, manufactured housing, or building mate23 rials); and 

24 (8) shall be subject to such additional terms as the Administrator 

25 determines to be appropriate. 

26 DIVISION E—BUSINESS DEVELOPMENT 

27 PROGRAM 

28 CHAPTER 231—GENERAL PROVISIONS 

Sec. 

23101. Definitions. 

23102. Establishment of business development program. 

23103. Unemployed or low-income individuals. 

23104. Restrictions on activities of Administration employees. 

23105. Encouragement of subcontracts. 

23106. Federal contracts, subcontracts, and deposits. 

23107. Business opportunity specialists. 

23108. Requests for investigation. 

29 § 23101. Definitions 

30 In this division: 

31 (1) ASSOCIATE ADMINISTRATOR.—The term ‘‘Associate Adminis32 trator’’ means the Associate Administrator for Minority Small Business 

33 and Capital Ownership Development. 


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1 (2) BUSINESS ACTIVITY TARGET.—The term ‘‘business activity tar2 get’’ means a target contained in a business plan for contracts awarded 

3 other than through the program. 

4 (3) BUSINESS OPPORTUNITY SPECIALIST.—The term ‘‘business op5 portunity specialist’’ means an Administration employee responsible for 

6 providing business development assistance to a program participant. 

7 (4) BUSINESS PLAN.—The term ‘‘business plan’’ means the business 

8 plan of a program participant under section 23318 of this title. 

9 (5) DIRECTOR.—The term ‘‘Director’’ means the Director of the Di10 vision. 

11 (6) DISADVANTAGED OWNER.—The term ‘‘disadvantaged owner’’ 

12 means an individual on whom eligibility is based for participation in 

13 the business development program. 

14 (7) DIVISION.—The term ‘‘Division’’ means the Division of Program 

15 Certification and Eligibility established by section 10308 of this title. 

16 (8) ECONOMICALLY DISADVANTAGED INDIAN TRIBE.—The term 

17 ‘‘economically disadvantaged Indian tribe’’ means an Indian tribe that 

18 the Administrator determines to be economically disadvantaged based 

19 on consideration of available information such as— 

20 (A) the per capita income of members of the Indian tribe, ex21 cluding judgment awards; 

22 (B) the percentage of the local Indian population below the pov23 erty level; and 

24 (C) the Indian tribe’s access to capital markets. 

25 (9) EXECUTIVE AGENCY.—The term ’’executive agency’’ has the 

26 meaning given the term in section 4 of the Office of Federal Procure27 ment Policy Act (41 U.S.C. 403). 

28 (10) GRADUATE.—The term ‘‘graduate’’, with reference to a pro29 gram participant, means to graduate the program participant from the 

30 program under section 23320 of this title. 

31 (11) INDIAN TRIBE.—The term ‘‘Indian tribe’’ means an Indian 

32 tribe, band, nation, or other organized group or community of Indians, 

33 including any Alaska Native village or regional or village corporation 

34 (within the meaning of the Alaska Native Claims Settlement Act (43 

35 U.S.C. 1601 et seq.)) that— 

36 (A) is recognized as eligible for the special programs and serv37 ices provided by the United States to Indians because of their sta38 tus as Indians; or 

39 (B) is recognized as such by the State in which the Indian tribe, 

40 band, nation, group, or community resides. 


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1 (12) PROGRAM.—The term ‘‘program’’ means the business develop2 ment program. 

3 (13) PROGRAM PARTICIPANT.—The term ‘‘program participant’’ 

4 means a small business concern that is participating in the program. 

5 (14) PROGRAM PARTICIPATION PERIOD.—The term ‘‘program par6 ticipation period’’, with respect to a program participant, means the pe7 riod of program participation applicable to the program participant 

8 under section 23329 of this title. 

9 (15) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SO10 CIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.— 

11 (A) IN GENERAL.—The term ‘‘small business concern owned 

12 and controlled by socially and economically disadvantaged individ13 uals’’ means a small business concern— 

14 (i) not less than 51 percent of which is unconditionally 

15 owned by— 

16 (I) one or more socially and economically disadvan17 taged individuals; 

18 (II) an economically disadvantaged Indian tribe (or a 

19 wholly owned business entity of an economically dis20 advantaged Indian tribe); or 

21 (III) an economically disadvantaged Native Hawaiian 

22 organization; and 

23 (ii) the management and daily business operations of which 

24 are controlled by one or more— 

25 (I) socially and economically disadvantaged individ26 uals; 

27 (II) members of an economically disadvantaged Indian 

28 tribe; or 

29 (III) Native Hawaiian organizations. 

30 (B) SIZE DETERMINATION FOR INDIAN TRIBES.—In deter31 mining the size of a concern owned by an economically disadvan32 taged Indian tribe (or a wholly owned business entity of an eco33 nomically disadvantaged Indian tribe) for purposes of subpara34 graph (A), the concern’s size shall be independently determined 

35 without regard to its affiliation with the Indian tribe, any entity 

36 of the tribal government, or any other business enterprise owned 

37 by the Indian tribe, unless the Administrator determines that one 

38 or more such tribally owned business concerns have obtained, or 

39 are likely to obtain, a substantial unfair competitive advantage 

40 within an industry category. 

41 (16) SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUAL.— 


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1 (A) IN GENERAL.—The term ‘‘socially and economically dis2 advantaged individual’’ means a member of a group of socially dis3 advantaged individuals whose ability to compete in the free enter4 prise system has been impaired due to diminished capital and 

5 credit opportunities as compared with others in the same business 

6 area who are not socially disadvantaged. 

7 (B) DETERMINATION OF DEGREE OF DIMINISHED CREDIT AND

8 CAPITAL OPPORTUNITIES.—In determining the degree of dimin9 ished credit and capital opportunities, the Administrator shall con10 sider the assets and net worth of a socially disadvantaged indi11 vidual. 

12 (C) NET WORTH.—In computing personal net worth for pur13 poses of this paragraph, there shall be excluded— 

14 (i) the value of investments that disadvantaged owners 

15 have in their concern, except that the value of such invest16 ments shall be taken into account when comparing the con17 cern to other concerns in the same business area that are 

18 owned by other than socially disadvantaged persons; and 

19 (ii) the equity that disadvantaged owners have in their pri20 mary personal residences, except that any portion of such eq21 uity that is attributable to unduly excessive withdrawals from 

22 a program participant or a concern applying for program par23 ticipation shall be taken into account. 

24 (17) SOCIALLY DISADVANTAGED INDIVIDUAL.— 

25 (A) IN GENERAL.—The term ‘‘socially disadvantaged indi26 vidual’’ means a member of a group of individuals who have been 

27 subjected to racial or ethnic prejudice or cultural bias because of 

28 their identity as members of the group without regard to their in29 dividual qualities. 

30 (B) DETERMINATION.— 

31 (i) IN GENERAL.—A determination under subparagraph 

32 (A) with respect to whether a group has been subjected to 

33 prejudice or bias shall be made by the Administrator after 

34 consultation with the Associate Administrator for Minority 

35 Small Business and Capital Ownership Development. 

36 (ii) NONDELEGABILITY.—The authority of the Adminis37 trator under clause (i) may not be delegated. 

38 (18) TERMINATE.—The term ‘‘terminate’’, with reference to a pro39 gram participant, means to suspend or totally deny assistance to a pro40 gram participant under the program, prior to the graduation of the 


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1 program participant or prior to the expiration of the program partici2 pant’s program participation period, under section 23321 of this title. 

3 § 23102. Establishment of business development program 

4 There is established within the Administration the business development 

5 program. 

6 § 23103. Unemployed or low-income individuals 

7 The program shall be used to— 

8 (1) assist in the establishment, preservation, and strengthening of 

9 small business concerns and improve the managerial skills employed in 

10 small business concerns, with special attention to, and particular em11 phasis on the preservation or establishment of, small business concerns 

12 that are— 

13 (A) located in urban or rural areas with high proportions of un14 employed or low-income individuals; or 

15 (B) owned by low-income individuals; and 

16 (2) mobilize for those objectives private as well as public managerial 

17 skills and resources. 

18 § 23104. Restrictions on activities of Administration employ19 ees 

20 (a) ACTIVITIES AND TRANSACTIONS RELATING TO OWNERSHIP OF A

21 PROGRAM PARTICIPANT.— 

22 (1) IN GENERAL.—A person within the employ of the Administration 

23 shall not, during the term of such employment and for a period of 2 

24 years after the employment has been terminated, engage in any activity 

25 or transaction described in paragraph (2) with respect to any program 

26 participant during the person’s term of employment, if the person par27 ticipated personally (directly or indirectly)— 

28 (A) in decisionmaking responsibilities relating to the program 

29 participant; or 

30 (B) with respect to the administration of any assistance pro31 vided to program participants generally under the program. 

32 (2) ACTIVITIES AND TRANSACTIONS.—The activities and transactions 

33 referred to in paragraph (1) are— 

34 (A) the buying, selling, or receiving (except by inheritance) of 

35 any legal or beneficial ownership of stock or any other ownership 

36 interest or the right to acquire any such interest; 

37 (B) the entering into or execution of any written or oral agree38 ment (whether or not legally enforceable) to purchase or otherwise 

39 obtain any right or interest described in subparagraph (A); and 

40 (C) the receipt of any other benefit or right that may be an inci41 dent of ownership. 


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1 (3) ANNUAL CERTIFICATION.— 

2 (A) IN GENERAL.—An employee described in subparagraph (B) 

3 shall annually submit to the Administrator a written certification 

4 regarding compliance with this section. 

5 (B) EMPLOYEE.—The employees referred to in subparagraph 

6 (A) are— 

7 (i) a regional administrator; 

8 (ii) a district director; 

9 (iii) the Associate Administrator; 

10 (iv) an employee whose principal duties relate to the award 

11 of contracts or the provision of other assistance under the 

12 program; and 

13 (v) such other employees as the Administrator may des14 ignate. 

15 (4) CIVIL PENALTIES.— 

16 (A) IN GENERAL.—An employee or former employee of the Ad17 ministration who violates this section shall be subject to a civil 

18 penalty, assessed by the Attorney General, that shall not exceed 

19 300 percent of the maximum amount of gain that the employee 

20 realized or could have realized as a result of engaging in the activ21 ity and transaction prohibited by paragraph (1). 

22 (B) FALSE CERTIFICATION.—In addition to any other remedy 

23 or sanction provided for under law (including a regulation), a per24 son who makes a false certification under paragraph (3)(A) shall 

25 be subject to a civil penalty under section 3802 of title 31. 

26 (b) POLITICAL ACTIVITIES AND AFFILIATIONS.— 

27 (1) PROHIBITION.—An employee of the Administration who has au28 thority to take, direct others to take, recommend, or approve any action 

29 with respect to any program or activity under the program shall not, 

30 with respect to any such action, exercise or threaten to exercise that 

31 authority on the basis of the political activity or affiliation of any per32 son. 

33 (2) REPORTING OF SOLICITATION TO VIOLATE.—An employee of the 

34 Administration whose participation in a violation of paragraph (1) is 

35 directed or solicited shall expeditiously report the direction or solicita36 tion to the Inspector General of the Administration. 

37 (3) DISCIPLINARY ACTION.—An employee of the Administration who 

38 willfully and knowingly violates paragraph (1) or (2) shall be subject 

39 to disciplinary action, which may consist of separation from service, re40 duction in grade, suspension, or reprimand. 


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1 (4) APPLICABILITY.—Paragraphs (1) and (2) do not apply to an ac2 tion taken as a penalty or other enforcement of a violation of any law 

3 (including a regulation) prohibiting or restricting political activity. 

4 (5) OTHER PROHIBITIONS, MEASURES, AND LIABILITIES.—Para5 graphs (1) to (4) are in addition to, and not in lieu of, any other prohi6 bitions, measures, or liabilities that may arise under any other provi7 sion of law. 

8 § 23105. Encouragement of subcontracts 

9 (a) IN GENERAL.—The Administrator shall encourage the placement of 

10 subcontracts by businesses with small business concerns located in areas of 

11 high concentration of unemployed or low-income individuals and with pro12 gram participants. 

13 (b) INCENTIVES AND ASSISTANCE.—The Administrator may provide in14 centives and assistance to a business to aid in the training and upgrading 

15 of potential program participant subcontractors. 

16 § 23106. Federal contracts, subcontracts, and deposits 

17 The Administrator shall take such steps as are necessary and appro18 priate, in coordination and cooperation with the heads of other Federal 

19 agencies, to ensure that contracts, subcontracts, and deposits made by the 

20 Federal Government or with programs aided with Federal funds are placed 

21 in such a way as to further the purposes of the program. 

22 § 23107. Business opportunity specialists 

23 (a) POSITION.—In each Administration field office responsible for assist24 ing one or more program participants there shall be a position designated 

25 as a business opportunity specialist. 

26 (b) ADEQUATE NUMBER.—To the maximum extent practicable, the Ad27 ministrator shall ensure that an adequate number of business opportunity 

28 specialists are assigned to each district office to carry out the responsibil29 ities of the program and to assist program participants. 

30 (c) TRAINING.—The Administrator shall take such actions as are appro31 priate to ensure that any person employed as a business opportunity spe32 cialist receives adequate periodic training to ensure that the employee is ca33 pable of assisting program participants in fully utilizing the program and 

34 meeting the requirements of this subtitle and subtitle I. 

35 § 23108. Requests for investigation 

36 The Committee on Small Business and Entrepreneurship of the Senate 

37 or the Committee on Small Business of the House of Representatives may 

38 request that the Office of the Inspector General of the Administration con39 duct an investigation of any activity conducted under the program. Not later 

40 than 30 days after the receipt of such a request, the Inspector General shall 

41 inform the committee, in writing, of the disposition of the request. 


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1 CHAPTER 233—CONTRACTING 

Sec. 

23301. Contracting authority. 

23302. Contracting procedure. 

23303. Fair market price. 

23304. Award after completion of program participation period. 

23305. Award through competition. 

23306. Participation by program participants in negotiation of contracts to be awarded noncompetitively. 

23307. Sole source award. 

23308. Annual certification regarding ownership and control. 

23309. Annual submission regarding economic disadvantage. 

23310. Review of economic disadvantage and withdrawal of assets. 

23311. Hearing on the record. 

23312. Program participant capability. 

23313. Percentages of contract performance by program participants. 

23314. Wholesalers and retailers. 

23315. Reporting by program participants to business opportunity specialists. 

23316. Transfer of ownership or control. 

23317. Assistance for program participants. 

23318. Business plans. 

23319. Denial of further assistance. 

23320. Graduation. 

23321. Termination. 

23322. Evaluation of eligibility. 

23323. Limitation of eligibility to one small business concern. 

23324. Limitation on denial of admission into program based on unavailability of specific 

contract opportunities. 

23325. Certification decision. 

23326. Review of new entrants into the program. 

23327. Program stages. 

23328. Attainment of business activity targets. 

23329. Program participation period. 

23330. Collection of data on program operations. 

23331. Approval of contract options and modifications. 

23332. Orderly and efficient management of program. 

23333. Participation in federally funded programs and projects. 

2 § 23301. Contracting authority 

3 (a) IN GENERAL.—When the Administrator determines that such action 

4 is necessary or appropriate, the Administrator shall— 

5 (1) enter into contracts with procuring agencies obligating the Ad6 ministrator to furnish articles, equipment, supplies, services, or mate7 rials to the Government or to perform construction work for the Gov8 ernment; and 

9 (2) arrange for the performance of such contracts by negotiating or 

10 otherwise letting a subcontract to one or more small business concerns 

11 owned and controlled by socially and economically disadvantaged indi12 viduals— 

13 (A) for the manufacture, supply, assembly of the articles, equip14 ment, supplies, materials, or parts thereof, for the construction 

15 work, for the services, or for servicing or processing in connection 

16 with the manufacturing, construction, or services; or 

17 (B) for such management services as are necessary to enable 

18 the Administrator to perform the contract. 


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1 (b) CONSTRUCTION SUBCONTRACTS.—To the maximum extent prac2 ticable, construction subcontracts awarded by the Administrator under the 

3 program shall be awarded within the county or State in which the work is 

4 to be performed. 

5 (c) INAPPLICABILITY TO CERTAIN PROCUREMENTS.—The requirements 

6 of the program do not apply to— 

7 (1) a procurement under conditions described in— 

8 (A) paragraph (2), (3), (4), (5), or (7) of section 303(c) of the 

9 Federal Property and Administrative Services Act of 1949 (41 

10 U.S.C. 253(c)); or 

11 (B) paragraph (2), (3), (4), (5), or (7) of section 2304(c) of 

12 title 10; or 

13 (2) a procurement by an executive agency for which the head of the 

14 executive agency makes a determination in writing, after consultation 

15 with the Administrator and the Administrator for Federal Procurement 

16 Policy, that it is not appropriate or reasonable to publish a notice be17 fore issuing a solicitation. 

18 § 23302. Contracting procedure 

19 (a) IN GENERAL.—If the Administrator certifies to a contracting officer 

20 of a procuring agency that the Administrator is competent and responsible 

21 to perform a specific Government procurement contract to be let by the con22 tracting officer, the contracting officer may let the contract to the Adminis23 trator on such terms and conditions as may be agreed on between the Ad24 ministrator and the contracting officer. 

25 (b) FAILURE TO AGREE.— 

26 (1) IN GENERAL.—If the Administrator and the contracting officer 

27 fail to agree on a procurement contract— 

28 (A) not later than 5 days after the date on which the Adminis29 trator is notified of the contracting officer’s adverse decision, the 

30 Administrator may notify the contracting officer of the intent to 

31 appeal the adverse decision; and 

32 (B) not later than 15 days after that date, the Administrator 

33 shall file a written request for a reconsideration of the adverse de34 cision with the head of the procuring agency. 

35 (2) ADVERSE DECISION.—For the purposes of paragraph (1)(A), a 

36 contracting officer’s adverse decision includes— 

37 (A) a decision not to make available for award under the pro38 gram a particular procurement requirement; and 

39 (B) a failure to agree on the terms and conditions of a contract 

40 to be awarded noncompetitively under the program. 


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1 (3) SUSPENSION OF ACTION.—On receipt of a notice of intent to ap2 peal under paragraph (1)(A), the agency head shall suspend further ac3 tion regarding the procurement until a written decision on the Adminis4 trator’s request for reconsideration is issued by the agency head, unless 

5 the contracting officer makes a written determination that urgent and 

6 compelling circumstances that significantly affect interests of the 

7 United States will not permit waiting for a reconsideration of the ad8 verse decision. 

9 (4) DENIAL OF REQUEST FOR RECONSIDERATION.—If the Adminis10 trator’s request for reconsideration is denied, the procuring agency 

11 head shall specify the reasons why the small business concern selected 

12 by the Administrator to perform the procurement requirement was de13 termined to be incapable of performing the procurement requirement, 

14 and the findings supporting the determination, which shall be made a 

15 part of the contract file for the requirement. 

16 § 23303. Fair market price 

17 (a) IN GENERAL.—A contract may not be awarded under the program 

18 if the award of the contract would result in a cost to the procuring agency 

19 that exceeds a fair market price. 

20 (b) DETERMINATION.— 

21 (1) IN GENERAL.—The fair market price under subsection (a) shall 

22 be determined by the procuring agency in accordance with this sub23 section. 

24 (2) NEW PROCUREMENT.— 

25 (A) IN GENERAL.—The estimate of a current fair market price 

26 for a new procurement requirement, or a requirement that does 

27 not have a satisfactory procurement history, shall be derived from 

28 a price or cost analysis. 

29 (B) FACTORS.—A price or cost analysis— 

30 (i) may take into account prevailing market conditions, 

31 commercial prices for similar products or services, or data ob32 tained from any other Federal agency; and 

33 (ii) shall consider such cost or pricing data as may be time34 ly submitted by the Administrator. 

35 (3) PROCUREMENTS WITH SATISFACTORY PROCUREMENT HIS36 TORY.— 

37 (A) IN GENERAL.—The estimate of a current fair market price 

38 for a procurement requirement that has a satisfactory procure39 ment history shall be based on recent award prices adjusted to en40 sure comparability. 


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1 (B) ADJUSTMENT.—An adjustment under subparagraph (A) 

2 shall take into account differences in quantities, performance 

3 times, plans, specifications, transportation costs, packaging and 

4 packing costs, labor and materials costs, overhead costs, and any 

5 other additional costs that are considered appropriate. 

6 (c) ESTIMATION METHOD.— 

7 (1) IN GENERAL.—On the request of the Administrator, the pro8 curing agency shall promptly submit to the Administrator a written 

9 statement detailing the method used by the procuring agency to esti10 mate the current fair market price for the contract, identifying the in11 formation, studies, analyses, and other data used by the procuring 

12 agency. 

13 (2) NONDISCLOSURE.—The procuring agency’s estimate of the cur14 rent fair market price and any supporting data furnished to the Ad15 ministrator shall not be disclosed to any potential offeror other than 

16 the Administrator. 

17 (d) PROTEST.—A small business concern selected by the Administrator 

18 to perform or negotiate a contract to be let under the program may request 

19 the Administrator to protest the procuring agency’s estimate of the fair 

20 market price for the contract. 

21 § 23304. Award after completion of program participation 

22 period 

23 The Administrator shall make an award to a small business concern 

24 owned and controlled by socially and economically disadvantaged individuals 

25 that has completed its program participation period if— 

26 (1) the contract will be awarded as a result of an offer (including 

27 price) submitted in response to a published solicitation relating to a 

28 competition conducted under section 23305 of this title; and 

29 (2) the prospective contract awardee was a program participant eligi30 ble for award of the contract on the date specified for receipt of offers 

31 contained in the contract solicitation. 

32 § 23305. Award through competition 

33 (a) IN GENERAL.—Except as provided in subsections (b) and (c), a con34 tract opportunity offered for award under the program shall be awarded on 

35 the basis of competition restricted to eligible program participants if— 

36 (1) there is a reasonable expectation that— 

37 (A) at least 2 eligible program participants will submit offers; 

38 and 

39 (B) an award can be made at a fair market price; and 

40 (2) the anticipated award price of the contract (including options) 

41 will exceed— 


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1 (A) $5,000,000, in the case of a contract opportunity assigned 

2 a North American Industry Classification System code for manu3 facturing; or 

4 (B) $3,000,000, in the case of any other contract opportunity. 

5 (b) RESTRICTED COMPETITION FOR SMALLER CONTRACTS.— 

6 (1) IN GENERAL.—The Associate Administrator may approve a re7 quest from a Federal agency to award a contract opportunity under the 

8 program on the basis of a competition restricted to eligible program 

9 participants even if the anticipated award price is not expected to ex10 ceed the dollar amounts specified in subsection (a)(2). 

11 (2) APPROVALS.—Approvals under paragraph (1) shall be granted 

12 only on a limited basis. 

13 (3) NONDELEGABILITY.—The authority of the Associate Adminis14 trator under paragraph (1) may not be delegated. 

15 (c) PROGRAM PARTICIPANTS OWNED AND CONTROLLED BY AN ECONOMI16 CALLY DISADVANTAGED INDIAN TRIBE.—Subsection (a) does not preclude 

17 the award of a sole source contract under section 23307 of this title, with18 out regard to the anticipated award price of the contract, to a program par19 ticipant that is owned and controlled by an economically disadvantaged In20 dian tribe. 

21 (d) PROGRAM PARTICIPANTS OWNED AND CONTROLLED BY NATIVE HA22 WAIIAN ORGANIZATIONS.—For purposes of contracting with agencies of the 

23 Department of Defense, subsection (a) does not preclude the award of a sole 

24 source contract under section 23307 of this title, without regard to the an25 ticipated award price of the contract, to a program participant that is 

26 owned and controlled by a Native Hawaiian organization. 

27 § 23306. Participation by program participants in negotia28 tion of contracts to be awarded noncompetitively 

29 A program participant selected by the Administrator to perform a con30 tract to be let noncompetitively under the program shall, when practicable, 

31 participate in any negotiation of the terms and conditions of the contract. 

32 § 23307. Sole source award 

33 (a) IN GENERAL.—The Administrator shall award a sole source contract 

34 under the program to a program participant recommended by the Federal 

35 agency offering the contract opportunity if— 

36 (1) the program participant is determined to be a responsible con37 tractor with respect to performance of the contract; 

38 (2) the award of the contract would be consistent with the program 

39 participant’s business plan; and 


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1 (3) the award of the contract would not result in the program par2 ticipant’s exceeding the requirements established by section 23328 of 

3 this title. 

4 (b) EQUITABLE GEOGRAPHIC DISTRIBUTION.—To the maximum extent 

5 practicable, the Administrator shall promote the equitable geographic dis6 tribution of sole source contracts awarded under this section. 

7 § 23308. Annual certification regarding ownership and con8 trol 

9 A program participant shall annually certify that the program participant 

10 meets the requirements of section 23101(15) of this title regarding owner11 ship and control. 

12 § 23309. Annual submission regarding economic disadvan13 tage 

14 A program participant shall annually submit to the Administrator— 

15 (1) a personal financial statement for each disadvantaged owner; 

16 (2) a record of all payments made by the program participant to 

17 each of its disadvantaged owners or to any person or entity affiliated 

18 with its disadvantaged owners; and 

19 (3) such other information as the Administrator considers necessary 

20 to make the determinations required by paragraphs (8) and (16) of 

21 section 23101 of this title and section 23310 of this title. 

22 § 23310. Review of economic disadvantage and withdrawal 

23 of assets 

24 (a) ECONOMIC DISADVANTAGE.—If, on the basis of information provided 

25 by a program participant under section 23309 of this title or information 

26 otherwise obtained by the Administrator, the Administrator has reason to 

27 believe that the standards to establish economic disadvantage under section 

28 23101(15) of this title are not met, the Administrator shall conduct a re29 view to determine whether the program participant and its disadvantaged 

30 owners continue to be impaired in their ability to compete in the free enter31 prise system due to diminished capital and credit opportunities as compared 

32 with others in the same business area who are not socially disadvantaged. 

33 (b) WITHDRAWAL OF ASSETS.— 

34 (1) IN GENERAL.—If, on the basis of information provided by a pro35 gram participant under section 23309 of this title or information other36 wise obtained by the Administrator, the Administrator has reason to 

37 believe that the amount of funds or other assets withdrawn from a pro38 gram participant for the personal benefit of its disadvantaged owners 

39 or any person or entity affiliated with its disadvantaged owners may 

40 have been unduly excessive, the Administrator shall conduct a review 

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1 mental to the achievement of the targets, objectives, and goals con2 tained in the program participant’s business plan. 

3 (2) TERMINATION OR REQUIREMENT TO REINVEST ASSETS.—If the 

4 Administrator determines in a review under paragraph (1) that funds 

5 or other assets have been withdrawn to the detriment of the program 

6 participant’s business, the Administrator shall— 

7 (A) initiate a proceeding to terminate the program participant 

8 under section 23321 of this title; or 

9 (B) require an appropriate reinvestment of funds or other assets 

10 and such other steps as the Administrator considers necessary to 

11 ensure the protection of the program participant. 

12 § 23311. Hearing on the record 

13 (a) OPPORTUNITY FOR HEARING.—Before taking an action described in 

14 subsection (b) with respect to a small business concern, the Administrator 

15 shall provide the small business concern an opportunity for a hearing on the 

16 record in accordance with chapter 5 of title 5. 

17 (b) ACTIONS.—The actions referred to in subsection (a) are— 

18 (1) denial of admission to the program based on a determination 

19 that— 

20 (A) a small business concern is not a small business concern 

21 owned and controlled by socially and economically disadvantaged 

22 individuals under section 23101(15) of this title; 

23 (B) one or more of the owners of a small business concern is 

24 not a socially disadvantaged individual under section 23101(17) of 

25 this title; or 

26 (C) one or more of the owners of a small business concern is 

27 not a socially and economically disadvantaged individual under 

28 section 23101(16); 

29 (2) graduation under section 23320 of this title; 

30 (3) termination under section 23321 of this title; and 

31 (4) denial of a request to issue a waiver under section 23316(b) of 

32 this title. 

33 (c) DECLINATION OF JURISDICTION.—The administrative law judge se34 lected to preside over a proceeding under this section shall decline to accept 

35 jurisdiction over any matter that— 

36 (1) does not, on its face, allege facts that, if proven to be true, would 

37 warrant reversal or modification of the Administrator’s position; 

38 (2) is untimely filed; 

39 (3) is not filed in accordance with the rules of procedure governing 

40 the proceeding; or 


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1 (4) has been decided by or is the subject of an adjudication before 

2 a court of competent jurisdiction over such matters. 

3 (d) TIMING.—A proceeding under this section shall be completed and a 

4 decision rendered, insofar as practicable, not later than 90 days after a peti5 tion for a hearing is filed with the Office of Hearings and Appeals. 

6 (e) FINAL DECISION.—A decision rendered under this section shall be the 

7 final decision of the Administrator and shall be binding on the Adminis8 trator and persons in the employ of the Administrator. 

9 § 23312. Program participant capability 

10 (a) ELIGIBILITY FOR ASSISTANCE.— 

11 (1) IN GENERAL.—A small business concern shall not be eligible for 

12 assistance under the program unless the Administrator determines that 

13 with contract, financial, technical, and management support, the small 

14 business concern— 

15 (A) will be able to perform contracts that may be awarded to 

16 the small business concern under 23304 of this title; and 

17 (B) has reasonable prospects for success in competing in the 

18 private sector. 

19 (2) PERIOD OF OPERATION.— 

20 (A) IN GENERAL.—The Administrator may prescribe a min21 imum period of time during which a prospective program partici22 pant must be in operation to meet the eligibility requirements of 

23 paragraph (1) only if the Administrator provides a waiver of the 

24 minimum period as provided in subparagraph (B). 

25 (B) WAIVER.—The Administrator shall provide that any re26 quirement that the Administrator establishes regarding the period 

27 of time during which a prospective program participant must have 

28 been in operation may be waived, and that a prospective program 

29 participant that otherwise meets the requirements of paragraph 

30 (1) shall be considered to have demonstrated reasonable prospects 

31 for success, if— 

32 (i) the individual or individuals upon whom eligibility is to 

33 be based have substantial and demonstrated business man34 agement experience; 

35 (ii) the prospective program participant has demonstrated 

36 technical expertise to carry out its business plan with a sub37 stantial likelihood for success; 

38 (iii) the prospective program participant has adequate cap39 ital to carry out its business plan; 

40 (iv) the prospective program participant has a record of 

41 successful performance on contracts from governmental and 


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1 nongovernmental sources in the primary industry category in 

2 which the prospective program participant is seeking certifi3 cation; and 

4 (v) the prospective program participant has, or can dem5 onstrate its ability to timely obtain, the personnel, facilities, 

6 equipment, and any other requirements needed to perform 

7 such contracts. 

8 (b) CAPABILITY.— 

9 (1) CAPABILITY STATEMENTS.— 

10 (A) ANNUAL SUBMISSION.—A program participant shall annu11 ally submit to the Administrator a capability statement. 

12 (B) CONTENTS.—A capability statement shall— 

13 (i) briefly describe the program participant’s various con14 tract performance capabilities; and 

15 (ii) include the name and telephone number of the business 

16 opportunity specialist assigned the program participant. 

17 (C) STATEMENT CATEGORIES.—The Administrator shall cat18 egorize capability statements as— 

19 (i) statements indicating capability primarily dependent on 

20 local contract support; and 

21 (ii) statements indicating capability primarily requiring a 

22 national marketing effort. 

23 (D) DISSEMINATION OF CAPABILITY STATEMENTS.— 

24 (i) LOCAL.—The Administrator shall disseminate capability 

25 statements described in subparagraph (C)(i) to appropriate 

26 contracting activities in the marketing area of each program 

27 participant, respectively. 

28 (ii) NATIONAL.—The Administrator shall disseminate capa29 bility statements described in subparagraph (C)(ii) to the di30 rectors of the offices of small and disadvantaged business uti31 lization for the appropriate Federal agencies, who shall fur32 ther distribute the capability statements to contracting activi33 ties with Federal agencies that may purchase the types of 

34 items or services described in the capability statements. 

35 (2) CONTACT BY CONTRACTING ACTIVITIES.—A contracting activity 

36 that receives a capability statement of a program participant under 

37 paragraph (1)(D) shall, within 60 days after receipt of the capability 

38 statement, contact the business opportunity specialist identified in the 

39 capability statement to indicate the number, type, and approximate dol40 lar value of contract opportunities that the contracting activity may 

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1 priate to consider for award to program participants for which the con2 tracting activity has received capability statements. 

3 (3) FORECAST OF CONTRACT OPPORTUNITIES.— 

4 (A) IN GENERAL.—An executive agency that reports to the Fed5 eral Procurement Data System contract actions with an aggregate 

6 value in excess of $50,000,000 in any fiscal year shall— 

7 (i) prepare a forecast of expected contract opportunities or 

8 classes of contract opportunities for the next and succeeding 

9 fiscal years that program participants are capable of per10 forming; and 

11 (ii) periodically revise the forecast during the following 

12 year. 

13 (B) CONTENTS.—To the extent that the information is avail14 able, a forecast under subparagraph (A) shall specify— 

15 (i) the approximate number of individual contract opportu16 nities (and the number of opportunities within a class); 

17 (ii) the approximate dollar value, or range of dollar values, 

18 for each contract opportunity or class of contract opportuni19 ties; 

20 (iii) the anticipated time (by fiscal year quarter) for the 

21 issuance of a procurement request; and 

22 (iv) the activity responsible for the award and administra23 tion of the contract. 

24 (C) SUBMISSION OF FORECASTS.—Not later than 10 days after 

25 completion of a forecast under subparagraph (A), the head of the 

26 executive agency that prepared the forecast shall submit the fore27 cast to— 

28 (i) the director of the office of small and disadvantaged 

29 business utilization established under section 25109 of this 

30 title for the executive agency; and 

31 (ii) the Administrator. 

32 (D) SCOPE OF INFORMATION REPORTED.—A forecast submitted 

33 under subparagraph (C) may be limited to classes of items and 

34 services for which there are substantial annual purchases. 

35 (E) AVAILABILITY OF FORECASTS.—A forecast submitted under 

36 subparagraph (C) shall be available to small business concerns. 

37 § 23313. Percentages of contract performance by program 

38 participants 

39 (a) IN GENERAL.—A program participant may not be awarded a contract 

40 under the program unless the program participant agrees that— 


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1 (1) in the case of a contract for services (except construction), at 

2 least 50 percent of the cost of contract performance incurred for per3 sonnel shall be expended for employees of the program participant; and 

4 (2) in the case of a contract for procurement of supplies (other than 

5 procurement from a regular dealer in such supplies), the program par6 ticipant will perform work for at least 50 percent of the cost of manu7 facturing the supplies (not including the cost of materials). 

8 (b) CHANGE IN PERCENTAGE.— 

9 (1) IN GENERAL.—The Administrator may change the percentage 

10 under paragraph (1) or (2) of subsection (a) if the Administrator de11 termines that a change is necessary to reflect conventional industry 

12 practices among business concerns that are below the numerical size 

13 standard for businesses in that industry category. 

14 (2) LIMITATION.—A percentage established under paragraph (1) 

15 may not differ from a percentage established under section 25113 of 

16 this title. 

17 (c) OTHER CATEGORIES OF CONTRACT.— 

18 (1) IN GENERAL.—The Administrator shall by regulation establish 

19 requirements similar to those specified in subsection (a) to be applica20 ble to— 

21 (A) contracts for general and specialty construction; and 

22 (B) contracts for any other industry category not otherwise sub23 ject to subsection (a). 

24 (2) APPLICABLE PERCENTAGE.—The percentage applicable to a re25 quirement under paragraph (1) shall be determined in accordance with 

26 subsection (b), except that such a percentage may not differ from a 

27 percentage established under section 25113 of this title for the same 

28 industry category. 

29 § 23314. Wholesalers and retailers 

30 (a) IN GENERAL.—An otherwise responsible program participant that is 

31 described in subsection (b) shall not be denied the opportunity to submit 

32 and have considered its offer for a procurement contract for the supply of 

33 a product to be let under the program or section 25101 of this title solely 

34 because the program participant is other than the manufacturer or proc35 essor of the product to be supplied under the contract. 

36 (b) REQUIREMENTS.—A program participant referred to in subsection (a) 

37 is a program participant that— 

38 (1) is primarily engaged in wholesale or retail trade; 

39 (2) is a small business concern under the numerical size standard 

40 for the North American Industry Classification System code assigned 

41 to the contract solicitation on which the offer is being made; 


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1 (3) is a regular dealer (as defined under section 11 of the Act of 

2 June 30, 1936 (41 U.S.C. 43b) (commonly known as the Walsh-Healey 

3 Act)) in the product to be offered the Government; and 

4 (4) represents that the program participant will supply the product 

5 of a domestic small business manufacturer or processor, unless a waiv6 er of this paragraph is granted— 

7 (A) by the Administrator, after reviewing a determination by 

8 the contracting officer that no small business manufacturer or 

9 processor can reasonably be expected to offer a product meeting 

10 the specifications (including period for performance) required of 

11 an offeror by the solicitation; or 

12 (B) by the Administrator for a product (or class of products), 

13 after determining that no small business manufacturer or proc14 essor is available to participate in the Federal procurement mar15 ket. 

16 § 23315. Reporting by program participants to business op17 portunity specialists 

18 (a) IN GENERAL.—A program participant shall semiannually submit to 

19 its assigned business opportunity specialist a report identifying each agent, 

20 representative, attorney, accountant, consultant, or other person (other than 

21 an employee of the program participant) that received compensation during 

22 the reporting period to assist the program participant in obtaining a Fed23 eral contract. 

24 (b) CONTENTS.—A report under subsection (a) shall— 

25 (1) disclose the amount of compensation received by each person 

26 identified in the report during the reporting period; and 

27 (2) describe the activities performed for the compensation. 

28 (c) REVIEW AND TRANSMITTAL.—The business opportunity specialist 

29 shall promptly— 

30 (1) review the report; and 

31 (2) transmit the report to the Associate Administrator. 

32 (d) SUSPICION OF IMPROPER ACTIVITY.—The Associate Administrator 

33 shall transmit to the Inspector General of the Administration any report 

34 that raises a suspicion of improper activity. 

35 (e) FAILURE TO SUBMIT REPORT.—A failure of a program participant 

36 to submit a report under subsection (a) shall constitute good cause for initi37 ation of a termination proceeding under section 23321(b) of this title. 

38 § 23316. Transfer of ownership or control 

39 (a) IN GENERAL.— 


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1 (1) PERFORMANCE BY CONTRACT AWARDEE.—A contract (including 

2 options) awarded under the program shall be performed by the pro3 gram participant that is initially awarded the contract. 

4 (2) RELINQUISHMENT OF OWNERSHIP OR CONTROL.— 

5 (A) IN GENERAL.—Notwithstanding paragraph (1), if the owner 

6 or owners on whom eligibility for award of the contract was based 

7 relinquish ownership or control of the program participant, or 

8 enter into any agreement to relinquish such ownership or control, 

9 the contract or option shall be terminated for the convenience of 

10 the Government. 

11 (B) NO DAMAGES.—No repurchase costs or other damages may 

12 be assessed against a program participant due solely to the oper13 ation of subparagraph (A). 

14 (b) WAIVER.— 

15 (1) IN GENERAL.—The Administrator may waive subsection (a) only 

16 if— 

17 (A)(i) it is necessary for the owner of the program participant 

18 to surrender partial control of the program participant on a tem19 porary basis to obtain equity financing; and 

20 (ii) the Administrator is requested to waive subsection (a) prior 

21 to the actual transfer of ownership or control; 

22 (B)(i) the procuring agency head certifies that termination of 

23 the contract would severely impair attainment of the procuring 

24 agency’s program objectives or missions; and 

25 (ii) the Administrator is requested to waive subsection (a) prior 

26 to the actual transfer of ownership or control; 

27 (C)(i) ownership and control of the program participant will 

28 pass to another program participant; and 

29 (ii) the acquiring program participant would otherwise be eligi30 ble to receive the award directly under the program; 

31 (D)(i) due to incapacity or death, none of one or more individ32 uals on whom eligibility was based is able to continue to exercise 

33 control of the program participant; and 

34 (ii) the Administrator is requested to waive subsection (a) as 

35 soon as possible after the incapacity or death occurs; or 

36 (E)(i) to raise equity capital, it is necessary for the disadvan37 taged owner of the program participant to transfer ownership of 

38 a majority of the voting stock of the program participant; 

39 (ii) the program participant has exited the program; 


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1 (iii) the disadvantaged owner will maintain ownership of the 

2 largest single outstanding block of voting stock (including stock 

3 held by affiliated persons); and 

4 (iv) the disadvantaged owner will maintain control of daily busi5 ness operations of the program participant. 

6 (2) NONDELEGABILITY.—The authority of the Administrator under 

7 paragraph (1) may not be delegated. 

8 (c) NOTIFICATION OF AGREEMENT TO TRANSFER.—The owner of a pro9 gram participant that is performing a contract awarded under the program 

10 shall notify the Administrator immediately on entering into an oral or writ11 ten agreement to transfer all or part of the stock or other ownership inter12 est in the program participant to any other person. 

13 (d) TREATMENT OF CERTAIN POTENTIAL OWNERSHIP INTERESTS.—Not14 withstanding any other provision of law, for the purposes of determining 

15 ownership and control of a program participant, any potential ownership in16 terest held by an investment company licensed under subtitle III shall be 

17 treated in the same manner as an interest held by the individuals on whom 

18 eligibility is based. 

19 (e) CONTINUED ELIGIBILITY.—A program participant shall remain eligi20 ble for contracts under the program if there is a transfer of ownership and 

21 control to individuals whom the Administrator determines to be socially and 

22 economically disadvantaged. In the event of such a transfer, the transferee 

23 program participant, if not terminated or graduated, shall be eligible for a 

24 period of continued participation in the program for the remainder of the 

25 program participation period of the transferor. 

26 § 23317. Assistance for program participants 

27 (a) IN GENERAL.—The Administrator shall— 

28 (1) assist program participants in developing and maintaining com29 prehensive business plans that specify the program participant’s spe30 cific business targets, objectives, and goals developed and maintained 

31 in conformity with section 23318 of this title; 

32 (2) provide for such other nonfinancial services as the Administrator 

33 considers necessary for the establishment, preservation, and growth of 

34 program participants; 

35 (3) assist program participants in obtaining equity and debt financ36 ing; 

37 (4) establish regular performance monitoring and reporting systems 

38 for program participants to ensure compliance with their business 

39 plans; 

40 (5) analyze and report the causes of success and failure of program 

41 participants; and 


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1 (6) provide assistance necessary to help program participants pro2 cure surety bonds. 

3 (b) NONFINANCIAL SERVICES.—Nonfinancial services provided under 

4 subsection (a)(2) may include— 

5 (1) loan packaging; 

6 (2) financial counseling; 

7 (3) accounting and bookkeeping assistance; 

8 (4) marketing assistance; and 

9 (5) management assistance. 

10 (c) SURETY BONDS.—Assistance provided under subsection (a)(6) may 

11 include— 

12 (1) assistance in the preparation of application forms required to re13 ceive a surety bond; 

14 (2) special management and technical assistance designed to meet 

15 the specific needs of program participants that have received or are ap16 plying for a surety bond; and 

17 (3) preparation of all forms necessary to receive a surety bond guar18 antee under chapter 321. 

19 (d) OUTREACH PROGRAM.— 

20 (1) IN GENERAL.—The Administrator shall develop and implement 

21 an outreach program to inform and recruit small business concerns to 

22 apply for eligibility for assistance under the program. 

23 (2) ACTIVITIES.—The outreach program shall make a sustained and 

24 substantial effort to solicit applications for certification from— 

25 (A) small business concerns located in areas of concentrated un26 employment or underemployment or within labor surplus areas 

27 and within States having relatively few program participants; and 

28 (B) small disadvantaged business concerns in industry cat29 egories that have not substantially participated in the award of 

30 contracts under the program. 

31 § 23318. Business plans 

32 (a) SUBMISSION.—Promptly after certification under section 23325 of 

33 this title, a program participant shall submit a business plan for review by 

34 the business opportunity specialist assigned to assist the program partici35 pant. 

36 (b) FORM; OBJECTIVE.—A business plan— 

37 (1) may be a revision of a preliminary business plan submitted by 

38 the program participant or required by the Administrator as a part of 

39 the application for certification under the program; and 

40 (2) shall be designed to result in the elimination by the program par41 ticipant of the conditions or circumstances on which the Administrator 


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1 determined eligibility under paragraph (8) or (16) of section 23101 of 

2 this title. 

3 (c) APPROVAL OF BUSINESS PLAN AS CONDITION ON CONTRACT

4 AWARD.—Prior approval of a business plan by the business opportunity spe5 cialist, and of subsequent modifications submitted under subsection (e), 

6 shall be a condition on the eligibility of a program participant for award 

7 of a contract under the program. 

8 (d) CONTENTS.—A business plan shall include— 

9 (1) an analysis of market potential, competitive environment, and 

10 other business analyses estimating the program participant’s prospects 

11 for profitable operations during the term of program participation and 

12 after graduation; 

13 (2) an analysis of the program participant’s strengths and weak14 nesses, with particular attention to correcting any financial, manage15 rial, technical, or personnel conditions that are likely to impede the pro16 gram participant in receiving contracts other than contracts awarded 

17 under the program; 

18 (3) specific targets, objectives, and goals for the business develop19 ment of the program participant during the next and succeeding years 

20 using the results of the analyses conducted under paragraphs (1) and 

21 (2); 

22 (4) a transition management plan outlining specific steps to ensure 

23 profitable business operations after graduation (to be incorporated into 

24 the program participant’s plan during the first year of the transitional 

25 stage of program participation); and 

26 (5) estimates of contract awards under the program and from other 

27 sources that the program participant will require to meet the specific 

28 targets, objectives, and goals for the years covered by the business 

29 plan, which estimates shall be consistent with section 23328 of this 

30 title and other applicable provisions of this chapter. 

31 (e) ANNUAL REVIEW.— 

32 (1) IN GENERAL.—A program participant shall annually review its 

33 currently approved business plan with its business opportunity spe34 cialist and modify the business plan as appropriate. 

35 (2) APPROVAL.— 

36 (A) SUBMISSION.—A modified business plan shall be submitted 

37 to the Administrator for approval. 

38 (B) CONTINUED VALIDITY OF CURRENT PLAN.—The currently 

39 approved business plan shall be valid until such time as a modified 

40 business plan is approved by the business opportunity specialist. 


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1 (3) TRANSITIONAL STAGE.—Annual reviews pertaining to years in 

2 the transitional stage of program participation shall require, as appro3 priate, a written verification that the program participant has complied 

4 with the requirements of section 23328 of this title relating to attain5 ing business activity from sources other than contracts awarded under 

6 the program. 

7 (f) ANNUAL NEEDS FORECAST.— 

8 (1) IN GENERAL.—During the review of its plan conducted under 

9 subsection (e), a program participant shall annually forecast its needs 

10 for contract awards under the program for the next program year and 

11 the succeeding program year. 

12 (2) INCLUSION IN BUSINESS PLAN.—An annual needs forecast shall 

13 be included in a program participant’s business plan. 

14 (3) CONTENTS.—An annual needs forecast shall include— 

15 (A) the aggregate dollar value of contract support to be sought 

16 on a noncompetitive basis under the program, reflecting compli17 ance with the requirements of section 23328 of this title relating 

18 to attaining business activity from sources other than contracts 

19 awarded under the program; 

20 (B) the types of contract opportunities being sought, identified 

21 by North American Industry Classification System code or other22 wise; 

23 (C) an estimate of the dollar value of contract support to be 

24 sought on a competitive basis; and 

25 (D) such other information the business opportunity specialist 

26 may request to provide effective business development assistance 

27 to the program participant. 

28 (g) LOGICAL BUSINESS PROGRESSION.—Limitations established by the 

29 Administrator restricting the award of contracts under the program to a 

30 limited number of North American Industry Classification System codes in 

31 an approved business plan shall not be applied in a manner that inhibits 

32 the logical business progression by a program participant into areas of in33 dustrial endeavor in which the program participant has potential for suc34 cess. 

35 § 23319. Denial of further assistance 

36 (a) IN GENERAL.—A program participant shall be denied any assistance 

37 under the program if the program participant— 

38 (1) voluntarily elects not to continue participation; 

39 (2) completes its program participation period; 

40 (3) is graduated; or 

41 (4) is terminated. 


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1 (b) NO SUBSEQUENT RECERTIFICATION.—If participation in the program 

2 by a program participant is concluded for any of the reasons described in 

3 subsection (a), the former program participant shall not subsequently be re4 certified for participation in the program. 

5 § 23320. Graduation 

6 A program participant shall be graduated from the program— 

7 (1) when a program participant successfully completes the program 

8 by substantially achieving the targets, objectives, and goals contained 

9 in the program participant’s business plan, thereby demonstrating the 

10 ability of the program participant to compete in the marketplace with11 out assistance under the program; or 

12 (2) if, in a review of economic disadvantage under section 23310(a) 

13 of this title, the Administrator determines that the program participant 

14 and its disadvantaged owners are no longer economically disadvan15 taged. 

16 § 23321. Termination 

17 (a) BASIS FOR TERMINATION.— 

18 (1) IN GENERAL.—Termination from the program shall be based on 

19 good cause. 

20 (2) GOOD CAUSE.—For purposes of paragraph (1), good cause in21 cludes— 

22 (A) the failure of a program participant to maintain eligibility 

23 for program participation; 

24 (B) the failure of a program participant to engage in business 

25 practices that will promote its competitiveness within a reasonable 

26 period of time as evidenced by, among other indicators, a pattern 

27 of unjustified delinquent performance or terminations for default 

28 with respect to contracts awarded under the program; 

29 (C) a demonstrated pattern of failing to make required submis30 sions or responses to the Administrator in a timely manner; 

31 (D) the willful violation of any regulation of the Administrator 

32 pertaining to a material issue; 

33 (E) the debarment of a program participant or its disadvan34 taged owners by any agency under subpart 9.4 of title 48, Code 

35 of Federal Regulations (or any successor regulation); and 

36 (F) the conviction of the disadvantaged owner or an officer of 

37 a program participant for an offense indicating a lack of business 

38 integrity (including a conviction for embezzlement, theft, forgery, 

39 bribery, falsification, or violation of chapter 105). 

40 (3) TERMINATION FOR CONVICTION.—For purposes of paragraph 

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1 advantaged owner of a program participant solely because of the con2 viction of an officer of the program participant (who is not a disadvan3 taged owner) unless the disadvantaged owner conspired with, abetted, 

4 or otherwise knowingly acquiesced in the activity or omission that was 

5 the basis of the officer’s conviction. 

6 (b) PROCEDURE.— 

7 (1) INITIATION OF PROCEEDING.—The Director may initiate a termi8 nation proceeding by recommending a termination proceeding to the 

9 Associate Administrator. 

10 (2) NOTICE OF INTENT TO TERMINATE.—If the Associate Adminis11 trator determines that termination is appropriate, the Associate Admin12 istrator shall, not later than 15 days after making the determination, 

13 provide the program participant written notice of intent to terminate, 

14 specifying the reasons for the termination. 

15 § 23322. Evaluation of eligibility 

16 (a) IN GENERAL.—The Administrator shall conduct an evaluation of a 

17 program participant’s eligibility for continued participation in the program 

18 whenever the Administrator receives specific and credible information alleg19 ing that the program participant no longer meets the requirements for pro20 gram eligibility. 

21 (b) TERMINATION PROCEEDING.—On making a finding that a program 

22 participant is no longer eligible, the Administrator shall initiate a termi23 nation proceeding under section 23321 of this title. 

24 (c) SUSPENSION.—A program participant’s eligibility for award of a con25 tract under the program may be suspended under subpart 9.4 of title 48, 

26 Code of Federal Regulations (or any successor regulation). 

27 § 23323. Limitation of eligibility to one small business con28 cern 

29 (a) DETERMINATION OF SOCIAL AND ECONOMIC DISADVANTAGE.—Ex30 cept as provided in subsection (c), an individual who was determined to be 

31 socially and economically disadvantaged before August 15, 1989, shall not 

32 be permitted to assert such disadvantage with respect to any other concern 

33 making application for certification as a small business concern owned and 

34 controlled by socially and economically disadvantaged individuals. 

35 (b) ELIGIBILITY AS A SOCIALLY AND ECONOMICALLY DISADVANTAGED

36 SMALL BUSINESS CONCERN.—Except as provided in subsection (c), an indi37 vidual on whom eligibility as a small business concern owned and controlled 

38 by socially and economically disadvantaged individuals is based under sec39 tion 23101(15) of this title shall be permitted to assert such eligibility for 

40 only one small business concern. 


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1 (c) EXCEPTION.—An economically disadvantaged Indian tribe may own 

2 more than one small business concern eligible for assistance under the pro3 gram if— 

4 (1) the Indian tribe does not own another concern in the same indus5 try that has been determined to be eligible to receive contracts under 

6 the program; and 

7 (2) the individuals responsible for the management and daily oper8 ations of the concern do not manage more than 2 program partici9 pants. 

10 § 23324. Limitation on denial of admission into program 

11 based on unavailability of specific contract oppor12 tunities 

13 An applicant shall not be denied admission into the program based solely 

14 on a determination that specific contract opportunities are unavailable to as15 sist in the development of the applicant unless— 

16 (1) the Government has not previously procured and is unlikely to 

17 procure the types of products or services offered by the applicant; or 

18 (2) the purchases of such products or services by the Government 

19 will not be in quantities sufficient to support the developmental needs 

20 of the applicant and other program participants providing the same or 

21 similar products or services. 

22 § 23325. Certification decision 

23 Not later than 90 days after receipt of a completed application for pro24 gram certification, the Associate Administrator shall— 

25 (1) certify a small business concern as a program participant; or 

26 (2) deny the application. 

27 § 23326. Review of new entrants into the program 

28 (a) REVIEW.—Thirty days before the conclusion of each fiscal year, the 

29 Director shall review all small business concerns that have been admitted 

30 into the program during the preceding 12-month period. 

31 (b) DETERMINATION AND ESTIMATE.—In a review under subsection (a), 

32 the Director shall— 

33 (1) determine the number of entrants and their geographic distribu34 tion and industrial classification; and 

35 (2) estimate— 

36 (A) the expected growth of the program during the next fiscal 

37 year; and 

38 (B) the number of additional business opportunity specialists, if 

39 any, that will be needed to meet the anticipated demand for the 

40 program. 


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1 (c) REPORT.—Not later than September 30 of each year, the Director 

2 shall report to the Associate Administrator the determination and estimates 

3 made under subsection (b). 

4 (d) DIRECTIVES.— 

5 (1) IN GENERAL.—Based on the report under subsection (c) and 

6 such additional data as are relevant, the Associate Administrator shall, 

7 not later than October 31 of each fiscal year, issue policy and program 

8 directives applicable to the fiscal year that— 

9 (A) establish priorities for the solicitation of program applica10 tions from underrepresented regions and industry categories; 

11 (B) assign staffing levels and allocate other program resources 

12 as necessary to meet program needs; and 

13 (C) establish priorities in the processing and admission of new 

14 program participants as necessary to achieve an equitable geo15 graphic distribution of small business concerns and a distribution 

16 of concerns across all industry categories in proportions needed to 

17 increase significantly contract awards to small business concerns 

18 owned and controlled by socially and economically disadvantaged 

19 individuals. 

20 (2) CONSIDERATIONS.—In considering an increase described in para21 graph (1)(C), the Associate Administrator shall give due consideration 

22 to industrial categories in which Federal purchases have been substan23 tial but in which the participation rate of small business concerns 

24 owned and controlled by socially and economically disadvantaged indi25 viduals has been limited. 

26 § 23327. Program stages 

27 (a) IN GENERAL.—The Administrator shall segment a program partici28 pant’s participation in the program into a developmental stage and a transi29 tional stage. 

30 (b) DEVELOPMENTAL STAGE.—The developmental stage of program par31 ticipation shall be designed to assist a program participant in its effort to 

32 overcome its economic disadvantage by providing such assistance as is nec33 essary and appropriate to access markets and strengthen its financial and 

34 managerial skills. 

35 (c) TRANSITIONAL STAGE.—The transitional stage of program participa36 tion shall be designed to overcome, insofar as practicable, the remaining ele37 ments of economic disadvantage and to prepare a program participant for 

38 graduation from the program. 

39 (d) AVAILABLE ASSISTANCE.— 

40 (1) IN GENERAL.—A program participant, if otherwise eligible, shall 

41 be qualified to receive assistance as provided in this subsection. 


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1 (2) CONTRACT SUPPORT.—A program participant in the develop2 mental stage or transitional stage shall be qualified to receive contract 

3 support under the program. 

4 (3) FINANCIAL ASSISTANCE.—A program participant in the develop5 mental stage or transitional stage shall be qualified to receive financial 

6 assistance under section 20511 of this title. 

7 (4) EMPLOYEE SKILLS TRAINING OR UPGRADING.— 

8 (A) DEFINITION OF TRAINING PROVIDER.—In this paragraph, 

9 the term ‘‘training provider’’ means an institution of higher edu10 cation, a community or vocational college, or an institution eligible 

11 to provide skills training or upgrading under title I of the Work12 force Investment Act of 1998 (29 U.S.C. 2801 et seq.). 

13 (B) IN GENERAL.—A program participant in the developmental 

14 stage shall be qualified to receive financial assistance under which 

15 the Administrator may, without regard to section 10331(l) of this 

16 title, purchase in whole or in part, on behalf of the program par17 ticipant, skills training or upgrading for employees or potential 

18 employees of the program participant. 

19 (C) FORM OF ASSISTANCE.—Financial assistance under sub20 paragraph (B) may be made— 

21 (i) by direct payment to the training provider; or 

22 (ii) by reimbursing the program participant or the program 

23 participant’s employee, if the Administrator considers reim24 bursement to be reasonable and appropriate. 

25 (D) LIMITATION.—Financial assistance under subparagraph (B) 

26 shall not be granted to a program participant unless the program 

27 participant first documents that the program participant has ex28 plored the use of existing cost-free or cost-subsidized training pro29 grams offered by public and private sector agencies working with 

30 programs of employment and training and economic development. 

31 (E) NUMBER OF EMPLOYEES.—Not more than 5 employees or 

32 potential employees of the program participant are recipients of 

33 skills training or upgrading under subparagraph (B) at any one 

34 time. 

35 (F) AMOUNT.—Not more than $2,500 shall be made available 

36 for any one employee or potential employee for skills training or 

37 upgrading under subparagraph (B). 

38 (G) LENGTH OF TRAINING OR UPGRADING.—The length of 

39 training or upgrading financed under subparagraph (B) shall be 

40 not less than one nor more than 6 months. 

41 (H) LENGTH OF EMPLOYMENT.— 


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1 (i) ASSURANCES.—Financial assistance under subpara2 graph (B) shall not be granted to a program participant un3 less— 

4 (I) the program participant has given adequate assur5 ance that it will employ the trainee or upgraded em6 ployee for a period of at least 6 months after the train7 ing or upgrading financed under subparagraph (B) has 

8 been completed; and 

9 (II) each trainee or upgraded employee has given a 

10 similar assurance to remain within the employ of the 

11 program participant for that period. 

12 (ii) BREACH.—If a program participant, trainee, or up13 graded employee fails to fulfill the assurance under clause 

14 (i)— 

15 (I) the Administrator shall be entitled to, and shall 

16 make diligent efforts to obtain from the violating pro17 gram participant, trainee, or upgraded employee, the re18 payment of all funds expended on behalf of the program 

19 participant, trainee, or upgraded employee; 

20 (II) such repayment shall be made to the Adminis21 trator with such interest and costs of collection as are 

22 reasonable; and 

23 (III) the program participant, trainee, or upgraded 

24 employee shall be barred from receiving any further as25 sistance under subparagraph (B). 

26 (I) LOCATION.—Training or upgrading financed under subpara27 graph (B) may take place at a facility of the program participant 

28 or of the training provider. 

29 (J) RECORDS.—A program participant that receives assistance 

30 under subparagraph (B) shall maintain such records as the Ad31 ministrator considers appropriate to ensure that this subsection 

32 and any other applicable law have not been violated. 

33 (K) REGULATIONS.—The Administrator shall, in consultation 

34 with the Secretary of Labor, promulgate regulations to implement 

35 this paragraph that establish acceptable training and upgrading 

36 performance standards and provide for such monitoring or audit 

37 requirements as are necessary to ensure the integrity of the train38 ing effort. 

39 (5) TECHNOLOGY AND SURPLUS PROPERTY TRANSFER.— 


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1 (A) IN GENERAL.—A program participant in the developmental 

2 stage or transitional stage shall be qualified to receive the transfer 

3 of technology or surplus property owned by the United States. 

4 (B) EFFECTUATION.—Activities designed to effect transfers 

5 under subparagraph (A)— 

6 (i) shall be developed in cooperation with the heads of Fed7 eral agencies; and 

8 (ii) shall include the transfer by grant, license, or sale of 

9 technology or property to program participants. 

10 (C) PRIORITY.—Property under subparagraph (A) may be 

11 transferred to program participants on a priority basis. 

12 (D) USE.—Technology or property transferred under subpara13 graph (A)— 

14 (i) shall be used by a program participant during the nor15 mal conduct of its business operation; and 

16 (ii) shall not be sold or transferred to any other person 

17 (other than the Government) until one year after the program 

18 participant’s term of participation. 

19 (6) TRAINING IN THE DEVELOPMENT OF BUSINESS PRINCIPLES AND

20 STRATEGIES.—A program participant in the developmental stage or 

21 transitional stage shall be qualified to receive training assistance under 

22 which the Administrator shall conduct training sessions to assist pro23 gram participants in the development of business principles and strate24 gies to enhance their ability to compete successfully for contracts in the 

25 marketplace. 

26 (7) PARTICIPATION IN JOINT VENTURES, LEADER-FOLLOWER AR27 RANGEMENTS, AND TEAMING AGREEMENTS.— 

28 (A) IN GENERAL.—A program participant in the transitional 

29 stage shall be qualified to participate in joint ventures, leader-fol30 lower arrangements, and teaming agreements between the pro31 gram participant and other program participants and other busi32 ness concerns with respect to contracting opportunities for the re33 search, development, full-scale engineering, or production of major 

34 systems. 

35 (B) AGENCY PROGRAMS.—Activities under subparagraph (A) 

36 shall be undertaken on the basis of programs developed by the 

37 Federal agency responsible for the procurement of the major sys38 tem, with the assistance of the Administrator. 

39 (8) BUSINESS PLANNING TRAINING AND TECHNICAL ASSISTANCE.— 

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1 ceive transitional management business planning training and technical 

2 assistance. 

3 § 23328. Attainment of business activity targets 

4 (a) DEVELOPMENTAL STAGE.—During the developmental stage of partici5 pation in the program, a program participant shall take all reasonable ef6 forts within its control to attain the business activity targets contained in 

7 its business plan. Those efforts shall be made a part of the business plan 

8 and shall be sufficient in scope and duration to satisfy the Administrator 

9 that the program participant will engage a reasonable marketing strategy 

10 that will maximize its potential to attain its business activity targets. 

11 (b) TRANSITIONAL STAGE.— 

12 (1) IN GENERAL.—During the transitional stage of participation in 

13 the program, a program participant shall be subject to regulations re14 garding business activity targets that are promulgated by the Adminis15 trator. 

16 (2) ESTABLISHMENT OF BUSINESS ACTIVITY TARGETS.—The regula17 tions under paragraph (1) shall establish business activity targets ap18 plicable to program participants during the fifth year and each suc19 ceeding year of program participation. The business activity targets, 

20 for that period of time, shall reflect a reasonably consistent increase 

21 in contracts awarded other than under the program, expressed as a 

22 percentage of total sales. 

23 (3) ATTAINMENT.—The regulations under paragraph (1) shall re24 quire a program participant to attain its business activity targets. 

25 (4) CERTIFICATION OF COMPLIANCE.—The regulations under para26 graph (1) shall provide that, before the receipt of any contract to be 

27 awarded under the program, the program participant (if it is in the 

28 transitional stage) shall certify that it— 

29 (A) has complied with the regulations; or 

30 (B) is in compliance with such remedial measures as have been 

31 ordered under regulations promulgated under paragraph (6). 

32 (5) PERFORMANCE REVIEW.—The regulations under paragraph (1) 

33 shall require the Administrator to review a program participant’s per34 formance regarding attainment of business activity targets during peri35 odic reviews of the program participant’s business plan. 

36 (6) REMEDIAL MEASURES.— 

37 (A) IN GENERAL.—The regulations under paragraph (1) shall 

38 authorize the Administrator to take appropriate remedial measures 

39 with respect to a program participant that fails to attain a re40 quired business activity target for the purpose of reducing the proVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00173 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 gram participant’s dependence on contracts awarded under the 

2 program. 

3 (B) MEASURES.—Remedial measures may include— 

4 (i) assisting the program participant in expanding the dol5 lar volume of its competitive business activity; and 

6 (ii) limiting the dollar volume of contracts awarded to the 

7 program participant under the program. 

8 (C) NONREVIEWABILITY.—Except for a remedial measure that 

9 would constitute a termination, a remedial measure taken under 

10 this paragraph shall not be reviewable under section 23311 of this 

11 title. 

12 § 23329. Program participation period 

13 A program participant may receive assistance under the program for a 

14 total period of not longer than 9 years, measured from the date of its cer15 tification under section 23325 of this title, of which— 

16 (1) not more than 4 years may be spent in the developmental stage 

17 of program participation; and 

18 (2) not more than 5 years may be spent in the transitional stage of 

19 program participation. 

20 § 23330. Collection of data on program operations 

21 The Administrator shall develop and implement a process for the system22 atic collection of data on the operations of the program. 

23 § 23331. Approval of contract options and modifications 

24 The Administrator shall make substantial and sustained efforts to achieve 

25 a maximum 10-day period as the average processing time for approving op26 tions and modifications to contracts awarded under the program and sub27 mitted to the Administrator for approval. 

28 § 23332. Orderly and efficient management of program 

29 The Administrator shall, to the maximum extent practicable, minimize 

30 delay, eliminate excess regulation, and require only such paperwork as is 

31 necessary to effect the orderly and efficient management of the program 

32 and the award of contracts under the program. 

33 § 23333. Participation in federally funded programs and 

34 projects 

35 (a) IN GENERAL.—A small business concern that is certified, or otherwise 

36 meets the criteria for participation in any program under the program, shall 

37 not be required by any State or political subdivision of a State to meet addi38 tional criteria or certification, unrelated to the capability to provide the re39 quested product or service, to participate as a small business concern owned 

40 and controlled by socially and economically disadvantaged individuals in any 


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1 program or project that is funded, in whole or in part, by the Federal Gov2 ernment. 

3 (b) NOTICE OF PARTICIPATION BY THE SECRETARY OF TRANSPOR4 TATION.—The Secretary of Transportation shall notify each State or polit5 ical subdivision of a State to which the Secretary of Transportation awards 

6 a grant or other Federal funds of the criteria for participation by a small 

7 business concern owned and controlled by socially and economically dis8 advantaged individuals in any program or project that is funded, in whole 

9 or in part, by the Federal Government. 

10 CHAPTER 235—TECHNICAL AND MANAGEMENT 

11 ASSISTANCE 

Sec. 

23501. Financial assistance for projects providing technical or management assistance. 

23502. Eligible projects. 

23503. Location of service. 

12 § 23501. Financial assistance for projects providing tech13 nical or management assistance 

14 (a) IN GENERAL.—The Administrator shall provide financial assistance to 

15 public or private organizations to pay all or part of the cost of projects de16 signed to provide technical or management assistance to program partici17 pants, with special attention to small business concerns located in areas 

18 with high proportions of unemployed or low-income individuals. 

19 (b) FORM OF ASSISTANCE.—The financial assistance authorized for 

20 projects under this chapter includes assistance advanced by grant, agree21 ment, or contract. 

22 (c) PAYMENT.—The Administrator may make payments under a grant or 

23 contract under this chapter in lump sum or installments, and in advance 

24 or by way of reimbursement, and in the case of grants, with necessary ad25 justments on account of overpayments or underpayments. 

26 § 23502. Eligible projects 

27 (a) IN GENERAL.—Financial assistance under this chapter may be pro28 vided for projects, including projects for— 

29 (1) planning and research, including feasibility studies and market 

30 research; 

31 (2) the identification and development of new business opportunities; 

32 (3) the furnishing of centralized services with regard to public serv33 ices and Federal Government programs including the programs author34 ized under this division and section 20511 of this title; 

35 (4) the establishment and strengthening of business service agencies, 

36 including trade associations and cooperatives; and 

37 (5) the furnishing of business counseling, management training, and 

38 legal and other related services, with special emphasis on the developVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00175 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 ment of management training programs using the resources of the 

2 business community (including the development of management train3 ing opportunities in existing business) and with emphasis in all cases 

4 on providing management training of sufficient scope and duration to 

5 develop entrepreneurial and managerial self-sufficiency on the part of 

6 the individuals served. 

7 (b) PREFERENCE.—The Administrator shall give preference to projects 

8 that promote the ownership, participation in ownership, or management of 

9 small business concerns owned by program participants. 

10 § 23503. Location of service 

11 To the extent feasible, service under this chapter shall be provided in a 

12 location that is easily accessible to the program participants served. 

13 DIVISION F—PROCUREMENT ASSISTANCE 

14 CHAPTER 241—GENERAL PROVISIONS 

Sec. 

24101. Definition of executive agency. 

24102. Authority. 

24103. Technical, managerial, and informational aids. 

24104. Inventory of productive facilities. 

24105. Utilization of productive capacity. 

24106. Subcontracting to small business concerns. 

24107. Size certification. 

24108. Responsibility certification. 

24109. Information pertaining to Federal procurement or production. 

24110. Information pertaining to disposal of Federal property. 

24111. Information pertaining to supplies of materials. 

24112. Fair proportions of business for small business concerns. 

24113. Fair and reasonable treatment of small business concerns. 

24114. Information and assistance pertaining to federally aided urban renewal projects. 

24115. Dissemination of information by the Administrator. 

24116. Availability of information from Federal agencies. 

24117. Adjustment of regulations and programs to the needs of small business concerns. 

24118. Outreach programs for disabled veterans, veterans, and reservists. 

15 § 24101. Definition of executive agency 

16 In this division, the term ’’executive agency’’ has the meaning given the 

17 term in section 4 of the Office of Federal Procurement Policy Act (41 

18 U.S.C. 403). 

19 § 24102. Authority 

20 The Administrator shall take an action under this chapter when the Ad21 ministrator determines that the action is necessary. 

22 § 24103. Technical, managerial, and informational aids 

23 (a) IN GENERAL.— 

24 (1) ACTIVITIES.—The Administrator shall provide technical, manage25 rial, and informational aids to small business concerns— 

26 (A) by advising and counseling on matters in connection with 

27 Government procurement and policies, principles, and practices of 

28 good management; 

29 (B) by cooperating and advising with— 


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1 (i) voluntary business, professional, educational, and other 

2 nonprofit organizations, associations, and institutions; and 

3 (ii) other Federal and State agencies; 

4 (C) by maintaining a clearinghouse for information on man5 aging, financing, and operating small business concerns; and 

6 (D) by disseminating such information, including through rec7 ognition events, and by other activities that the Administration de8 termines to be appropriate. 

9 (2) NO ENDORSEMENT; APPROPRIATE RECOGNITION.—In cooper10 ating and advising with an entity under paragraph (1)(B)(i), the Ad11 ministrator shall take such actions as the Administrator determines to 

12 be necessary to ensure that— 

13 (A) the cooperation does not constitute or imply an endorsement 

14 by the Administrator of the entity or its products or services; and 

15 (B) the Administration receives appropriate recognition in all 

16 printed material. 

17 (3) FOR-PROFIT CONCERNS.—The Administrator may provide tech18 nical, managerial, and informational aids to small business concerns 

19 through cooperation with a for-profit concern (referred to in this para20 graph as a ‘‘cosponsor’’) if the Administrator— 

21 (A) takes such action as the Administrator determines to be ap22 propriate to ensure that— 

23 (i) the Administration receives appropriate recognition and 

24 publicity; 

25 (ii) the cooperation does not constitute or imply an en26 dorsement by the Administrator of any product or service of 

27 the cosponsor; 

28 (iii) unnecessary promotion of the products or services of 

29 the cosponsor is avoided; and 

30 (iv) the use of any one cosponsor in a marketing area is 

31 minimized; and 

32 (B) develops an agreement, executed on behalf of the Adminis33 trator by an employee of the Administration in Washington, the 

34 District of Columbia, that, at a minimum— 

35 (i) specifies the terms and conditions of the cooperation; 

36 and 

37 (ii) provides that— 

38 (I) any printed material to announce the cosponsor39 ship or to be distributed at the cosponsored activity shall 

40 be approved in advance by the Administrator; 


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1 (II) only minimal charges may be imposed on any 

2 small business concern to cover the direct costs of pro3 viding the assistance; 

4 (III) the Administrator may provide to the cosponsor 

5 mailing labels but not lists of names and addresses of 

6 small business concerns compiled by the Administrator; 

7 (IV) all printed materials containing the names of 

8 both the Administration and the cosponsor shall include 

9 a prominent disclaimer that the cooperation does not 

10 constitute or imply an endorsement by the Administrator 

11 of any product or service of the cosponsor; and 

12 (V) the Administration shall receive appropriate rec13 ognition in all cosponsorship printed materials. 

14 (b) VOLUNTEER PROGRAMS.— 

15 (1) IN GENERAL.—In carrying out this section, the Administrator 

16 shall establish, conduct, and publicize, and recruit, select, and train vol17 unteers for, and enter into contracts, grants, or cooperative agreements 

18 for, volunteer programs, including SCORE and an Active Corps of Ex19 ecutives for the purposes of subsection (a). 

20 (2) STAFF.—To facilitate the implementation of the volunteer pro21 grams, the Administrator shall, to the extent and in such amounts as 

22 are provided in advance in appropriation Acts, maintain at Administra23 tion headquarters, and pay the salaries, benefits, and expenses of, a 

24 volunteer and professional staff to manage and oversee the volunteer 

25 programs. 

26 (3) CONTRIBUTIONS.—Notwithstanding any other provision of law, 

27 SCORE may— 

28 (A) solicit cash and in-kind contributions from the private sec29 tor to be used to carry out its functions under this subtitle; and 

30 (B) use payments made by the Administrator under this sub31 section for such solicitation and management of the contributions 

32 received. 

33 (c) USE OF ADMINISTRATION FACILITIES.—The Administrator shall 

34 allow any individual or group of persons participating with the Adminis35 trator in furtherance of this section to use such of the Administration’s of36 fice facilities and related material and services (including clerical and steno37 graphic services) as the Administrator considers appropriate. 

38 (d) VOLUNTEERS DEEMED TO BE FEDERAL EMPLOYEES FOR FEDERAL

39 TORT CLAIMS PURPOSES.—A volunteer, while carrying out an activity 

40 under this section, shall be deemed to be a Federal employee for purposes 

41 of chapter 171 of title 28. 


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1 (e) VOLUNTEERS DEEMED TO BE CIVIL EMPLOYEES FOR WORK INJURY

2 COMPENSATION PURPOSES.—A volunteer, while carrying out an activity 

3 under this section, shall, for purposes of subchapter I of chapter 81 of title 

4 5 (relative to compensation to Federal employees for work injuries), be 

5 deemed to be a civil employee of the United States within the meaning of 

6 the term ‘‘employee’’ as defined in section 8101 of title 5, and that sub7 chapter shall apply except that in computing compensation benefits for dis8 ability or death, the monthly pay of a volunteer shall be deemed to be that 

9 received under the entrance salary for a grade GS–11 employee. 

10 (f) REIMBURSEMENT OF VOLUNTEERS.— 

11 (1) IN GENERAL.—The Administrator may reimburse a volunteer 

12 carrying out an activity under this section for— 

13 (A) all necessary out-of-pocket expenses incident to the volun14 teer’s provision of services under this subtitle, or in connection 

15 with attendance at a meeting sponsored by the Administration; 

16 (B) the cost of malpractice insurance, as the Administrator 

17 shall determine, in accordance with regulations that the Adminis18 trator shall prescribe; and 

19 (C) travel expenses (including per diem in lieu of subsistence) 

20 as authorized by section 5703 of title 5 for individuals serving 

21 without pay, while the volunteer is carrying out such an activity 

22 away from the volunteer’s home or regular place of business. 

23 (2) TREATMENT OF PAYMENTS.—Notwithstanding any other provi24 sion of law, no payment for supportive services or reimbursement of 

25 out-of-pocket expenses made to a volunteer serving under this section 

26 shall be subject to any tax or charge or be treated as wages or com27 pensation for the purposes of unemployment, disability, retirement, 

28 public assistance, or similar benefit payments, or minimum wage laws. 

29 (g) LIMITATION ON PROVISION OF SERVICES TO PERSONS WITH A DE30 LINQUENT LOAN.—A volunteer carrying out an activity under this section 

31 shall not provide any service to a person with a loan under this subtitle that 

32 is delinquent except on a specific request for assistance signed by the person 

33 in connection with the delinquency. 

34 (h) GRANTS FOR BUSINESS COUNSELING AND ASSISTANCE.— 

35 (1) IN GENERAL.—In carrying out this section, the Administrator 

36 may make a grant to, or enter into a contract or cooperative agreement 

37 with, a public or private institution of higher education for the estab38 lishment and operation of a small business institute, which shall be 

39 used to provide business counseling and assistance to small business 

40 concerns through the activities of students enrolled at the institution. 


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1 (2) EDUCATIONAL CREDITS.—A student engaged in an activity fund2 ed under paragraph (1) shall be entitled to receive educational credit 

3 for the activity. 

4 (i) PAYMENT OF EXPENSES IN JUDICIAL OR ADMINISTRATIVE PRO5 CEEDINGS.—Notwithstanding any other provision of law and in accordance 

6 with regulations that the Administrator shall prescribe, in a judicial or ad7 ministrative proceeding arising directly out of the performance of an activity 

8 under this section to which a volunteer is made a party, the Administrator 

9 may employ counsel and pay counsel fees, court costs, bail, and other ex10 penses incidental to the defense of the volunteer. 

11 § 24104. Inventory of productive facilities 

12 (a) IN GENERAL.—The Administrator shall— 

13 (1) make a complete inventory of all productive facilities of small 

14 business concerns; or 

15 (2) arrange for such an inventory to be made by any other govern16 mental agency that has the facilities. 

17 (b) INFORMATION FROM STATE AGENCIES.—In making an inventory 

18 under subsection (a), the Administrator or other governmental agency may 

19 request an appropriate agency of a State to furnish an inventory of the pro20 ductive facilities of small business concerns in the State if such an inventory 

21 is available or in prospect. 

22 § 24105. Utilization of productive capacity 

23 The Administrator shall— 

24 (1) coordinate and ascertain the means by which the productive ca25 pacity of small business concerns can be most effectively utilized; and 

26 (2) consult and cooperate with officers of the Government having 

27 procurement or property disposal powers, in order to utilize the poten28 tial productive capacity of plants operated by small business concerns. 

29 § 24106. Subcontracting to small business concerns 

30 The Administrator shall— 

31 (1) obtain information concerning methods and practices that Gov32 ernment prime contractors utilize in letting subcontracts; and 

33 (2) take action to encourage the letting of subcontracts by prime 

34 contractors to small business concerns at prices and on terms and con35 ditions that are fair and equitable. 

36 § 24107. Size certification 

37 (a) IN GENERAL.—The Administrator shall determine within any indus38 try the concerns that qualify as a small business concern for purposes of 

39 this subtitle. 

40 (b) ISSUANCE OF CERTIFICATE.—When requested to do so, the Adminis41 trator shall issue a certificate certifying a concern as a small business conVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00180 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 cern in accordance with the criteria stated in this subtitle and section 10101 

2 of this title. 

3 (c) REVOCATION OF CERTIFICATE.—A certificate issued under subsection 

4 (b) shall be subject to revocation when the concern covered by the certificate 

5 ceases to qualify as a small business concern. 

6 (d) CONCLUSIVE DETERMINATION.—An officer of the Government having 

7 procurement or lending power, or engaging in the disposal of Federal prop8 erty or allocating materials or supplies, or promulgating regulations affect9 ing the distribution of materials or supplies, shall accept as conclusive the 

10 Administrator’s determination whether a concern qualifies as a small busi11 ness concern. 

12 § 24108. Responsibility certification 

13 (a) DEFINITIONS.—In this section: 

14 (1) CONTRACTING OFFICER.—The term ‘‘contracting officer’’ 

15 means— 

16 (A) a contracting officer; and 

17 (B) any other officer engaged in the sale and disposal of Fed18 eral property. 

19 (2) RESPONSIBILITY.—The term ‘‘responsibility’’ includes capability, 

20 competency, capacity, credit, integrity, perseverance, and tenacity. 

21 (b) CERTIFICATION.—The Administrator shall certify to a contracting of22 ficer with respect to all elements of the responsibility of a small business 

23 concern or group of small business concerns to receive and perform a spe24 cific Government contract. 

25 (c) NO PRECLUSION FROM AWARD OF CONTRACT WITHOUT REFERRAL

26 TO THE ADMINISTRATOR.—A contracting officer may not, for any reason 

27 relating to an element of responsibility as determined under subsection (b), 

28 preclude a small business concern or group of small business concerns from 

29 being awarded a contract without referring the matter for a final disposition 

30 to the Administrator. 

31 (d) CONCLUSIVE DETERMINATION.—A contracting officer shall— 

32 (1) accept as conclusive a certification made under subsection (b) as 

33 to the specific Government contract with respect to which the certifi34 cation is made; and 

35 (2) let the contract to the small business concern or group of small 

36 business concerns without requiring the small business concern or 

37 group of small business concerns to meet any other requirement of re38 sponsibility or eligibility. 

39 (e) NO EXEMPTION.—The Administrator may not establish an exemption 

40 from referral or notification or refuse to accept a referral or notification 

41 from a contracting officer made under subsection (c), but nothing in this 


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1 section requires the processing of an application for certification if the small 

2 business concern to which the referral pertains declines to have the applica3 tion processed. 

4 § 24109. Information pertaining to Federal procurement or 

5 production 

6 The Administrator shall obtain from any Federal agency engaged in pro7 curement or in the financing of procurement or production such reports con8 cerning the letting of contracts and subcontracts and the making of loans 

9 to business concerns as the Administrator considers pertinent in carrying 

10 out the functions of the Administrator under this subtitle and subtitle I. 

11 § 24110. Information pertaining to disposal of Federal prop12 erty 

13 The Administrator shall obtain from any Federal agency engaged in the 

14 disposal of Federal property such reports concerning the solicitation of bids, 

15 time of sale, or otherwise as the Administrator considers pertinent in car16 rying out the functions of the Administrator under this subtitle and subtitle 

17 I. 

18 § 24111. Information pertaining to supplies of materials 

19 The Administrator shall obtain from suppliers of materials information 

20 pertaining to the method of filling orders for materials, and the bases for 

21 allocating their supplies of materials, when it appears that a small business 

22 concern is unable to obtain material from its normal sources. 

23 § 24112. Fair proportions of business for small business con24 cerns 

25 The Administrator shall make studies and recommendations to the appro26 priate Federal agencies to ensure that— 

27 (1) a fair proportion of the total purchases and contracts for prop28 erty and services for the Government is placed with small business con29 cerns; 

30 (2) a fair proportion of Government contracts for research and devel31 opment is placed with small business concerns; 

32 (3) a fair proportion of the total sales of Government property is 

33 made to small business concerns; and 

34 (4) a fair and equitable share of materials, supplies, and equipment 

35 is available to small business concerns. 

36 § 24113. Fair and reasonable treatment of small business 

37 concerns 

38 The Administrator shall consult and cooperate with all Federal agencies 

39 for the purpose of ensuring that small business concerns receive fair and 

40 reasonable treatment from Federal agencies. 


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1 § 24114. Information and assistance pertaining to federally 

2 aided urban renewal projects 

3 The Administrator shall provide at the earliest practicable time such in4 formation and assistance as are appropriate (including information con5 cerning eligibility for loans under section 21303 of this title) to local public 

6 agencies (as defined in section 110(h) of the Housing Act of 1949 (42 

7 U.S.C. 1460(h))) and to small business concerns to be displaced by federally 

8 aided urban renewal projects in order to assist the small business concerns 

9 in reestablishing operations. 

10 § 24115. Dissemination of information by the Administrator 

11 (a) IN GENERAL.—The Administrator shall disseminate, without regard 

12 to section 3204 of title 39, information, in such form as the Administrator 

13 considers appropriate, to public agencies, private organizations, and the gen14 eral public. 

15 (b) INFORMATION ON FEDERAL PROCUREMENT PRACTICES.—The Ad16 ministrator shall, for each fiscal year— 

17 (1) collect information concerning the procurement practices and 

18 procedures of each Federal agency having procurement authority; 

19 (2) publish and disseminate the information to contracting officers 

20 in all Federal agencies; and 

21 (3) make the information available to any small business concern 

22 that requests the information. 

23 § 24116. Availability of information from Federal agencies 

24 (a) REQUESTS FOR INFORMATION.—For any contract to be let by any 

25 Federal agency, the Federal agency shall provide to any small business con26 cern, on request by the small business concern— 

27 (1) a copy of bid sets and specifications with respect to the contract; 

28 (2) the name and telephone number of an employee of the Federal 

29 agency to answer questions with respect to the contract; and 

30 (3) adequate citations to each major Federal law (including a regula31 tion) with which the small business concern must comply in performing 

32 the contract. 

33 (b) EXEMPT CONTRACTS.—Subsection (a) does not apply to a contract 

34 (or subcontract) that— 

35 (1) will be performed entirely outside the United States; or 

36 (2) is for services that are personal in nature. 

37 § 24117. Adjustment of regulations and programs to the 

38 needs of small business concerns 

39 The Administrator shall— 


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1 (1) make studies of matters materially affecting the competitive 

2 strength of small business concerns and of the effect on small business 

3 concerns of Federal laws (including regulations) and programs; and 

4 (2) make recommendations to Federal agencies as appropriate for 

5 the adjustment of regulations and programs to the needs of small busi6 ness concerns. 

7 § 24118. Outreach programs for disabled veterans, veterans, 

8 and reservists 

9 (a) IN GENERAL.—The Administrator shall make grants to, and enter 

10 into contracts and cooperative agreements with, educational institutions, pri11 vate businesses, veterans’ nonprofit community-based organizations, and 

12 Federal agencies and State and local agencies for the establishment and im13 plementation of outreach programs for disabled veterans, veterans, and re14 servists. 

15 (b) INCREASE IN NUMBER OF VETERANS BUSINESS OUTREACH CEN16 TERS.—The Administrator shall use the authority under subsection (a) to 

17 ensure that the number of veterans business outreach centers throughout 

18 the United States increases by the number that the Administrator considers 

19 appropriate, based on need, for each fiscal year. 

20 CHAPTER 243—SUBCONTRACTING PROVISIONS 

Sec. 

24301. Opportunity to participate in performance of contracts. 

24302. Notice of provisions relating to contracts awarded pursuant to the negotiated method 

of procurement. 

24303. Subcontracting plans. 

24304. Incentives. 

24305. Liquidated damages. 

24306. Material breach. 

24307. Effect of chapter. 

21 § 24301. Opportunity to participate in performance of con22 tracts 

23 (a) IN GENERAL.—The clause stated in subsection (c) shall be included 

24 in all contracts let by a Federal agency except a contract described in sub25 section (b). 

26 (b) EXCEPTED CONTRACTS.—The clause stated in subsection (c) need not 

27 be included in— 

28 (1) a contract that does not exceed the simplified acquisition thresh29 old; 

30 (2) a contract (including all subcontracts under the contract) that 

31 will be performed entirely outside the United States; or 

32 (3) a contract for a service that is personal in nature. 

33 (c) REQUIRED CLAUSE.—The clause required by subsection (a) is as fol34 lows: 

35 ‘‘(1) DEFINITIONS.— 


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1 ‘‘(A) IN GENERAL.—As used in this contract, each of the terms 

2 ‘qualified HUBZone small business concern’, ‘small business con3 cern’, ‘small business concern owned and controlled by service-dis4 abled veterans’, ‘small business concern owned and controlled by 

5 socially and economically disadvantaged individuals’, ‘small busi6 ness concern owned and controlled by veterans’, and ‘small busi7 ness concern owned and controlled by women’ has the meaning 

8 given the term in section 10101 of title 53, United States Code. 

9 ‘‘(B) PRESUMPTION.—For purposes of applying the definition 

10 of ‘small business concern owned and controlled by socially and 

11 economically disadvantaged individuals’, the contractor shall pre12 sume that socially and economically disadvantaged individuals in13 clude Black Americans, Hispanic Americans, Native Americans, 

14 Asian Pacific Americans, and other minorities, or any other indi15 vidual found to be disadvantaged by the United States Small Busi16 ness Administration. 

17 ‘‘(2) POLICY.—It is the policy of the United States that qualified 

18 HUBZone small business concerns, small business concerns owned and 

19 controlled by service-disabled veterans, small business concerns owned 

20 and controlled by socially and economically disadvantaged individuals, 

21 small business concerns owned and controlled by veterans, small busi22 ness concerns owned and controlled by women, and other small busi23 ness concerns shall have the maximum practicable opportunity to par24 ticipate in the performance of contracts let by any Federal agency, in25 cluding contracts and subcontracts for subsystems, assemblies, compo26 nents, and related services for major systems. It is further the policy 

27 of the United States that its prime contractors establish procedures to 

28 ensure the timely payment of amounts due pursuant to the terms of 

29 their subcontracts with qualified HUBZone small business concerns, 

30 small business concerns owned and controlled by service-disabled vet31 erans, small business concerns owned and controlled by socially and 

32 economically disadvantaged individuals, small business concerns owned 

33 and controlled by veterans, small business concerns owned and con34 trolled by women, and other small business concerns. 

35 ‘‘(3) AGREEMENT.—The contractor agrees— 

36 ‘‘(A) to carry out the policy stated in paragraph (2) in the 

37 awarding of subcontracts to the fullest extent consistent with the 

38 efficient performance of this contract; and 

39 ‘‘(B) to cooperate in any studies or surveys that may be con40 ducted by the United States Small Business Administration or the 


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1 awarding agency of the United States as necessary to determine 

2 the extent of the contractor’s compliance with this clause. 

3 ‘‘(4) RELIANCE ON WRITTEN REPRESENTATION.—The contractor, 

4 acting in good faith, may rely on a written representation by a subcon5 tractor regarding its status as a qualified HUBZone small business 

6 concern, small business concern owned and controlled by service-dis7 abled veterans, small business concern owned and controlled by socially 

8 and economically disadvantaged individuals, small business concern 

9 owned and controlled by veterans, small business concern owned and 

10 controlled by women, or other small business concern.’’ 

11 § 24302. Notice of provisions relating to contracts awarded 

12 pursuant to the negotiated method of procurement 

13 (a) REQUIRED CLAUSE.—A solicitation of an offer for a contract de14 scribed in subsection (b) shall contain a clause notifying potential offering 

15 companies of the provisions of this chapter relating to contracts awarded 

16 pursuant to the negotiated method of procurement. 

17 (b) CONTRACTS.—A contract referred to in subsection (a) is a contract 

18 let by a Federal agency that— 

19 (1) is to be awarded pursuant to the negotiated method of procure20 ment; and 

21 (2) may exceed— 

22 (A) $1,000,000, in the case of a contract for the construction 

23 of a public facility; or 

24 (B) $500,000, in the case of any other contract. 

25 § 24303. Subcontracting plans 

26 (a) DEFINITIONS.—In this section: 

27 (1) BIDDER.—The term ‘‘bidder’’ does not include a bidder that is 

28 a small business concern. 

29 (2) OFFEROR.—The term ‘‘offeror’’ does not include an offeror that 

30 is a small business concern. 

31 (b) NEGOTIATED PROCUREMENTS.— 

32 (1) NEGOTIATION.—Before the award of any contract described in 

33 paragraph (2), or any amendment or modification to such a contract, 

34 the apparent successful offeror shall negotiate with the procurement 

35 authority a subcontracting plan that incorporates the information pre36 scribed in subsection (d). 

37 (2) CONTRACTS.—A contract referred to in paragraph (1) is a con38 tract let by a Federal agency that— 

39 (A) is to be (or was) awarded pursuant to the negotiated meth40 od of procurement; 


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1 (B) is required to include the clause stated in section 24301 of 

2 this title; 

3 (C) may exceed— 

4 (i) $1,000,000, in the case of a contract for the construc5 tion of a public facility; or 

6 (ii) $500,000, in the case of any other contract; and 

7 (D) offers a subcontracting possibility. 

8 (3) INCLUSION IN CONTRACT.—The subcontracting plan shall be in9 cluded in and made a material part of the contract. 

10 (4) FAILURE TO NEGOTIATE SUBCONTRACTING PLAN.—If, within the 

11 time prescribed in regulations of the procuring agency, the apparent 

12 successful offeror fails to negotiate the subcontracting plan required by 

13 paragraph (2), the offeror shall be ineligible to be awarded the con14 tract. 

15 (5) PRIOR COMPLIANCE A FACTOR IN DETERMINING RESPONSI16 BILITY.—Prior compliance of the offeror with other subcontracting 

17 plans under this subsection shall be considered by a procuring agency 

18 in determining the responsibility of the offeror for the award of the 

19 contract. 

20 (6) MAXIMUM OPPORTUNITY.—No contract shall be awarded to any 

21 offeror unless the procuring agency determines that the subcontracting 

22 plan to be negotiated by the offeror under paragraph (2) provides the 

23 maximum practicable opportunity for qualified HUBZone small busi24 ness concerns, small business concerns owned and controlled by service25 disabled veterans, small business concerns owned and controlled by so26 cially and economically disadvantaged individuals, small business con27 cerns owned and controlled by veterans, small business concerns owned 

28 and controlled by women, and other small business concerns, to partici29 pate in the performance of the contract. 

30 (c) ADVERTISED PROCUREMENTS.— 

31 (1) REQUIRED CLAUSE.—A solicitation of a bid for a contract de32 scribed in paragraph (2), or any amendment or modification to such 

33 a contract, shall contain a clause requiring any bidder that is selected 

34 to be awarded a contract to submit to the procuring agency a subcon35 tracting plan that incorporates the information prescribed in subsection 

36 (d). 

37 (2) CONTRACTS.—A contract referred to in paragraph (1) is a con38 tract let by a Federal agency that— 

39 (A) is to be awarded pursuant to the formal advertising method 

40 of procurement; 


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1 (B) is required to contain the clause stated in section 24301 of 

2 this title; 

3 (C) may exceed— 

4 (i) $1,000,000, in the case of a contract for the construc5 tion of a public facility; or 

6 (ii) $500,000, in the case of any other contract; and 

7 (D) offers a subcontracting possibility. 

8 (3) INCLUSION IN CONTRACT.—The subcontracting plan of the bid9 der awarded the contract shall be included in and made a material part 

10 of the contract. 

11 (4) FAILURE TO SUBMIT SUBCONTRACTING PLAN.—If, within the 

12 time prescribed in regulations of the procuring agency, the bidder se13 lected to be awarded the contract fails to submit the subcontracting 

14 plan required by paragraph (1), the bidder shall become ineligible to 

15 be awarded the contract. 

16 (5) PRIOR COMPLIANCE A FACTOR IN DETERMINING RESPONSI17 BILITY.—Prior compliance of the bidder with other subcontracting 

18 plans under this subsection shall be considered by the procuring agency 

19 in determining the responsibility of the bidder for the award of the con20 tract. 

21 (d) CONTENTS OF SUBCONTRACTING PLAN.—A subcontracting plan shall 

22 include— 

23 (1) percentage goals for the utilization as subcontractors of qualified 

24 HUBZone small business concerns, small business concerns owned and 

25 controlled by service-disabled veterans, small business concerns owned 

26 and controlled by socially and economically disadvantaged individuals, 

27 small business concerns owned and controlled by veterans, small busi28 ness concerns owned and controlled by women, and other small busi29 ness concerns; 

30 (2) the name of an individual within the employ of the offeror or 

31 bidder who will administer the subcontracting program of the offeror 

32 or bidder and a description of the duties of that individual; 

33 (3) a description of the efforts that the offeror or bidder will take 

34 to ensure that qualified HUBZone small business concerns, small busi35 ness concerns owned and controlled by service-disabled veterans, small 

36 business concerns owned and controlled by socially and economically 

37 disadvantaged individuals, small business concerns owned and con38 trolled by veterans, small business concerns owned and controlled by 

39 women, and other small business concerns will have an equitable oppor40 tunity to compete for subcontracts; 

41 (4) assurances that the offeror or bidder will— 


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1 (A) include the clause required by section 24301 of this title in 

2 all subcontracts that offer further subcontracting opportunities; 

3 and 

4 (B) require all subcontractors (except small business concerns) 

5 that receive subcontracts in excess of $1,000,000 in the case of 

6 a contract for the construction of a public facility, or in excess of 

7 $500,000 in the case of any other contract, to adopt a subcon8 tracting plan similar to the subcontracting plan required under 

9 subsection (b) or (c); 

10 (5) assurances that the offeror or bidder will submit such periodic 

11 reports and cooperate in any studies or surveys as may be required by 

12 the procuring agency or the Administrator to determine the extent of 

13 compliance by the offeror or bidder with the subcontracting plan; and 

14 (6) a recitation of— 

15 (A) the types of records that the successful offeror or bidder will 

16 maintain to demonstrate procedures that are adopted to comply 

17 with the requirements and goals set forth in the subcontracting 

18 plan, including the establishment of source lists of qualified 

19 HUBZone small business concerns, small business concerns owned 

20 and controlled by service-disabled veterans, small business con21 cerns owned and controlled by socially and economically disadvan22 taged individuals, small business concerns owned and controlled by 

23 veterans, small business concerns owned and controlled by women, 

24 and other small business concerns; and 

25 (B) efforts to identify and award subcontracts to small business 

26 concerns. 

27 (e) ATTAINMENT OF GOALS.— 

28 (1) ATTAINABILITY OF GOALS.—A Federal agency shall ensure that 

29 the goals offered by an apparent successful bidder or offeror are attain30 able in relation to— 

31 (A) the subcontracting opportunities available to the contractor, 

32 commensurate with the efficient and economical performance of 

33 the contract; 

34 (B) the pool of eligible subcontractors available to fulfill the 

35 subcontracting opportunities; and 

36 (C) the actual performance of the contractor in fulfilling the 

37 subcontracting goals specified in prior subcontracting plans. 

38 (2) CREDIT FOR DEVELOPMENT ASSISTANCE.—For purposes of de39 termining the attainment of a subcontract utilization goal under a sub40 contracting plan entered into with an executive agency under sub41 section (b) or (c), a mentor firm that provides development assistance 


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1 to a prote ́ge ́ firm under the pilot Mentor-Prote ́ge ́ Program established 

2 pursuant to section 831 of the National Defense Authorization Act for 

3 Fiscal Year 1991 (Public Law 101–510; 10 U.S.C. 2302 note) shall 

4 be granted credit for the assistance in accordance with subsection (g) 

5 of that section. 

6 (f) BUNDLED CONTRACTS.—The following factors shall be designated by 

7 a Federal agency as significant factors for purposes of evaluating offers for 

8 a bundled contract if the head of the Federal agency determines that the 

9 contract offers a significant opportunity for subcontracting: 

10 (1) A factor that is based on the rate provided under the subcon11 tracting plan for small business participation in the performance of the 

12 contract. 

13 (2) For the evaluation of past performance of an offeror, a factor 

14 that is based on the extent to which the offeror attained applicable 

15 goals for small business participation in the performance of contracts. 

16 (g) COMPLIANCE ASSISTANCE.—The Administrator may— 

17 (1) assist Federal agencies and businesses in complying with their 

18 responsibilities under this section, including the formulation of subcon19 tracting plans; 

20 (2)(A) review any solicitation for any contract to be let under sub21 section (b) or (c) to determine the maximum practicable opportunity 

22 for qualified HUBZone small business concerns, small business con23 cerns owned and controlled by service-disabled veterans, small business 

24 concerns owned and controlled by socially and economically disadvan25 taged individuals, small business concerns, small business concerns 

26 owned and controlled by veterans, small business concerns owned and 

27 controlled by women, and other small business concerns to participate 

28 as subcontractors in the performance of any contract resulting from 

29 any solicitation; and 

30 (B) submit findings, which shall be advisory in nature, to the pro31 curing agency; and 

32 (3) evaluate compliance with subcontracting plans— 

33 (A) on a contract-by-contract basis; or 

34 (B) in the case of a contractor having multiple contracts, on an 

35 aggregate basis. 

36 § 24304. Incentives 

37 Notwithstanding any other provision of law, a Federal agency, to encour38 age subcontracting opportunities for qualified HUBZone small business con39 cerns, small business concerns owned and controlled by service-disabled vet40 erans, small business concerns owned and controlled by socially and eco41 nomically disadvantaged individuals, small business concerns owned and 


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1 controlled by veterans, small business concerns owned and controlled by 

2 women, and other small business concerns, may provide such incentives as 

3 the Federal agency considers appropriate to encourage such subcontracting 

4 opportunities as are commensurate with the efficient and economical per5 formance of a contract that is let pursuant to the negotiated method of pro6 curement. 

7 § 24305. Liquidated damages 

8 (a) REQUIRED CLAUSE.— 

9 (1) IN GENERAL.—A contract subject to subsection (b) or (c) of sec10 tion 24303 of this title shall contain a clause for the payment of liq11 uidated damages on a finding that a prime contractor has failed to 

12 make a good faith effort to comply with the requirements imposed on 

13 the contractor by this chapter. 

14 (2) INCLUSION IN FEDERAL ACQUISITION REGULATION.—The clause 

15 required by paragraph (1) shall be made part of the Federal Acquisi16 tion Regulation and promulgated pursuant to section 22 of the Office 

17 of Federal Procurement Policy Act (41 U.S.C. 418b). 

18 (b) DEMONSTRATION OF GOOD FAITH EFFORT.—A contractor shall be 

19 afforded an opportunity to demonstrate a good faith effort regarding com20 pliance prior to the contracting officer’s final decision regarding the imposi21 tion of damages and the amount of damages under subsection (a). 

22 (c) DISPUTE RESOLUTION.—The final decision of a contracting officer re23 garding the contractor’s obligation to pay damages under subsection (a) or 

24 the amount of damages shall be subject to the Contract Disputes Act of 

25 1978 (41 U.S.C. 601 et seq.). 

26 § 24306. Material breach 

27 The failure of a contractor or subcontractor to comply in good faith 

28 with— 

29 (1) the clause required under section 24301 of this title; or 

30 (2) a subcontracting plan required of the contractor pursuant under 

31 section 24303 of this title to be included in its contract or subcontract; 

32 shall be a material breach of the contract or subcontract. 

33 § 24307. Effect of chapter 

34 Nothing in this chapter supersedes the requirements of part 331 of title 

35 44, Code of Federal Regulations (or any successor regulation). 

36 CHAPTER 245—NOTICE PROVISIONS 

Sec. 

24501. Notice provisions. 

24502. Availability of complete solicitation package. 

24503. Limited applicability to Tennessee Valley Authority. 

37 § 24501. Notice provisions 

38 (a) IN GENERAL.—Except as provided in subsection (e)— 


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1 (1) an executive agency intending to— 

2 (A) solicit bids or proposals for a contract for property or serv3 ices for a price expected to exceed $25,000; or 

4 (B) place an order, expected to exceed $25,000, under a basic 

5 agreement, basic ordering agreement, or similar arrangement; 

6 shall publish a notice described in subsection (d); 

7 (2) an executive agency intending to solicit bids or proposals for a 

8 contract for property or services shall post, for a period of not less than 

9 10 days, in a public place at the contracting office issuing the solicita10 tion, a notice of solicitation described in subsection (d)— 

11 (A) in the case of an executive agency other than the Depart12 ment of Defense, if the contract is for a price expected to exceed 

13 $10,000, but not to exceed $25,000; and 

14 (B) in the case of the Department of Defense, if the contract 

15 is for a price expected to exceed $5,000, but not to exceed 

16 $25,000; and 

17 (3) an executive agency awarding a contract for property or services 

18 for a price exceeding $100,000, or placing an order described in para19 graph (1)(B) exceeding $100,000, shall furnish for publication by the 

20 Secretary of Commerce a notice announcing the award or order if there 

21 is likely to be a subcontract under the contract or order. 

22 (b) MEANS OF PUBLICATION.— 

23 (1) NOTICES OF SOLICITATION.—A notice of solicitation required to 

24 be published under subsection (a) may be published by electronic 

25 means that meet the accessibility requirements under section 18(a)(7) 

26 of the Office of Federal Procurement Policy Act (41 U.S.C. 416(a)(7)). 

27 (2) NOTICES OF SUBCONTRACTING OPPORTUNITY.— 

28 (A) IN GENERAL.—A notice of subcontracting opportunity may 

29 be submitted for publication by— 

30 (i) a business concern awarded a contract by an executive 

31 agency subject to subsection (a)(3); and 

32 (ii) a business concern that is a subcontractor or supplier 

33 (at any tier) to such a business concern having a subcon34 tracting opportunity in excess of $10,000. 

35 (B) CONTENTS.—A notice of a subcontracting opportunity shall 

36 include— 

37 (i) a description of the business opportunity that is com38 parable to the description specified in subparagraphs (A), 

39 (B), (C), and (D) of subsection (d)(1); and 

40 (ii) the due date for receipt of offers. 


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1 (C) UNIFORM IMPLEMENTATION.—The Federal Acquisition 

2 Regulation shall provide for uniform implementation of this para3 graph. 

4 (c) LIMITATIONS.—When an executive agency is required by subsection 

5 (a)(1) to publish a notice of solicitation, the executive agency shall not— 

6 (1) issue the solicitation earlier than 15 days after the date on which 

7 the notice is published; or 

8 (2) in the case of a contract or order estimated to be greater than 

9 the simplified acquisition threshold, establish a deadline for the submis10 sion of all bids or proposals in response to the notice required by sub11 section (a)(1) that— 

12 (A) in the case of an order under a basic agreement, basic or13 dering agreement, or similar arrangement, is earlier than the date 

14 that is 30 days after the date on which the notice required by sub15 section (a)(1)(B) is published; 

16 (B) in the case of a solicitation for research and development, 

17 is earlier than the date that is 45 days after the date on which 

18 the notice required by subsection (a)(1)(A) is published; or 

19 (C) in any other case, is earlier than the date that is 30 days 

20 after the date on which the solicitation is issued. 

21 (d) CONTENTS OF NOTICE.— 

22 (1) IN GENERAL.—A notice of solicitation required by paragraph (1) 

23 or (2) of subsection (a) shall include— 

24 (A) an accurate description of the property or services to be 

25 contracted for; 

26 (B) provisions that— 

27 (i)(I) state whether the technical data required to respond 

28 to the solicitation will not be furnished as part of the solicita29 tion; and 

30 (II) identify the source in the Government, if any, from 

31 which the technical data may be obtained; and 

32 (ii)(I) state whether an offeror, its product, or service must 

33 meet a qualification requirement in order to be eligible for 

34 award; and 

35 (II) if so, identify the office from which a qualification re36 quirement may be obtained; 

37 (C) the name, business address, and telephone number of the 

38 contracting officer; 

39 (D) a statement that all responsible sources may submit a bid, 

40 proposal, or quotation (as appropriate) that shall be considered by 

41 the agency; 


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1 (E) in the case of a procurement using procedures other than 

2 competitive procedures, a statement of the reason justifying the 

3 use of such procedures and the identity of the intended source; 

4 and 

5 (F) in the case of a contract in an amount estimated to be 

6 greater than $25,000 but not greater than the simplified acquisi7 tion threshold— 

8 (i) a description of the procedures to be used in awarding 

9 the contract; and 

10 (ii) a statement specifying the periods for prospective 

11 offerors and the contracting officer to take the necessary 

12 preaward and award actions. 

13 (2) PROPERTY OR SERVICE DESCRIPTION.—A property or service de14 scription under paragraph (1)(A)— 

15 (A) shall not be unnecessarily restrictive of competition; and 

16 (B) shall include, as appropriate, the agency nomenclature, Na17 tional Stock Number or other part number, and a brief description 

18 of the item’s form, fit, or function, physical dimensions, predomi19 nant material of manufacture, or similar information that will as20 sist a prospective contractor in making an informed business judg21 ment concerning whether the prospective contractor should request 

22 a copy of the solicitation. 

23 (e) EXEMPTED ACTIVITIES.—A notice is not required under subsection 

24 (a)(1) if— 

25 (1) the proposed procurement— 

26 (A) is for an amount not greater than the simplified acquisition 

27 threshold; and 

28 (B) is to be conducted by— 

29 (i) using widespread electronic public notice of the solicita30 tion in a form that allows convenient and universal user ac31 cess through a single, Governmentwide point of entry; and 

32 (ii) permitting the public to respond to the solicitation elec33 tronically; 

34 (2)(A) the notice would disclose the executive agency’s needs; and 

35 (B) the disclosure of those needs would compromise the national se36 curity; 

37 (3)(A) the proposed procurement would result from acceptance of an 

38 unsolicited proposal that demonstrates a unique and innovative re39 search concept; and 

40 (B) the publication of a notice of the unsolicited research proposal 

41 would disclose the originality of thought or innovativeness of the proVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00194 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 posal or would disclose proprietary information associated with the pro2 posal; 

3 (4) the proposed procurement would result from acceptance of a pro4 posal submitted under chapter 263; 

5 (5) the procurement is made against an order placed under a re6 quirements contract; 

7 (6) the procurement is made for perishable subsistence supplies; 

8 (7)(A) the procurement is for a utility service other than a tele9 communication service; and 

10 (B) only one source is available; or 

11 (8) the procurement is for the service of an expert for use in any 

12 litigation or dispute (including preparation for any foreseeable litigation 

13 or dispute) that involves or could involve the Federal Government in 

14 any trial, hearing, or proceeding before any court, administrative tri15 bunal, or agency, or in any part of an alternative dispute resolution 

16 process, whether or not the expert is expected to testify. 

17 § 24502. Availability of complete solicitation package 

18 (a) IN GENERAL.—An executive agency shall make available to any busi19 ness concern, or the authorized representative of a business concern, the 

20 complete solicitation package for any ongoing procurement announced in a 

21 notice under section 24501 of this title. 

22 (b) FEE.—An executive agency may require the payment of a fee, not ex23 ceeding the actual cost of duplication, for a copy of a solicitation package 

24 under subsection (a). 

25 § 24503. Limited applicability to Tennessee Valley Authority 

26 This chapter applies to the Tennessee Valley Authority only with respect 

27 to procurements to be paid from appropriated funds. 

28 CHAPTER 247—NONCOMPETITIVE PROCEDURES 

Sec. 

24701. Limitation on use of noncompetitive procedures. 

24702. Limited applicability to Tennessee Valley Authority. 

29 § 24701. Limitation on use of noncompetitive procedures 

30 (a) IN GENERAL.—An executive agency may not award a contract using 

31 procedures other than competitive procedures unless— 

32 (1) except as provided in subsection (c), a written justification for 

33 the use of noncompetitive procedures has been approved— 

34 (A) in the case of a contract for an amount exceeding $100,000 

35 (but equal to or less than $1,000,000), by the advocate for com36 petition for the procurement activity; 

37 (B) in the case of a contract for an amount exceeding 

38 $1,000,000 (but equal to or less than $10,000,000), by the head 

39 of the procurement activity or a delegate who— 


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1 (i) if a member of the Armed Forces, is a general or flag 

2 officer; or 

3 (ii) if a civilian, is serving in a position classified above 

4 GS–15 pursuant to section 5108 of title 5; or 

5 (C) in the case of a contract for an amount exceeding 

6 $10,000,000, by the senior procurement executive of the agency 

7 designated pursuant to section 16(c) of the Office of Federal Pro8 curement Policy Act (41 U.S.C. 414(c)); and 

9 (2) all other requirements applicable to the use of noncompetitive 

10 procedures under title III of the Federal Property and Administrative 

11 Services Act of 1949 (41 U.S.C. 251 et seq.) or chapter 137 of title 

12 10, as appropriate, have been satisfied. 

13 (b) NONDELEGABILITY.—The authority of an advocate for competition to 

14 approve the use of noncompetitive procedures under subsection (a)(1)(A) 

15 and the authority of a senior procurement executive to approve the use of 

16 noncompetitive procedures under subsection (a)(1)(C) may not be delegated. 

17 (c) EXCEPTIONS.—The same exceptions as are provided in section 

18 303(f)(2) of the Federal Property and Administrative Services Act of 1949 

19 (41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10 shall apply with re20 spect to the requirements of subsection (a)(1) of this section in the same 

21 manner as those exceptions apply to the requirements of section 303(f)(1) 

22 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 

23 253(f)(1)) or section 2304(f)(1) of title 10, as appropriate. 

24 § 24702. Limited applicability to Tennessee Valley Authority 

25 This chapter applies to the Tennessee Valley Authority only with respect 

26 to procurements to be paid from appropriated funds. 

27 CHAPTER 249—SMALL BUSINESS COMPETITIVENESS 

28 DEMONSTRATION PROGRAM 

Sec. 

24901. Definitions. 

24902. Establishment of program. 

24903. Enhanced small business participation goals. 

24904. Procurement procedures. 

24905. Reporting and collection of data. 

24906. Test plan and policy direction. 

29 § 24901. Definitions 

30 In this chapter: 

31 (1) DESIGNATED INDUSTRY GROUP.— 

32 (A) IN GENERAL.—The term ‘‘designated industry group’’ 

33 means— 

34 (i) construction (excluding dredging); 

35 (ii) refuse systems and related services; 

36 (iii) architectural and engineering services (including sur37 veying and mapping); 


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1 (iv) non-nuclear ship repair; and 

2 (v) landscaping and pest control services. 

3 (B) CONSTRUCTION.—In subparagraph (A)(i), the term ‘‘con4 struction’’ includes a contract award that is assigned a North 

5 American Industry Classification System code in— 

6 (i) Subsector 236 (Construction of Buildings); 

7 (ii) Subsector 237 (Heavy and Civil Engineering Construc8 tion) (excluding dredging); or 

9 (iii) Subsector 238 (Specialty Trade Contractors). 

10 (C) REFUSE AND RELATED SERVICES.—In subparagraph 

11 (A)(ii), the term ‘‘refuse systems and related services’’ includes a 

12 contract award that is assigned— 

13 (i) a North American Industry Classification System code 

14 in Subsector 562 (Waste Management and Remediation Serv15 ices) except code 56291; 

16 (ii) North American Industry Classification System code 

17 48411 (index item ‘‘local general freight trucking without 

18 storage’’ only); 

19 (iii) North American Industry Classification System code 

20 48421 (index item ‘‘household goods moving without storage’’ 

21 only); or 

22 (iv) North American Industry Classification System code 

23 48422 (index item ‘‘local specialized freight without storage’’ 

24 only). 

25 (D) ARCHITECTURAL AND ENGINEERING SERVICES.—In sub26 paragraph (A)(iii), the term ‘‘architectural and engineering serv27 ices (including surveying and mapping)’’ includes a contract award 

28 that— 

29 (i) is assigned North American Industry Classification Sys30 tem code 54131, 54133 (except index item ‘‘traffic engineer31 ing’’), 54136 (index item ‘‘geophysical surveying services’’ 

32 only), or 54137; and 

33 (ii) is awarded under the qualification-based selection pro34 cedures required by sections 1101 to 1104 of title 40. 

35 (E) LANDSCAPING AND PEST CONTROL SERVICES.—In subpara36 graph (A)(v), the term ‘‘landscaping and pest control services’’ in37 cludes a contract award that is assigned North American Industry 

38 Classification System code 561710 (relating to extermination and 

39 pest control services) or 561730 (relating to landscaping services). 

40 (2) EMERGING SMALL BUSINESS CONCERN.—The term ‘‘emerging 

41 small business concern’’ means a small business concern whose size is 


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1 not greater than 50 percent of the numerical size standard applicable 

2 to the North American Industry Classification System code assigned to 

3 a contracting opportunity. 

4 (3) ENHANCED SMALL BUSINESS PARTICIPATION GOAL.—The term 

5 ‘‘enhanced small business participation goal’’, with respect to a partici6 pating agency, means an enhanced small business participation goal es7 tablished for the participating agency under section 24903 of this title. 

8 (4) FULL AND OPEN COMPETITION.—The term ‘‘full and open com9 petition’’ has the meaning given the term in section 4 of the Office of 

10 Federal Procurement Policy Act (41 U.S.C. 403). 

11 (5) PARTICIPATING AGENCY.— 

12 (A) IN GENERAL.—The term ‘‘participating agency’’ means an 

13 executive agency (as defined in section (4) of the Office of Federal 

14 Procurement Policy Act (41 U.S.C. 403)) that the Administrator 

15 for Federal Procurement Policy designates to participate in the 

16 program. 

17 (B) EXECUTIVE AGENCIES REQUIRED TO BE DESIGNATED.— 

18 Under subparagraph (A), the Administrator for Federal Procure19 ment Policy shall designate to participate in the program— 

20 (i) the Department of Agriculture; 

21 (ii) the Department of Defense (with the Department of 

22 the Army, the Department of the Navy, the Department of 

23 the Air Force, and the defense agencies reporting separately); 

24 (iii) the Department of Energy; 

25 (iv) the Department of Health and Human Services; 

26 (v) the Department of the Interior; 

27 (vi) the Department of Transportation; 

28 (vii) the Environmental Protection Agency; 

29 (viii) the General Services Administration (with the Public 

30 Building Service reporting separately); 

31 (ix) the National Aeronautics and Space Administration; 

32 and 

33 (x) the Department of Veterans Affairs. 

34 (C) REPORTING.—The Administrator for Federal Procurement 

35 Policy may require any participating agencies to report separately 

36 in any manner that the Administrator for Federal Procurement 

37 Policy considers appropriate to enhance the attainment of the test 

38 activities authorized by this chapter. 

39 (6) PROGRAM.—The term ‘‘program’’ means the small business com40 petitiveness demonstration program. 


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1 (7) SMALL BUSINESS PARTICIPATION.—The term ‘‘small business 

2 participation’’ includes the aggregate dollar value of every procurement 

3 contract award made to a small business concern, without regard to 

4 whether an award was based on restricted or unrestricted competition 

5 or was made on a sole source basis. 

6 § 24902. Establishment of program 

7 (a) IN GENERAL.—There is established a small business competitiveness 

8 demonstration program under section 15 of the Office of Federal Procure9 ment Policy Act (41 U.S.C. 413) to provide for the testing of innovative 

10 procurement methods and procedures. 

11 (b) EXECUTIVE AGENT.—The Administrator of Federal Procurement Pol12 icy shall designate the Administrator as the executive agent responsible for 

13 conducting the testing. 

14 (c) PURPOSE.—The purpose of the program is to demonstrate whether— 

15 (1) the competitive capabilities of small business concerns in certain 

16 industry groups will enable the small business concerns to compete suc17 cessfully on an unrestricted basis for Federal contracting opportunities; 

18 (2) the use of targeted goaling and management techniques by pro19 curing agencies, in conjunction with the Administrator, can expand 

20 small business participation in Federal contracting opportunities that 

21 have been historically low, despite adequate numbers of qualified small 

22 business contractors in the economy; and 

23 (3) expanded use of full and open competition adversely affects small 

24 business participation in certain industry groups, taking into consider25 ation the numerical dominance of small firms, the size and scope of 

26 most contracting opportunities, and the competitive capabilities of 

27 small business concerns. 

28 (d) APPLICABILITY.—The program shall apply to contract solicitations for 

29 the procurement of services in the designated industry groups. 

30 § 24903. Enhanced small business participation goals 

31 (a) ENHANCED GOALS FOR DESIGNATED INDUSTRY GROUPS.— 

32 (1) ESTABLISHMENT OF GOALS.—A participating agency shall estab33 lish an annual small business participation goal that is 40 percent of 

34 the dollar value of the contract awards for each of the designated in35 dustry groups. 

36 (2) GOOD FAITH EFFORT.—In attaining its small business participa37 tion goal for contract awards for each of the designated industry 

38 groups, a participating agency shall make a good faith effort to ensure 

39 that emerging small business concerns are awarded not less than 15 

40 percent of the dollar value of the contract awards for each of the des41 ignated industry groups. 


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1 (b) SPECIAL ASSISTANCE FOR EMERGING SMALL BUSINESS CON2 CERNS.— 

3 (1) SMALL BUSINESS RESERVE.—All contract opportunities in the 

4 designated industry groups shall be reserved for exclusive competition 

5 among emerging small business concerns in accordance with the com6 petition standard specified in section 25108 of this title if the esti7 mated award value of the contract is equal to or less than the greater 

8 of— 

9 (A) $25,000; or 

10 (B) such larger dollar amount as may be established under 

11 paragraph (2). 

12 (2) ADJUSTMENTS TO THE SMALL BUSINESS RESERVE.—If the goal 

13 of awarding emerging small business concerns 15 percent of the total 

14 dollar value of contracts in a designated industry group is determined 

15 not to have been attained, on the review of award data conducted in 

16 accordance with subsection (d)(1), the Administrator for Federal Pro17 curement Policy, to ensure attainment of the goal, shall prescribe, on 

18 a semiannual basis, appropriate adjustments to the dollar threshold for 

19 contract opportunities in that designated industry group below which 

20 competition shall be conducted exclusively among emerging small busi21 ness concerns. 

22 (3) SMALL BUSINESS SMALL PURCHASE RESERVE.—The require23 ments of this subsection dealing with the reserve amount shall apply 

24 notwithstanding the amount specified in section 25108 of this title. 

25 (4) EXCLUSION OF MODIFICATIONS TO EXISTING CONTRACTS ABOVE

26 THE SMALL PURCHASE THRESHOLD.—Any modification or follow-on 

27 award to a contract having an initial award value in excess of $25,000 

28 shall not be subject to the limitations on competition required by this 

29 subsection. 

30 (c) TARGETING OF INDUSTRY GROUPS WITH LIMITED SMALL BUSINESS

31 PARTICIPATION.— 

32 (1) IN GENERAL.—The head of a participating agency shall imple33 ment a program to expand small business participation in the partici34 pating agency’s acquisition of selected products and services in 10 in35 dustry groups (other than the designated industry groups) that have 

36 historically demonstrated low rates of small business participation. 

37 (2) DEVELOPMENT.—The products and services to be targeted for 

38 the small business participation expansion program and the special 

39 goals for the program— 

40 (A) shall be developed in conjunction with the Administrator; 

41 and 


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1 (B) shall be subject to the requirements of section 25106 of this 

2 title. 

3 (3) PRODUCTS AND SERVICES.—The products and services selected 

4 for the small business participation expansion program shall be drawn 

5 from industry groups that— 

6 (A) are the recipients of substantial purchases by the Federal 

7 Government; 

8 (B) have less than 10 percent of such annual purchases made 

9 from small business concerns; and 

10 (C) have significant amounts of small business productive ca11 pacity that have not been utilized by the Government. 

12 (4) REQUIREMENTS.—In developing its small business participation 

13 expansion program, a participating agency shall— 

14 (A) provide the Administrator a detailed, time-phased strategy 

15 that includes incremental numerical goals; and 

16 (B) encourage and promote joint ventures, teaming agreements, 

17 and other similar arrangements that permit small business con18 cerns to compete effectively for contract solicitations for which an 

19 individual small business concern would lack the requisite capacity 

20 or capability needed to establish responsibility for the award of a 

21 contract. 

22 (d) MONITORING OF PARTICIPATING AGENCY PERFORMANCE.— 

23 (1) IN GENERAL.—A participating agency shall monitor the attain24 ment of its small business participation goals on an annual basis. An 

25 annual review by each participating agency shall be completed not later 

26 than January 31 of each year, based on the data for the preceding fis27 cal year, from October 1 through September 30. 

28 (2) COUNTING OF AWARDS.—All awards to small business concerns 

29 shall be counted toward attainment of the goals specified in subsection 

30 (a). 

31 (3) MODIFICATIONS.—If an annual review discloses that the rate of 

32 small business participation is less than 40 percent of the contract 

33 awards for a fiscal year, modifications to a participating agency’s solici34 tation practices under section 24904(b) of this title shall be made at 

35 the beginning of the fiscal year quarter following the review. 

36 § 24904. Procurement procedures 

37 (a) FULL AND OPEN COMPETITION.— 

38 (1) IN GENERAL.—Except as provided in subsections (b) and (c), a 

39 contract opportunity with an anticipated value of more than $25,000 

40 for the procurement of services from firms in a designated industry 

41 group (unless set aside under chapter 233 of this title or section 2323 


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1 of title 10) shall be solicited on an unrestricted basis if the partici2 pating agency has attained its small business participation goal under 

3 section 24903(a) of this title. 

4 (2) WAIVER OF REGULATORY REQUIREMENTS.—Any regulatory re5 quirements that are inconsistent with paragraph (1) shall be waived. 

6 (b) RESTRICTED COMPETITION.— 

7 (1) IN GENERAL.—If a participating agency fails to attain an en8 hanced small business participation goal, subsequent contracting oppor9 tunities that are in excess of the reserve thresholds specified under sec10 tion 24903(b) of this title shall be solicited through a competition re11 stricted to eligible small business concerns under section 25101 of this 

12 title only at the buying activities of the participating agency that failed 

13 to attain the enhanced small business participation goal. 

14 (2) RESUMATION OF UNRESTRICTED COMPETITION.—On deter15 mining that its contract awards to small business concerns again meet 

16 an enhanced small business participation goal, a participating agency 

17 shall promptly resume the use of unrestricted solicitations under sub18 section (a). 

19 (3) TIMING.—A modification in the solicitation practices of a partici20 pating agency under this subsection shall be made as soon as prac21 ticable, but not later than the beginning of the quarter following com22 pletion of the review made under section 24903(d) of this title indi23 cating that a modification to the solicitation practices is required. 

24 (c) RELATIONSHIP TO OTHER LAW.— 

25 (1) COMPETITION IN CONTRACTING ACT OF 1984.—Subsections (a) 

26 and (b) do not supersede the application of the Competition in Con27 tracting Act of 1984 (98 Stat. 1175) (including the amendments made 

28 by that Act). 

29 (2) OTHER APPLICABLE LAW.—A solicitation for the award of a con30 tract for architectural or engineering service (including surveying and 

31 mapping) issued by a military department or a Defense agency shall 

32 comply with the requirements of subsections (a) and (b) of section 

33 2855 of title 10. 

34 § 24905. Reporting and collection of data 

35 (a) AWARDS OF $25,000 OR LESS.—An award of $25,000 or less made 

36 by a participating agency for the procurement of a service in any designated 

37 industry group shall be reported to the Federal Procurement Data Center 

38 in the same manner as if the purchase were in excess of $25,000. 

39 (b) SIZE AND STATUS OF SMALL BUSINESS CONCERNS.—A participating 

40 agency shall collect data pertaining to the size of the small business concern 

41 and the status of the small business concern (as a small business concern 


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1 owned and controlled by socially and economically disadvantaged individ2 uals) that receives any award for the procurement of— 

3 (1) a service in any designated industry group; or 

4 (2) a product or service from an industry group selected for partici5 pation in the program under section 24903(c) of this title. 

6 § 24906. Test plan and policy direction 

7 (a) TEST PLAN.—The Administrator for Federal Procurement Policy may 

8 further specify the manner and conduct of the test activities required by this 

9 chapter through a test plan issued under section 15 of the Office of Federal 

10 Procurement Policy Act (41 U.S.C. 413). 

11 (b) POLICY DIRECTION.—The Administrator for Federal Procurement 

12 Policy, in cooperation with the Administrator, shall issue a policy directive 

13 (which shall be binding on all participating agencies) to ensure consistent 

14 Governmentwide implementation of this chapter in the Federal Acquisition 

15 Regulation. 

16 DIVISION G—CONTRACT RESERVATION 

17 PROGRAMS 

18 CHAPTER 251—GENERAL PROVISIONS 

Sec. 

25101. Awards of contracts to small business concerns. 

25102. Placement of contracts by procuring agency. 

25103. Disabled individuals. 

25104. Priority for areas of concentrated unemployment or underemployment and for labor 

surplus areas. 

25105. Procurement strategies; contract bundling. 

25106. Goals for participation by small business concerns in procurement contracts. 

25107. No effect on certain small business setasides. 

25108. Mandatory contract reservation. 

25109. Offices of Small and Disadvantaged Business Utilization. 

25110. Breakout procurement center representatives. 

25111. Department of Defense, Coast Guard, and National Aeronautics and Space Administration contract goals. 

25112. Actions by procurement center representatives to ensure compliance. 

25113. Percentages of contract performance. 

19 § 25101. Awards of contracts to small business concerns 

20 (a) IN GENERAL.—Subject to subsection (b), a small business concern 

21 shall receive any award or contract (or any part of an award or contract), 

22 and be awarded any contract for the sale of Government property, as to 

23 which the Administrator and the contracting procurement or disposal agen24 cy determine it to be in the interest of— 

25 (1) maintaining or mobilizing the Nation’s full productive capacity; 

26 (2) war or national defense programs; 

27 (3) ensuring that a fair proportion of the total purchases and con28 tracts for property and services for the Government in each industry 

29 category are placed with small business concerns; or 

30 (4) ensuring that a fair proportion of the total sales of Government 

31 property be made to small business concerns. 


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1 (b) NO CHANGE IN PREFERENCES OR PRIORITIES.—Nothing in this sub2 title changes any preference or priority established by law with respect to 

3 the sale of electric power or other property by the Government or any Gov4 ernment agency. 

5 (c) DETERMINATIONS.—A determination under subsection (a) may be 

6 made for individual awards or contracts or for classes of awards or con7 tracts. 

8 (d) INDUSTRY CATEGORIES.— 

9 (1) IN GENERAL.—For purposes of subsection (a)(3), an industry 

10 category is a discrete group of similar goods and services. 

11 (2) DETERMINATION.—A discrete group of similar goods and serv12 ices shall be determined by the Administrator in accordance with the 

13 definition of a United States industry under the North American In14 dustry Classification System, as established by the Office of Manage15 ment and Budget, except that the Administrator shall limit such an in16 dustry category to a greater extent than provided under the North 

17 American Industry Classification System if the Administrator receives 

18 evidence indicating that further segmentation for purposes of sub19 section (a)(3) is warranted due to special capital equipment needs or 

20 special labor or geographic requirements or to recognize a new indus21 try. 

22 (3) LIMITATION.—A market for goods or services may not be seg23 mented under paragraph (2) due to geographic requirements unless— 

24 (A) the Government typically designates the area where work 

25 for contracts for such goods or services is to be performed; 

26 (B) Government purchases comprise the major portion of the 

27 entire domestic market for such goods or services; and 

28 (C) due to the fixed location of facilities, high mobilization 

29 costs, or similar economic factors, it is unreasonable to expect 

30 competition from business concerns located outside the general 

31 areas where the business concerns are located. 

32 (4) SEGMENTATION OF INDUSTRY CATEGORY OF SHIPBUILDING AND

33 SHIP REPAIR.—The Administrator shall segment the industry category 

34 of shipbuilding and ship repair as follows: 

35 (A) Nuclear shipbuilding and repair. 

36 (B) Non-nuclear shipbuilding. 

37 (C) Non-nuclear ship repair, which shall be further segmented 

38 by, at least, east coast and west coast facilities. 

39 (e) AVOIDANCE OF CONTRACT BUNDLING.—To foster the participation of 

40 small business concerns in the contracting opportunities of the Government, 

41 a Federal agency, to the maximum extent practicable, shall— 


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1 (1) foster the participation of small business concerns as prime con2 tractors, subcontractors, and suppliers; 

3 (2) structure its contracting requirements to facilitate competition by 

4 and among small business concerns, taking all reasonable steps to 

5 eliminate obstacles to participation by small business concerns; and 

6 (3) avoid unnecessary and unjustified bundling of contract require7 ments that precludes participation by small business in procurements 

8 as prime contractors. 

9 (f) PROPOSED PROCUREMENTS THAT MAKE PARTICIPATION BY SMALL

10 BUSINESS CONCERNS UNLIKELY.— 

11 (1) NOTIFICATION OF SMALL BUSINESS PROCUREMENT CENTER

12 REPRESENTATIVE.—If— 

13 (A)(i) a proposed procurement includes in its statement of work 

14 a good or service currently being performed by a small business 

15 concern; and 

16 (ii) the proposed procurement is in a quantity or estimated dol17 lar value the magnitude of which renders prime contract participa18 tion by small business concerns unlikely; 

19 (B) a proposed procurement for construction seeks to package 

20 or consolidate discrete construction projects; or 

21 (C) a solicitation involves an unnecessary or unjustified bun22 dling of contract requirements, as determined by the Adminis23 trator; 

24 the procurement activity shall, at least 30 days before issuance of the 

25 solicitation, provide to the procurement activity’s small business pro26 curement center representative a copy of the proposed procurement and 

27 a statement of explanation. 

28 (2) CONTENTS OF STATEMENT OF EXPLANATION.—A statement of 

29 explanation under paragraph (1) shall explain— 

30 (A) why the proposed acquisition cannot be divided into reason31 ably small lots (not less than economic production runs) to permit 

32 offers on quantities less than the total requirement; 

33 (B) why delivery schedules cannot be established on a realistic 

34 basis that will encourage participation by small business concerns 

35 to the extent consistent with the actual requirements of the Gov36 ernment; 

37 (C) why the proposed acquisition cannot be offered so as to 

38 make participation by small business concerns likely; 

39 (D) why construction cannot be procured as separate discrete 

40 projects; or 


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1 (E) why the procurement activity determined that the bundled 

2 contract is necessary and justified. 

3 (3) CONCURRENT PROCESS.—The 30-day notification process shall 

4 occur concurrently with other processing steps required before issuance 

5 of the solicitation. 

6 (4) ALTERNATIVE PROCUREMENT METHODS.—Within 15 days after 

7 receipt of the proposed procurement and statement of explanation, if 

8 the procurement center representative believes that the procurement as 

9 proposed will render prime contract participation by small business 

10 concerns unlikely, the procurement center representative shall rec11 ommend to the procurement activity alternative procurement methods 

12 that would increase prime contracting opportunities for small business 

13 concerns. 

14 (5) FAILURE TO AGREE.—If the Administrator and the contracting 

15 procurement agency fail to agree, the Administrator shall appeal the 

16 matter to the head of the appropriate Federal agency for determina17 tion. 

18 (g) FAIR MARKET PRICE.—A contract may not be awarded under this 

19 section if the award of the contract would result in a cost to the procure20 ment activity that exceeds a fair market price. 

21 § 25102. Placement of contracts by procuring agency 

22 With respect to any work to be performed the amount of which would 

23 exceed the maximum amount of a contract for which a surety may be guar24 anteed against loss under section 32102 of this title, the contracting pro25 curement agency shall, to the extent practicable, place contracts so as to 

26 allow more than one small business concern to perform the work. 

27 § 25103. Disabled individuals 

28 (a) DEFINITION OF COMMITTEE.—In this section, the term ‘‘Committee’’ 

29 means the Committee for Purchase From People Who Are Blind or Severely 

30 Disabled established under the first section of the Act of June 25, 1938 

31 (41 U.S.C. 46). 

32 (b) PARTICIPATION.— 

33 (1) IN GENERAL.—During fiscal year 1995, public or private organi34 zations for the disabled shall be eligible to participate in programs au35 thorized under this chapter in an aggregate amount not to exceed 

36 $40,000,000. 

37 (2) PROCUREMENT LIST.—None of the amounts authorized for par38 ticipation by paragraph (1) may be placed on the procurement list 

39 maintained by the Committee under section 2 of the Act of June 25, 

40 1938 (41 U.S.C. 47). 


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1 (c) MONITORING AND EVALUATION.—The Administrator shall monitor 

2 and evaluate participation under subsection (b). 

3 (d) APPEAL.— 

4 (1) FILING.—Not later than 10 days after the announcement of a 

5 proposed award of a contract by a Federal agency to a public or private 

6 organization for the disabled, a for-profit small business concern that 

7 has experienced or is likely to experience severe economic injury as the 

8 result of the proposed award may file an appeal of the proposed award 

9 with the Administrator. 

10 (2) ALLEVIATION OF INJURY.—If a small business concern files an 

11 appeal of a proposed award under paragraph (1) and the Adminis12 trator, after consultation with the Executive Director of the Committee, 

13 finds that the small business concern has experienced or is likely to ex14 perience severe economic injury as the result of the proposed award, 

15 not later than 30 days after the filing of the appeal, the Administrator 

16 shall require each Federal agency having procurement powers to take 

17 such action as is appropriate to alleviate economic injury sustained or 

18 likely to be sustained by the small business concern. 

19 (e) MAXIMUM AMOUNT OF AWARDS.— 

20 (1) REPORTING.—A Federal agency having procurement powers 

21 shall report to the Office of Federal Procurement Policy each time a 

22 contract subject to subsection (b) is entered into and shall include in 

23 its report the amount of the next higher bid submitted by a for-profit 

24 small business concern. 

25 (2) DATA COLLECTION.—The Office of Federal Procurement Policy 

26 shall collect data reported under paragraph (1) through the Federal 

27 procurement data system and shall report the data to the Adminis28 trator. 

29 (3) NOTIFICATION.—The Administrator shall notify all Federal 

30 agencies having procurement powers when the maximum amount of 

31 awards authorized under subsection (b) has been made during any fis32 cal year. 

33 (f) CONTRACT PERFORMANCE BY DISABLED INDIVIDUALS.—A contract 

34 may be awarded under this section only if at least 75 percent of the direct 

35 labor performed on each item being produced under the contract in a shel36 tered workshop or performed in providing each type of service under the 

37 contract by a sheltered workshop is performed by disabled individuals. 

38 (g) MULTIYEAR CONTRACTS.—A Federal agency that awards one or more 

39 contracts to such a public or private organization for the disabled under this 

40 section may use multiyear contracts, if appropriate. 


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1 § 25104. Priority for areas of concentrated unemployment or 

2 underemployment and for labor surplus areas 

3 (a) IN GENERAL.—For purposes of this chapter, priority shall be given 

4 to the awarding of contracts and the placement of subcontracts to small 

5 business concerns that shall perform a substantial proportion of the produc6 tion on the contracts and subcontracts in— 

7 (1) an area of concentrated unemployment or underemployment; or 

8 (2) a labor surplus area. 

9 (b) SETASIDES.— 

10 (1) IN GENERAL.—Notwithstanding any other provision of law, total 

11 labor surplus area setasides under part 331 of title 44, Code of Federal 

12 Regulations (or any successor regulation), shall be authorized if the 

13 Secretary of Defense specifically determines that there is a reasonable 

14 expectation that offers will be obtained from a sufficient number of eli15 gible concerns so that awards will be made at reasonable prices. 

16 (2) DETERMINATION OF LABOR SURPLUS AREAS.— 

17 (A) CONSIDERATION OF PERSONS AVAILABLE FOR EMPLOY18 MENT.—To the extent possible, in determining labor surplus areas, 

19 consideration shall be given to persons who would be available for 

20 employment were suitable employment available. 

21 (B) CRITERIA IN EFFECT.—For purposes of this chapter, the 

22 determination of a labor surplus area shall be made on the basis 

23 of the criteria in effect at the time of the determination, except 

24 that any minimum population criteria shall not exceed 25,000. 

25 (C) DETERMINATION BY SECRETARY OF LABOR.—A determina26 tion of a labor surplus area shall be made by the Secretary of 

27 Labor. 

28 § 25105. Procurement strategies; contract bundling 

29 (a) IN GENERAL.—To the maximum extent practicable, procurement 

30 strategies used by a Federal agency having contracting authority shall facili31 tate the maximum participation of small business concerns as prime con32 tractors, subcontractors, and suppliers. 

33 (b) MARKET RESEARCH.— 

34 (1) IN GENERAL.—Before proceeding with an acquisition strategy 

35 that could lead to a contract containing consolidated procurement re36 quirements, the head of a Federal agency shall conduct market re37 search to determine whether consolidation of the requirements is nec38 essary and justified. 

39 (2) FACTORS.—For purposes of paragraph (1), consolidation of the 

40 requirements may be determined as being necessary and justified if, as 

41 compared with the benefits that would be derived from contracting to 


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1 meet those requirements if not consolidated, the Federal Government 

2 would derive from the consolidation measurably substantial benefits, in3 cluding any combination of benefits that, in combination, are measur4 ably substantial. 

5 (3) BENEFITS.—Benefits described in paragraph (2) may include— 

6 (A) cost savings; 

7 (B) quality improvements; 

8 (C) reduction in acquisition cycle times; 

9 (D) better terms and conditions; or 

10 (E) any other benefit. 

11 (4) REDUCTION OF ADMINISTRATIVE OR PERSONNEL COSTS NOT A

12 SUFFICIENT JUSTIFICATION.—A reduction of administrative or per13 sonnel costs alone shall not be a justification for bundling of contract 

14 requirements unless the cost savings are expected to be substantial in 

15 relation to the dollar value of the procurement requirements to be con16 solidated. 

17 (c) STRATEGY SPECIFICATIONS.—If the head of a procuring agency de18 termines that a proposed procurement strategy for a procurement involves 

19 a substantial bundling of contract requirements, the proposed procurement 

20 strategy shall— 

21 (1) identify specifically the benefits anticipated to be derived from 

22 the bundling of contract requirements; 

23 (2) set forth an assessment of the specific impediments to participa24 tion by small business concerns as prime contractors that result from 

25 the bundling of contract requirements and specify actions designed to 

26 maximize small business participation as subcontractors (including sup27 pliers) at various tiers under the contract or contracts that are award28 ed to meet the requirements; and 

29 (3) include a specific determination that the anticipated benefits of 

30 the proposed bundled contract justify its use. 

31 (d) CONTRACT TEAMING.— 

32 (1) IN GENERAL.—In the case of a solicitation of offers for a bun33 dled contract that is issued by the head of a Federal agency, a small 

34 business concern may submit an offer that provides for use of a par35 ticular team of subcontractors for the performance of the contract. 

36 (2) EVALUATION.—The head of the Federal agency shall evaluate 

37 the offer in the same manner as other offers, with due consideration 

38 to the capabilities of all of the proposed subcontractors. 

39 (3) NO EFFECT ON STATUS AS SMALL BUSINESS CONCERN.— 

40 Teaming by a small business concern under this subsection shall not 


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1 affect the status of the small business concern as a small business con2 cern for any other purpose. 

3 (e) DATABASE AND ANALYSIS WITH RESPECT TO BUNDLED CON4 TRACTS.— 

5 (1) DATABASE.—The Administrator shall maintain a database con6 taining information regarding— 

7 (A) each bundled contract awarded by a Federal agency; and 

8 (B) each small business concern that has been displaced as a 

9 prime contractor as a result of the award of a bundled contract. 

10 (2) ANALYSIS.—For each bundled contract that is to be recompeted 

11 as a bundled contract, the Administrator shall determine— 

12 (A) the amount of savings and benefits (in accordance with sub13 section (b)) achieved under the bundling of contract requirements; 

14 and 

15 (B) whether such savings and benefits will continue to be real16 ized if the contract remains bundled, and whether such savings 

17 and benefits would be greater if the procurement requirements 

18 were divided into separate solicitations suitable for award to small 

19 business concerns. 

20 (3) ACCESS TO DATA.— 

21 (A) FEDERAL PROCUREMENT DATA SYSTEM.—To assist in the 

22 implementation of this subsection and section 10706 of this title, 

23 the Administrator shall have access to information collected 

24 through the Federal Procurement Data System. 

25 (B) AGENCY PROCUREMENT DATA SOURCES.—To assist in the 

26 implementation of this subsection and section 10706 of this title, 

27 the head of each procuring agency shall provide, on request of the 

28 Administrator, procurement information collected through existing 

29 agency data collection sources. 

30 § 25106. Goals for participation by small business concerns 

31 in procurement contracts 

32 (a) GOVERNMENTWIDE GOALS.— 

33 (1) IN GENERAL.—The President shall annually establish Govern34 mentwide goals for procurement contracts awarded to small business 

35 concerns (including qualified HUBZone small business concerns, small 

36 business concerns owned and controlled by service-disabled veterans, 

37 small business concerns owned and controlled by socially and economi38 cally disadvantaged individuals, small business concerns owned and 

39 controlled by women, and other small business concerns). 

40 (2) OVERALL GOAL.—The overall Governmentwide goal for participa41 tion by small business concerns shall be established at not less than 


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1 23 percent of the total value of all prime contract awards for each fis2 cal year. 

3 (3) GOALS FOR SPECIFIC TYPES OF SMALL BUSINESS CONCERN.— 

4 (A) QUALIFIED HUBZONE SMALL BUSINESS CONCERNS.—The 

5 Governmentwide goal for participation by qualified HUBZone 

6 small business concerns shall be established at not less than 3 per7 cent of the total value of all prime contract awards for each fiscal 

8 year. 

9 (B) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY

10 SERVICE-DISABLED VETERANS.—The Governmentwide goal for 

11 participation by small business concerns owned and controlled by 

12 service-disabled veterans shall be established at not less than 3 

13 percent of the total value of all prime contract and subcontract 

14 awards for each fiscal year. 

15 (C) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY

16 SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.— 

17 The Governmentwide goal for participation by small business con18 cerns owned and controlled by socially and economically disadvan19 taged individuals shall be established at not less than 5 percent 

20 of the total value of all prime contract and subcontract awards for 

21 each fiscal year. 

22 (D) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY

23 WOMEN.—The Governmentwide goal for participation by small 

24 business concerns owned and controlled by women shall be estab25 lished at not less than 5 percent of the total value of all prime 

26 contract and subcontract awards for each fiscal year. 

27 (4) FEDERAL AGENCY GOALS.— 

28 (A) IN GENERAL.—Notwithstanding the Governmentwide goal, 

29 each Federal agency shall have an annual goal that presents, for 

30 that Federal agency, the maximum practicable opportunity for 

31 small business concerns (including qualified HUBZone small busi32 ness concerns, small business concerns owned and controlled by 

33 service-disabled veterans, small business concerns owned and con34 trolled by socially and economically disadvantaged individuals, 

35 small business concerns owned and controlled by women, and other 

36 small business concerns) to participate in the performance of con37 tracts let by the Federal agency. 

38 (B) CUMULATIVE FEDERAL AGENCY GOALS TO MEET OR EX39 CEED GOVERNMENTWIDE GOAL.—The Administrator and the Ad40 ministrator of the Office of Federal Procurement Policy shall, 

41 when exercising authority under subsection (b), ensure that the 


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1 cumulative annual prime contract goals for all Federal agencies 

2 meet or exceed the annual Governmentwide prime contract goal 

3 established by the President under this subsection. 

4 (5) PROCUREMENT PROCEDURES.— 

5 (A) IN GENERAL.—To facilitate the attainment of a goal for the 

6 participation of small business concerns owned and controlled by 

7 socially and economically disadvantaged individuals that is estab8 lished for a Federal agency under this subsection, the head of the 

9 Federal agency may enter into contracts using— 

10 (i) less than full and open competition by restricting the 

11 competition for such awards to small business concerns owned 

12 and controlled by socially and economically disadvantaged in13 dividuals; and 

14 (ii) a price evaluation preference not in excess of 10 per15 cent when evaluating an offer received from a small business 

16 concern owned and controlled by socially and economically 

17 disadvantaged individuals as the result of an unrestricted so18 licitation. 

19 (B) APPLICABILITY.—Subparagraph (A) does not apply to the 

20 Department of Defense, the Coast Guard, or the National Aero21 nautics and Space Administration. 

22 (C) IMPLEMENTATION THROUGH THE FEDERAL ACQUISITION

23 REGULATION.— 

24 (i) IN GENERAL.—The Federal Acquisition Regulation shall 

25 provide for uniform implementation of the authority provided 

26 in subparagraph (A). 

27 (ii) MATTERS TO BE ADDRESSED.—The provisions of the 

28 Federal Acquisition Regulation under clause (i) shall in29 clude— 

30 (I) conditions for the use of advance payments; 

31 (II) provisions for contract payment terms that pro32 vide for— 

33 (aa) accelerated payment for work performed dur34 ing the period for contract performance; and 

35 (bb) full payment for work performed; 

36 (III) guidance on how contracting officers may use, in 

37 solicitations for various classes of products or services, a 

38 price evaluation preference under subparagraph (A)(ii), 

39 to provide a reasonable advantage to small business con40 cerns owned and controlled by socially and economically 


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1 disadvantaged individuals without effectively eliminating 

2 any participation of other small business concerns; and 

3 (IV)(aa) procedures for a person to request the head 

4 of a Federal agency to determine whether the use of 

5 competitions restricted to small business concerns owned 

6 and controlled by socially and economically disadvan7 taged individuals at a contracting activity of the Federal 

8 agency has caused a particular industry category to bear 

9 a disproportionate share of the contracts awarded to at10 tain the goal established for that contracting activity; 

11 and 

12 (bb) guidance for limiting the use of such restricted 

13 competitions in the case of any contracting activity and 

14 class of contracts determined in accordance with such 

15 procedures to have caused a particular industry category 

16 to bear a disproportionate share of the contracts award17 ed to attain the goal established for that contracting ac18 tivity. 

19 (D) TERMINATION.—This paragraph shall cease to be effective 

20 at the end of September 30, 2003. 

21 (b) FEDERAL AGENCY GOALS.— 

22 (1) IN GENERAL.—The Administrator and the head of each Federal 

23 agency shall jointly establish goals for the participation by small busi24 ness concerns (including qualified HUBZone small business concerns, 

25 small business concerns owned and controlled by service-disabled vet26 erans, small business concerns owned and controlled by socially and 

27 economically disadvantaged individuals, small business concerns owned 

28 and controlled by women, and other small business concerns) in pro29 curement contracts of the Federal agency. 

30 (2) REQUIREMENTS.—The goals of a Federal agency established 

31 under paragraph (1) shall— 

32 (A) present, for that Federal agency, the maximum practicable 

33 opportunity for small business concerns (including qualified 

34 HUBZone small business concerns, small business concerns owned 

35 and controlled by service-disabled veterans, small business con36 cerns owned and controlled by socially and economically disadvan37 taged individuals, small business concerns owned and controlled by 

38 women, and other small business concerns) to participate in the 

39 performance of contracts let by the Federal agency; and 

40 (B) realistically reflect the potential of qualified HUBZone 

41 small business concerns, small business concerns owned and conVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00213 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 trolled by service-disabled veterans, small business concerns owned 

2 and controlled by socially and economically disadvantaged individ3 uals, small business concerns owned and controlled by women, and 

4 other small business concerns to perform such contracts and to 

5 perform subcontracts under such contracts. 

6 (3) DISAGREEMENT.—If the Administrator and the head of a Fed7 eral agency fail to agree on established goals, the disagreement shall 

8 be submitted to the Administrator for Federal Procurement Policy for 

9 final determination. 

10 (4) EXPANSION OF PARTICIPATION.— 

11 (A) IN GENERAL.—For the purpose of establishing goals under 

12 this section, the head of a Federal agency shall make consistent 

13 efforts to annually expand participation by small business concerns 

14 from each industry category in procurement contracts of the agen15 cy, including participation by qualified HUBZone small business 

16 concerns, small business concerns owned and controlled by service17 disabled veterans, small business concerns owned and controlled by 

18 socially and economically disadvantaged individuals, and small 

19 business concerns owned and controlled by women. 

20 (B) CONSIDERATIONS.—The head of a Federal agency, in at21 tempting to attain such participation, shall consider— 

22 (i) contracts awarded as the result of unrestricted competi23 tion; and 

24 (ii) contracts awarded after competition restricted to eligi25 ble small business concerns under this chapter and under the 

26 business development program. 

27 (c) REPORTING BY FEDERAL AGENCIES.— 

28 (1) IN GENERAL.—At the end of each fiscal year, the head of a Fed29 eral agency shall submit to the Administrator a report on the extent 

30 of participation by small business concerns (including qualified 

31 HUBZone small business concerns, small business concerns owned and 

32 controlled by service-disabled veterans, small business concerns owned 

33 and controlled by socially and economically disadvantaged individuals, 

34 small business concerns owned and controlled by veterans, small busi35 ness concerns owned and controlled by women, and other small busi36 ness concerns) in procurement contracts of the Federal agency. 

37 (2) CONTENTS.—A report under paragraph (1) shall contain appro38 priate justifications for failure to meet the goals under this section. 


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1 § 25107. No effect on certain small business setasides 

2 (a) IN GENERAL.—Nothing in this chapter or any other provision of law 

3 precludes exclusive small business setasides for procurements of architec4 tural and engineering services, research, development, test, and evaluation. 

5 (b) AUTHORITY.—A Federal agency may develop setasides described in 

6 subsection (a) to further the interests of small business in the areas de7 scribed in that subsection. 

8 § 25108. Mandatory contract reservation 

9 (a) IN GENERAL.—A contract for the purchase of a good or service that 

10 has an anticipated value greater than $2,500 but not greater than $100,000 

11 shall be reserved exclusively for small business concerns unless the con12 tracting officer is unable to obtain offers from 2 or more small business con13 cerns that are— 

14 (1) competitive with market prices; and 

15 (2) competitive with regard to the quality and delivery of the good 

16 or service being purchased. 

17 (b) CONSIDERATION OF TIMELY OFFERS.—In carrying out subsection 

18 (a), a contracting officer shall consider a responsive offer timely received 

19 from an eligible small business concern offeror. 

20 (c) EFFECT OF SECTION.—Nothing in this section precludes an award of 

21 a contract with a value not greater than $100,000 under— 

22 (1) division B of this subtitle; 

23 (2) section 2323 of title 10; 

24 (3) section 24903 of this title; or 

25 (4) section 25106(a)(4) of this title. 

26 § 25109. Offices of Small and Disadvantaged Business Utili27 zation 

28 (a) DEFINITIONS.—In this section: 

29 (1) DIRECTOR.—The term ‘‘Director’’ means the Director of Small 

30 and Disadvantaged Business Utilization of a Federal agency appointed 

31 under subsection (c). 

32 (2) OFFICE.—The term ‘‘Office’’ means the Office of Small and Dis33 advantaged Business Utilization of a Federal agency established by 

34 subsection (b). 

35 (b) ESTABLISHMENT OF OFFICES.—There is established in each Federal 

36 agency having procurement powers an office to be known as the Office of 

37 Small and Disadvantaged Business Utilization. 

38 (c) DIRECTOR.— 

39 (1) IN GENERAL.—The management of an Office shall be vested in 

40 an officer or employee of the Federal agency, appointed by the head 


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1 of the Federal agency, who shall be known as the Director of Small 

2 and Disadvantaged Business Utilization for the Federal agency. 

3 (2) LINE OF AUTHORITY.—The Director for a Federal agency shall 

4 be responsible only to, and report directly to, the head or deputy head 

5 of the Federal agency, except that the Director in the Department of 

6 Defense shall be responsible only to, and report directly to, the Sec7 retary of Defense or any other designee of the Secretary. 

8 (d) GENERAL RESPONSIBILITIES.—The Director for a Federal agency 

9 shall be responsible for the implementation and execution of the functions 

10 and duties under this chapter and divisions E and F that relate to the Fed11 eral agency. 

12 (e) DUTIES.—The Director for a Federal agency shall— 

13 (1)(A) identify proposed solicitations that involve significant bun14 dling of contract requirements; and 

15 (B) work with the agency acquisition officials and the Administrator 

16 to revise the procurement strategies for such proposed solicitations 

17 where appropriate to increase the probability of participation by small 

18 business concerns as prime contractors or to facilitate small business 

19 concern participation as subcontractors and suppliers, if a solicitation 

20 for a bundled contract is to be issued; and 

21 (2) assist small business concerns in obtaining payments, required 

22 late payment interest penalties, or information regarding payments due 

23 to small business concerns from an executive agency or a contractor, 

24 in conformity with chapter 39 of title 31 or any other protection for 

25 contractors or subcontractors (including suppliers) that is included in 

26 the Federal Acquisition Regulation or any individual agency supple27 ment to the Governmentwide regulation. 

28 (f) SUPERVISORY AUTHORITY.—The Director for a Federal agency shall 

29 have supervisory authority over personnel of the Federal agency to the ex30 tent that the functions and duties of those personnel relate to functions and 

31 duties under this chapter and divisions E and F. 

32 (g) SMALL BUSINESS TECHNICAL ADVISERS.— 

33 (1) ASSIGNMENT.—The Director for a Federal agency shall assign 

34 a small business technical adviser to each office to which the Adminis35 trator assigns a procurement center representative. 

36 (2) QUALIFICATIONS.—A small business technical adviser— 

37 (A) shall be a full-time employee of the procurement activity; 

38 and 

39 (B) shall be well qualified, technically trained, and familiar with 

40 the goods or services purchased at the procurement activity. 


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1 (3) PRINCIPAL DUTY.—The principal duty of a small business tech2 nical adviser shall be to assist the Administration procurement center 

3 representative in carrying out duties and functions relating to this 

4 chapter and divisions E and F. 

5 (h) COOPERATION AND CONSULTATION.—The Director for a Federal 

6 agency shall cooperate, and consult on a regular basis, with the Adminis7 trator with respect to carrying out the functions and duties described in 

8 subsection (d). 

9 (i) RECOMMENDATIONS CONCERNING AWARD OF CONTRACTS.— 

10 (1) IN GENERAL.—The Director for a Federal agency shall make 

11 recommendations to contracting officers concerning whether a par12 ticular contract requirement should be awarded pursuant to section 

13 25101 of this title, division E of this subtitle, or section 2323 of title 

14 10. 

15 (2) CONSIDERATIONS.—A recommendation under paragraph (1) 

16 shall be made with due regard to the requirements of sections 25111 

17 and 25112 of this title. 

18 (3) DOCUMENTATION OF FAILURE TO ACCEPT RECOMMENDATION.— 

19 The failure of a contracting officer to accept a recommendation under 

20 paragraph (1) shall be documented and included within the appropriate 

21 contract file. 

22 (j) APPLICABILITY OF SECTION.—This section does not apply to the Ad23 ministration. 

24 § 25110. Breakout procurement center representatives 

25 (a) DEFINITION OF MAJOR PROCUREMENT CENTER.—In this section, the 

26 term ‘‘major procurement center’’ means a procurement center that— 

27 (1) in the opinion of the Administrator, purchases substantial dollar 

28 amounts of other than commercial items; and 

29 (2) has the potential to incur significant savings as the result of the 

30 assignment of a breakout procurement center representative. 

31 (b) ASSIGNMENT OF BREAKOUT PROCUREMENT CENTER REPRESENTA32 TIVES.— 

33 (1) IN GENERAL.—The Administration shall assign to each major 

34 procurement center a breakout procurement center representative with 

35 such assistance as may be appropriate. 

36 (2) ADDITIONAL POSITION.—A breakout procurement center rep37 resentative shall be in addition to the procurement center representa38 tive referred to in section 25109(g)(1) of this title. 

39 (c) ADVOCACY.—A breakout procurement center representative shall be 

40 an advocate for— 


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1 (1) the breakout of items for procurement through full and open 

2 competition, whenever appropriate, while maintaining the integrity of 

3 the system in which items are used; and 

4 (2) the use of full and open competition, whenever appropriate, for 

5 the procurement of goods and services by a major procurement center. 

6 (d) FUNCTIONS.—In addition to carrying out the responsibilities assigned 

7 by the Administrator, a breakout procurement center representative may— 

8 (1)(A) attend any provisioning conference or similar evaluation ses9 sion during which determinations are made concerning whether require10 ments are to be procured through other than full and open competition; 

11 and 

12 (B) make recommendations with respect to those requirements to the 

13 members of the conference or session; 

14 (2)(A) review, at any time, restrictions on competition previously im15 posed on items through acquisition method coding or similar proce16 dures; and 

17 (B) recommend to personnel of the appropriate activity the prompt 

18 reevaluation of such limitations; 

19 (3)(A) review restrictions on competition arising out of restrictions 

20 on the rights of the United States in technical data; and 

21 (B) when appropriate, recommend that personnel of the appropriate 

22 activity initiate a review of the validity of such an asserted restriction; 

23 (4) obtain from any governmental source, and make available to per24 sonnel of the appropriate activity, technical data necessary for the 

25 preparation of a competitive solicitation package for any item of a good 

26 or service previously procured noncompetitively due to the unavail27 ability of such technical data; 

28 (5) have access to procurement records and other data of the major 

29 procurement center commensurate with the level of the breakout pro30 curement center representative’s approved security clearance classifica31 tion; 

32 (6)(A) receive unsolicited engineering proposals; and 

33 (B) when appropriate— 

34 (i)(I) conduct a value analysis of a proposal to determine wheth35 er the proposal, if adopted, will result in lower costs to the United 

36 States without substantially impeding legitimate acquisition objec37 tives; and 

38 (II) forward to personnel of the appropriate activity rec39 ommendations with respect to the proposal; or 

40 (ii) forward a proposal without analysis to personnel of the ac41 tivity responsible for reviewing such proposals, which personnel 


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1 shall furnish the breakout procurement center representative with 

2 information regarding the disposition of the proposal; and 

3 (7) review the systems that account for the acquisition and manage4 ment of technical data within the major procurement center to ensure 

5 that the systems provide the maximum availability and access to data 

6 that— 

7 (A) are needed for the preparation of offers to sell to the United 

8 States the goods and services to which the data pertain; and 

9 (B) potential offerors are entitled to receive. 

10 (e) APPEAL OF FAILURE TO ACT FAVORABLY ON RECOMMENDATION.— 

11 (1) IN GENERAL.—A breakout procurement center representative 

12 may appeal the failure to act favorably on any recommendation made 

13 under subsection (d). 

14 (2) PROCEDURE.—An appeal under paragraph (1) shall be filed and 

15 processed in the same manner and shall be subject to the same condi16 tions and limitations as an appeal filed by the Administrator under sec17 tion 25101(f)(5) of this title. 

18 (f) SMALL BUSINESS TECHNICAL ADVISERS.— 

19 (1) IN GENERAL.—The Administrator shall assign and co-locate at 

20 least 2 small business technical advisers to each major procurement 

21 center in addition to such other advisers as may be authorized from 

22 time to time. 

23 (2) DUTIES.—The sole duties of small business technical advisers as24 signed under paragraph (1) shall be— 

25 (A) to assist the breakout procurement center representative for 

26 the center to which the small business technical advisers are as27 signed in carrying out the functions described in subsection (d); 

28 and 

29 (B) to assist the procurement center representative for each of30 fice to which the Administrator assigns a procurement center rep31 resentative. 

32 (g) STATUS; QUALIFICATIONS.— 

33 (1) IN GENERAL.—A breakout procurement center representative 

34 and a small business technical adviser— 

35 (A) shall be full-time employees of the Administration; and 

36 (B) shall be fully qualified, technically trained, and familiar with 

37 the goods and services procured by the major procurement center 

38 to which the individual is assigned. 

39 (2) ACCREDITED ENGINEER.—In addition to the requirements of 

40 paragraph (1), a breakout procurement center representative and at 


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1 least one small business technical adviser assigned under this section 

2 shall be accredited engineers. 

3 (h) PERSONNEL POSITIONS.—The Administrator shall establish personnel 

4 positions for breakout procurement representatives and small business tech5 nical advisers assigned under this section that are classified at a grade level 

6 of the General Schedule sufficient to attract and retain highly qualified per7 sonnel. 

8 (i) FAMILIARIZATION SESSIONS.— 

9 (1) IN GENERAL.—At such times as the Administrator considers ap10 propriate, a breakout procurement center representative shall conduct 

11 familiarization sessions for contracting officers and other appropriate 

12 personnel of the major procurement center to which the breakout pro13 curement center representative is assigned. 

14 (2) PURPOSE.—A familiarization session shall acquaint the partici15 pants with, and instruct the participants in methods designed to fur16 ther the purposes of, this section. 

17 (j) BRIEFING AND REPORT.— 

18 (1) IN GENERAL.—A breakout procurement center representative 

19 shall prepare and personally deliver an annual briefing and report to 

20 the head of the major procurement center to which the breakout pro21 curement center representative is assigned. 

22 (2) CONTENTS.—A briefing and report under paragraph (1) shall— 

23 (A) detail the past and planned activities of the breakout pro24 curement center representative; and 

25 (B) contain such recommendations for improvement in the oper26 ation of the major procurement center as may be appropriate. 

27 (3) RESPONSE.—The head of the major procurement center shall— 

28 (A) personally receive the briefing and report; and 

29 (B) not later than 60 calendar days after receipt, respond, in 

30 writing, to each recommendation made by the breakout procure31 ment center representative. 

32 (k) STANDARDS FOR MEASURING COST SAVINGS FROM BREAKOUT PRO33 CUREMENT CENTER REPRESENTATIVES.—The Administrator and the 

34 Comptroller General shall jointly establish standards for measuring— 

35 (1) cost savings achieved through the efforts of breakout procure36 ment center representatives; and 

37 (2) the extent to which competition has been increased as a result 

38 of those efforts. 


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1 § 25111. Department of Defense, Coast Guard, and National 

2 Aeronautics and Space Administration contract 

3 goals 

4 A Federal agency subject to the requirements of section 2323 of title 10 

5 shall, when implementing those requirements— 

6 (1) establish policies and procedures that ensure that there will be 

7 no reduction in the number or dollar value of contracts awarded under 

8 this chapter or division E to achieve any goal or other program objec9 tive; and 

10 (2) ensure that those requirements will not alter or change the pro11 curement process used to implement this chapter or division E. 

12 § 25112. Actions by procurement center representatives to 

13 ensure compliance 

14 A procurement center representative assigned under section 25109 or 

15 25110 of this title, in addition to such other duties as the Administrator 

16 may assign, shall— 

17 (1) monitor the performance of the procurement activities to which 

18 the procurement center representative is assigned to ascertain the de19 gree of compliance with the requirements of section 25111 of this title; 

20 (2) report to the procurement center representative’s immediate su21 pervisors all instances of noncompliance with those requirements; and 

22 (3) increase, insofar as possible, the number and dollar value of pro23 curements that may be used for the programs established under this 

24 chapter, division E of this subtitle, and section 2323 of title 10. 

25 § 25113. Percentages of contract performance 

26 (a) IN GENERAL.—A concern may not be awarded a contract under sec27 tion 25101 of this title as a small business concern unless the concern 

28 agrees that— 

29 (1) in the case of a contract for services (except construction), at 

30 least 50 percent of the cost of contract performance incurred for per31 sonnel shall be expended for employees of the concern; 

32 (2) in the case of a contract for procurement of goods (other than 

33 procurement from a regular dealer in such goods), the concern will per34 form work for at least 50 percent of the cost of manufacturing the 

35 goods (not including the cost of materials). 

36 (b) CHANGE IN PERCENTAGE.—The Administrator may change the per37 centage under paragraph (1) or (2) of subsection (a) if the Administrator 

38 determines that a change is necessary to reflect conventional industry prac39 tices among business concerns that are below the numerical size standard 

40 for businesses in that industry category. 


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1 (c) REQUIREMENTS APPLICABLE TO OTHER CONTRACTS.—The Adminis2 trator shall establish, through public rulemaking, requirements similar to 

3 those specified in subsection (a) to be applicable to contracts for general and 

4 specialty construction and to contracts for any other industry category not 

5 otherwise subject to the requirements of that subsection. The percentage ap6 plicable to any such requirement shall be determined in accordance with 

7 subsection (b). 

8 CHAPTER 253—HUBZONE PROGRAM 

Sec. 

25301. Definitions. 

25302. Establishment of HUBZone program. 

25303. Sole source contracts. 

25304. Restricted competition. 

25305. Appeal of decision not to award contract. 

25306. Price evaluation preference in full and open competition. 

25307. Relationship to other contracting preferences. 

25308. Verification of eligibility. 

25309. Regulations. 

25310. List of qualified HUBZone small business concerns. 

25311. Penalties. 

9 § 25301. Definitions 

10 In this chapter: 

11 (1) BASE CLOSURE AREA.—The term ‘‘base closure area’’ means 

12 land within the external boundaries of a military installation that was 

13 closed through a privatization process under— 

14 (A) the Defense Base Closure and Realignment Act of 1990 

15 (part A of title XXIX of division B of Public Law 101–510; 10 

16 U.S.C. 2687 note); 

17 (B) title II of the Defense Authorization Amendments and Base 

18 Closure and Realignment Act (Public Law 100–526; 10 U.S.C. 

19 2687 note); 

20 (C) section 2687 of title 10; or 

21 (D) any other provision of law authorizing or directing the Sec22 retary of Defense or the Secretary of a military department to dis23 pose of real property at the military installation for purposes relat24 ing to base closures or redevelopment, while retaining the author25 ity to enter into a leaseback of all or a portion of the property 

26 for military use. 

27 (2) FULL AND OPEN COMPETITION.—The term ‘‘full and open com28 petition’’ has the meaning given the term in section 4 of the Office of 

29 Federal Procurement Policy Act (41 U.S.C. 403). 

30 (3) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The term 

31 ‘‘historically underutilized business zone’’ means an area located within 

32 one or more— 

33 (A) qualified census tracts; 


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1 (B) qualified nonmetropolitan counties; 

2 (C) areas of land within the external boundaries of an Indian 

3 reservation; 

4 (D) redesignated areas; or 

5 (E) base closure areas (until the date that is 5 years after the 

6 date of final closure of a base closure area). 

7 (4) HUBZONE.—The term ‘‘HUBZone’’ means a historically under8 utilized business zone. 

9 (5) HUBZONE SMALL BUSINESS CONCERN.—The term ‘‘HUBZone 

10 small business concern’’ means— 

11 (A) a small business concern that is at least 51 percent owned 

12 and controlled by United States citizens; 

13 (B) a small business concern that is— 

14 (i) an Alaska Native Corporation owned and controlled by 

15 Natives (as determined under section 29(e)(1) of the Alaska 

16 Native Claims Settlement Act (43 U.S.C. 1626(e)(1))); or 

17 (ii) a direct or indirect subsidiary corporation, joint ven18 ture, or partnership of an Alaska Native Corporation quali19 fying under section 29(e)(1) of the Alaska Native Claims Set20 tlement Act (43 U.S.C. 1626(e)(1)), if that subsidiary, joint 

21 venture, or partnership is owned and controlled by Natives 

22 (as determined under section 29(e)(2) of the Alaska Native 

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

24 (C) a small business concern— 

25 (i) that is wholly owned by one or more Indian tribal gov26 ernments, or by a corporation that is wholly owned by one or 

27 more Indian tribal governments; or 

28 (ii) that is owned in part by one or more Indian tribal gov29 ernments, or by a corporation that is wholly owned by one or 

30 more Indian tribal governments, if all other owners are either 

31 United States citizens or small business concerns; 

32 (D) a small business concern that is— 

33 (i) wholly owned by a community development corporation 

34 that has received financial assistance under part 1 of sub35 chapter A of the Community Economic Development Act of 

36 1981 (42 U.S.C. 9805 et seq.); or 

37 (ii) owned in part by one or more community development 

38 corporations, if all other owners are either United States citi39 zens or small business concerns; or 

40 (E) a small business concern that is— 


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1 (i) a small agricultural cooperative organized or incor2 porated in the United States; 

3 (ii) wholly owned by one or more small agricultural co4 operatives organized or incorporated in the United States; or 

5 (iii) owned in part by one or more small agricultural co6 operatives organized or incorporated in the United States, if 

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

9 (6) PROGRAM.—The term ‘‘program’’ means the HUBZone program. 

10 (7) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.— 

11 (A) IN GENERAL.—The term ‘‘qualified HUBZone small busi12 ness concern’’ means a small business concern— 

13 (i) that certifies in writing to the Administrator (or with 

14 respect to which the Administrator otherwise determines, 

15 based on information submitted to the Administrator by the 

16 small business concern, or based on certification procedures 

17 established under section 25309 of this title) that— 

18 (I) it is a HUBZone small business concern— 

19 (aa) under subparagraph (A), (B), (C), (D), or 

20 (E) of paragraph (5), and its principal office is lo21 cated in a HUBZone and not fewer than 35 percent 

22 of its employees reside in a HUBZone; or 

23 (bb) under paragraph (5)(C), and not fewer than 

24 35 percent of its employees engaged in performing 

25 a contract awarded to the small business concern on 

26 the basis of a preference provided under the 

27 HUBZone program reside within any Indian res28 ervation governed by one or more of the tribal gov29 ernment owners, or reside within any HUBZone ad30 joining any such Indian reservation; 

31 (II) the small business concern will attempt to main32 tain the applicable employment percentage under sub33 clause (I) during the performance of any contract award34 ed to the small business concern on the basis of a pref35 erence provided this chapter; and 

36 (III) with respect to any subcontract entered into by 

37 the small business concern under a contract awarded to 

38 the small business concern under this chapter, the small 

39 business concern will ensure that— 

40 (aa) in the case of a contract for a service (except 

41 construction), not less than 50 percent of the cost 


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1 of contract performance incurred for personnel will 

2 be expended for its employees or for employees of 

3 other HUBZone small business concerns; 

4 (bb) in the case of a contract for procurement of 

5 a supply (other than procurement from a regular 

6 dealer in the supply), not less than 50 percent of 

7 the cost of manufacturing the supply (not including 

8 the cost of material) will be incurred in connection 

9 with the performance of the contract in a HUBZone 

10 by one or more HUBZone small business concerns; 

11 (cc) in the case of a contract for general or spe12 cialty construction or a contract for any other in13 dustry category that is not otherwise subject to the 

14 requirements of item (aa) or (bb), the small busi15 ness concern meets requirements established by reg16 ulation under section 25309(b) of this title; and 

17 (dd) in the case of a contract for the procurement 

18 by the Secretary of Agriculture of an agricultural 

19 commodity, none of the commodity being procured 

20 will be obtained by the prime contractor through a 

21 subcontract for the purchase of the commodity in 

22 substantially the final form in which it is to be sup23 plied to the Government; and 

24 (ii) with respect to which no certification made or informa25 tion provided by the small business concern under clause (i) 

26 has been, in accordance with the procedures established under 

27 section 25308 of this title— 

28 (I) successfully challenged by an interested party; or 

29 (II) otherwise determined by the Administrator to be 

30 materially false. 

31 (B) CHANGE IN PERCENTAGES.—The Administrator may utilize 

32 a percentage other than the percentage specified in item (aa) or 

33 (bb) of subparagraph (A)(i)(III) if the Administrator determines 

34 that such action is necessary to reflect conventional industry prac35 tices among small business concerns that are below the numerical 

36 size standard for businesses in that industry category. 

37 (8) QUALIFIED NONMETROPOLITAN COUNTY.—The term ‘‘qualified 

38 nonmetropolitan county’’ means a county— 

39 (A) that was not located in a metropolitan statistical area (as 

40 defined in section 143(k)(2)(B) of the Internal Revenue Code of 

41 1986 (26 U.S.C. 143(k)(2)(B))) at the time of the most recent 


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1 census taken for purposes of selecting qualified census tracts 

2 under section 42(d)(5)(C)(ii) of the Internal Revenue Code of 

3 1986 (26 U.S.C. 42(d)(5)(C)(ii)); and 

4 (B) in which— 

5 (i) the median household income is less than 80 percent of 

6 the nonmetropolitan State median household income, based 

7 on the most recent data available from the Bureau of the 

8 Census of the Department of Commerce; 

9 (ii) the unemployment rate is not less than 140 percent of 

10 the average unemployment rate for the United States or for 

11 the State in which the county is located, whichever is less, 

12 based on the most recent data available from the Secretary 

13 of Labor; or 

14 (iii) there is located a difficult development area, as des15 ignated by the Secretary of Housing and Urban Development 

16 in accordance with section 42(d)(5)(C)(iii) of the Internal 

17 Revenue Code of 1986 (26 U.S.C. 42(d)(5)(C)(iii)), within 

18 Alaska, Hawaii, or any territory or possession of the United 

19 States outside the 48 contiguous States. 

20 (9) REDESIGNATED AREA.— 

21 (A) IN GENERAL.—Subject to subparagraph (B), the term ‘‘re22 designated area’’ means— 

23 (i) a census tract that was, but ceases to be, a qualified 

24 census tract; and 

25 (ii) a nonmetropolitan county that was, but ceases to be, 

26 a qualified nonmetropolitan county. 

27 (B) LIMITATION.—A census tract or nonmetropolitan county de28 scribed in subparagraph (A) shall cease to be a redesignated area 

29 on the later of— 

30 (i) the date on which the Bureau of the Census publicly re31 leases the first results from the 2010 decennial census; or 

32 (ii) 3 years after the date on which the census tract or non33 metropolitan county ceases to be a qualified census tract or 

34 qualified nonmetropolitan county. 

35 § 25302. Establishment of HUBZone program 

36 There is established within the Administration a program to be carried 

37 out by the Administrator, to be known as the HUBZone program, to pro38 vide for Federal contracting assistance to qualified HUBZone small busi39 ness concerns in accordance with this chapter. 


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1 § 25303. Sole source contracts 

2 Notwithstanding any other provision of law, a contracting officer may 

3 award a sole source contract under the program to a qualified HUBZone 

4 small business concern if— 

5 (1) the contracting officer or the Administrator determines that the 

6 qualified HUBZone small business concern is a responsible contractor 

7 with respect to performance of the contract opportunity; 

8 (2) the contracting officer does not have a reasonable expectation 

9 that 2 or more qualified HUBZone small business concerns will submit 

10 offers for the contracting opportunity; 

11 (3) the anticipated award price of the contract (including options) 

12 will not exceed— 

13 (A) $5,500,000 (subject to adjustment under section 35A of the 

14 Office of Federal Procurement Policy Act (41 U.S.C. 431a)), in 

15 the case of a contract opportunity assigned a North American In16 dustry Classification System code for manufacturing; or 

17 (B) $3,500,000 (subject to adjustment under section 35A of the 

18 Office of Federal Procurement Policy Act (41 U.S.C. 431a)), in 

19 the case of all other contract opportunities; and 

20 (4) in the estimation of the contracting officer, the contract award 

21 can be made at a fair and reasonable price. 

22 § 25304. Restricted competition 

23 Notwithstanding any other law, a contract opportunity shall be awarded 

24 under the program on the basis of competition restricted to qualified 

25 HUBZone small business concerns if the contracting officer has a reason26 able expectation that— 

27 (1) not fewer than 2 qualified HUBZone small business concerns will 

28 submit offers; and 

29 (2) the award can be made at a fair market price. 

30 § 25305. Appeal of decision not to award contract 

31 Notwithstanding any other law, not later than 5 days after the date on 

32 which the Administrator is notified of a decision by a contracting officer of 

33 a Federal agency not to award a contract opportunity under the program 

34 to a qualified HUBZone small business concern, the Administrator may no35 tify the contracting officer of the intent to appeal the contracting officer’s 

36 decision, and within 15 days after that date the Administrator may file a 

37 written request for reconsideration of the contracting officer’s decision with 

38 the head of the Federal agency. 


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1 § 25306. Price evaluation preference in full and open com2 petition 

3 (a) IN GENERAL.—Subject to subsection (b), in a case in which a con4 tract is to be awarded on the basis of full and open competition, the price 

5 offered by a qualified HUBZone small business concern shall be deemed to 

6 be lower than the price offered by another offeror (other than another small 

7 business concern) if the price offered by the qualified HUBZone small busi8 ness concern is not more than 10 percent higher than the price offered by 

9 the otherwise lowest, responsive, and responsible offeror. 

10 (b) AGRICULTURAL COMMODITIES.— 

11 (1) IN GENERAL.—In the case of a purchase by the Secretary of Ag12 riculture of agricultural commodities, the price evaluation preference 

13 shall be— 

14 (A) 10 percent for the portion of a contract to be awarded that 

15 is not greater than 25 percent of the total volume being procured 

16 for each agricultural commodity in a single invitation; 

17 (B) 5 percent for the portion of a contract to be awarded that 

18 is greater than 25 percent, but not greater than 40 percent, of the 

19 total volume being procured for each agricultural commodity in a 

20 single invitation; and 

21 (C) zero, for the portion of a contract to be awarded that is 

22 greater than 40 percent of the total volume being procured for 

23 each agricultural commodity in a single invitation. 

24 (2) TREATMENT OF PREFERENCE.—A contract awarded to a quali25 fied HUBZone small business concern under a preference described in 

26 paragraph (1) shall not be counted toward the fulfillment of any re27 quirement partially set aside for competition restricted to small busi28 ness concerns. 

29 (3) INTERNATIONAL FOOD AID EXPORT OPERATIONS.—The price 

30 evaluation preference for a purchase of an agricultural commodity by 

31 the Secretary of Agriculture for export operations through an inter32 national food aid program administered by the Farm Service Agency 

33 shall be 5 percent on the first portion of a contract to be awarded that 

34 is not greater than 20 percent of the total volume of each agricultural 

35 commodity being procured in a single invitation. 

36 § 25307. Relationship to other contracting preferences 

37 A procurement may not be made from a source on the basis of a pref38 erence under the program if the procurement would otherwise be made from 

39 a different source under— 

40 (1) section 4124 or 4125 of title 18; or 

41 (2) the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). 


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1 § 25308. Verification of eligibility 

2 (a) IN GENERAL.—In carrying out this chapter, the Administrator shall 

3 establish procedures relating to— 

4 (1) the filing, investigation, and disposition by the Administrator of 

5 any challenge to the eligibility of a small business concern to receive 

6 assistance under the program (including a challenge, filed by an inter7 ested party, relating to the veracity of a certification made or informa8 tion provided to the Administrator by a small business concern under 

9 section 25301(7) of this title); and 

10 (2) verification by the Administrator of the accuracy of any certifi11 cation made or information provided to the Administration by a small 

12 business concern under section 25301(7) of this title. 

13 (b) EXAMINATIONS.—The procedures established under subsection (a) 

14 may provide for program examinations (including random program examina15 tions) by the Administrator of any small business concern making a certifi16 cation or providing information to the Administrator under section 25301(7) 

17 of this title. 

18 (c) PROVISION OF DATA.—On the request of the Administrator, the Sec19 retary of Labor, the Secretary of Housing and Urban Development, and the 

20 Secretary of the Interior (or the Assistant Secretary for Indian Affairs) 

21 shall promptly provide to the Administrator such information as the Admin22 istrator determines to be necessary to carry out this section. 

23 § 25309. Regulations 

24 (a) CERTIFICATION PROCEDURES.—The Administrator shall by regula25 tion establish procedures for the certification of a small business concern 

26 as a qualified HUBZone small business concern. 

27 (b) CONSTRUCTION CONTRACTS AND OTHER CONTRACTS.—The Adminis28 trator shall by regulation establish requirements that are similar to the re29 quirements specified in items (aa) and (bb) of section 25301(7)(A)(i)(III) 

30 of this title on contracts for general and specialty construction and contracts 

31 for any other industry category that would not otherwise be subject to those 

32 requirements. The percentage applicable to any such requirement shall be 

33 determined in accordance with section 25301(7)(B) of this title. 

34 § 25310. List of qualified HUBZone small business concerns 

35 The Administrator shall establish and maintain a list of qualified 

36 HUBZone small business concerns, which list, to the extent practicable— 

37 (1) after the Administrator makes the certification required by sec38 tion 25301(7)(A)(i) of this title regarding a qualified HUBZone small 

39 business concern and determines that subparagraph section 

40 25301(7)(A)(ii) of this title does not apply to that qualified HUBZone 


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1 small business concern, shall include the name, address, and type of 

2 business with respect to each such small business concern; 

3 (2) shall be updated by the Administrator not less than annually; 

4 and 

5 (3) on request, shall be provided to any Federal agency or other enti6 ty. 

7 § 25311. Penalties 

8 In addition to the penalties described in section 10504 of this title, a 

9 small business concern that is determined by the Administrator to have mis10 represented the status of that small business concern as a HUBZone small 

11 business concern for purposes of this section shall be subject to— 

12 (1) section 1001 of title 18; and 

13 (2) sections 3729 to 3733 of title 31. 

14 CHAPTER 255—SMALL BUSINESS CONCERNS OWNED 

15 AND CONTROLLED BY SERVICE-DISABLED VETERANS 

Sec. 

25501. Sole source contracts. 

25502. Restricted competition. 

25503. Relationship to other contracting preferences. 

25504. Provision of data. 

25505. Verification of eligibility. 

25506. Penalties. 

16 § 25501. Sole source contracts 

17 A contracting officer may award a sole source contract to any small busi18 ness concern owned and controlled by service-disabled veterans if— 

19 (1) the Administrator determines that the small business concern 

20 owned and controlled by service-disabled veterans is a responsible con21 tractor with respect to performance of the contract opportunity; 

22 (2) the contracting officer does not have a reasonable expectation 

23 that 2 or more small business concerns owned and controlled by serv24 ice-disabled veterans will submit offers for the contracting opportunity; 

25 (3) the anticipated award price of the contract (including options) 

26 will not exceed— 

27 (A) $5,000,000, in the case of a contract opportunity assigned 

28 a North American Industry Classification System code for manu29 facturing; or 

30 (B) $3,000,000, in the case of any other contract opportunity; 

31 and 

32 (4) in the estimation of the contracting officer, the contract award 

33 can be made at a fair and reasonable price. 

34 § 25502. Restricted competition 

35 A contracting officer may award a contract on the basis of competition 

36 restricted to small business concerns owned and controlled by service-dis37 abled veterans if the contracting officer has a reasonable expectation that— 


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1 (1) not fewer than 2 small business concerns owned and controlled 

2 by service-disabled veterans will submit offers; and 

3 (2) the award can be made at a fair market price. 

4 § 25503. Relationship to other contracting preferences 

5 A procurement may not be made from a source on the basis of a pref6 erence provided under section 25501 or 25502 of this title if the procure7 ment would otherwise be made from a different source under— 

8 (1) section 4124 or 4125 of title 18; or 

9 (2) the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). 

10 § 25504. Provision of data 

11 On the request of the Administrator, the head of any Federal agency 

12 shall promptly provide to the Administrator such information as the Admin13 istrator determines to be necessary to carry out this chapter. 

14 § 25505. Verification of eligibility 

15 (a) IN GENERAL.—In carrying out this chapter, the Administrator shall 

16 establish procedures relating to— 

17 (1) the filing, investigation, and disposition by the Administrator of 

18 any challenge to the eligibility of a small business concern to receive 

19 assistance under this subsection (including a challenge, filed by an in20 terested party, relating to the veracity of a certification made or infor21 mation provided to the Administration by a small business concern); 

22 and 

23 (2) verification by the Administrator of the accuracy of any certifi24 cation made or information provided to the Administration by a small 

25 business concern. 

26 (b) EXAMINATIONS.—The procedures established under subsection (a) 

27 may provide for program examinations (including random program examina28 tions) by the Administrator of any small business concern making a certifi29 cation or providing information to the Administrator. 

30 § 25506. Penalties 

31 In addition to the penalties described in section 10504 of this title, a 

32 small business concern that is determined by the Administrator to have mis33 represented the status of the small business concern as a small business 

34 concern owned and controlled by service-disabled veterans for purposes of 

35 this chapter shall be subject to— 

36 (1) section 1001 of title 18; and 

37 (2) sections 3729 to 3733 of title 31. 

38 CHAPTER 257—SMALL BUSINESS CONCERNS OWNED 

39 AND CONTROLLED BY WOMEN 

Sec. 

25701. Definition of small business concern owned and controlled by women. 

25702. Restricted competition. 


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25703. Identification of industries. 

25704. Provision of data. 

25705. Verification of eligibility. 

25706. Penalties. 

1 § 25701. Definition of small business concern owned and 

2 controlled by women 

3 In this chapter, the term ‘‘small business concern owned and controlled 

4 by women’’ has the meaning given the term in section 10101 of this title, 

5 except that ownership shall be determined without regard to any community 

6 property law. 

7 § 25702. Restricted competition 

8 (a) IN GENERAL.—A contracting officer may restrict competition for any 

9 contract for the procurement of a good or service by the Federal Govern10 ment to small business concerns owned and controlled by women if— 

11 (1) each of the small business concerns owned and controlled by 

12 women is not less than 51 percent owned by one or more women who 

13 are economically disadvantaged (for which purpose ownership shall be 

14 determined without regard to any community property law); 

15 (2) the contracting officer has a reasonable expectation that 2 or 

16 more small business concerns owned and controlled by economically dis17 advantaged women will submit offers for the contract; 

18 (3) the contract is for the procurement of a good or service with re19 spect to an industry identified by the Administrator under section 

20 25703 of this title; 

21 (4) the anticipated award price of the contract (including options) 

22 does not exceed— 

23 (A) $5,000,000, in the case of a contract assigned a North 

24 American Industry Classification System code for manufacturing; 

25 or 

26 (B) $3,000,000, in the case of any other contract; 

27 (5) in the estimation of the contracting officer, the contract award 

28 can be made at a fair and reasonable price; and 

29 (6) each of the small business concerns owned and controlled by 

30 women— 

31 (A) is certified by a Federal agency, a State government, or a 

32 national certifying entity approved by the Administrator, as a 

33 small business concern owned and controlled by women; or 

34 (B)(i) certifies to the contracting officer that it is a small busi35 ness concern owned and controlled by women; and 

36 (ii) provides adequate documentation, in accordance with stand37 ards established by the Administrator, to support the certification. 

38 (b) WAIVER.—The Administrator may waive subsection (a)(1) with re39 spect to a small business concern owned and controlled by women if the AdVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00232 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 ministrator determines that the small business concern owned and controlled 

2 by women is in an industry in which small business concerns owned and 

3 controlled by women are substantially underrepresented. 

4 § 25703. Identification of industries 

5 The Administrator shall conduct a study to identify industries in which 

6 small business concerns owned and controlled by women are underrep7 resented with respect to Federal procurement contracting. 

8 § 25704. Provision of data 

9 On the request of the Administrator, the head of a Federal agency shall 

10 promptly provide to the Administrator such information as the Adminis11 trator determines to be necessary to carry out this chapter. 

12 § 25705. Verification of eligibility 

13 (a) IN GENERAL.—In carrying out this chapter, the Administrator shall 

14 establish procedures relating to— 

15 (1) the filing, investigation, and disposition by the Administrator of 

16 any challenge to the eligibility of a small business concern to receive 

17 assistance under this chapter (including a challenge, filed by an inter18 ested party, relating to the veracity of a certification made or informa19 tion provided to the Administrator by a small business concern under 

20 section 25702(a)(6) of this title); and 

21 (2) verification by the Administrator of the accuracy of any certifi22 cation made or information provided to the Administrator by a small 

23 business concern under section 25702(a)(6) of this title. 

24 (b) EXAMINATIONS.—The procedures established under subsection (a) 

25 may provide for program examinations (including random program examina26 tions) by the Administrator of any small business concern making a certifi27 cation or providing information to the Administrator under section 

28 25702(a)(6) of this title. 

29 § 25706. Penalties 

30 In addition to the penalties described in section 10504 of this title, a 

31 small business concern that is determined by the Administrator to have mis32 represented the status of the small business concern as a small business 

33 concern owned and controlled by women for purposes of this chapter shall 

34 be subject to— 

35 (1) section 1001 of title 18; and 

36 (2) sections 3729 to 3733 of title 31. 

37 DIVISION H—RESEARCH AND DEVELOPMENT 

38 CHAPTER 261—GENERAL PROVISIONS 

Sec. 

26101. Definitions. 

26102. Assistance to small business concerns. 

26103. Federal agency cooperation. 

26104. Joint research and development programs. 


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1 § 26101. Definitions 

2 In this division: 

3 (1) COMMERCIAL APPLICATION.—The term ‘‘commercial application’’ 

4 includes testing and evaluation of products, services, or technologies for 

5 use in technical or weapons systems. 

6 (2) COOPERATIVE RESEARCH AND DEVELOPMENT.—The term ‘‘coop7 erative research and development’’ means research or research and de8 velopment conducted jointly by a small business concern and a research 

9 institution in which not less than 40 percent of the work is performed 

10 by the small business concern and not less than 30 percent of the work 

11 is performed by the research institution. 

12 (3) EXTRAMURAL BUDGET.— 

13 (A) IN GENERAL.—The term ‘‘extramural budget’’, in reference 

14 to the extramural budget of a Federal agency, means the sum of 

15 the total obligations minus amounts obligated for research or re16 search and development by employees of the Federal agency in or 

17 through Government-owned, Government-operated facilities. 

18 (B) APPLICABILITY TO DEPARTMENT OF ENERGY.—As applied 

19 with respect to the Department of Energy, the term ‘‘extramural 

20 budget’’ does not include amounts obligated for atomic energy de21 fense programs solely for weapons activities or for naval reactor 

22 programs. 

23 (C) APPLICABILITY TO AGENCY FOR INTERNATIONAL DEVELOP24 MENT.—As applied to the Agency for International Development, 

25 the term ‘‘extramural budget’’ does not include amounts obligated 

26 solely for general institutional support of international research 

27 centers or for grants to foreign countries. 

28 (4) FEDERAL AGENCY.— 

29 (A) IN GENERAL.—The term ‘‘Federal agency’’ means— 

30 (i) an executive agency (as defined in section 105 of title 

31 5); or 

32 (ii) a military department. 

33 (B) EXCLUSION.—The term ‘‘Federal agency’’ does not include 

34 an agency within the Intelligence Community (as defined in sec35 tion 3.4(f) of Executive Order 12333 (50 U.S.C. 401 note) (or any 

36 successor Executive order)). 

37 (5) FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTER.— 

38 The term ‘‘Federally funded research and development center’’ means 

39 a federally funded research and development center identified by the 

40 National Scientific Foundation in accordance with the Governmentwide 

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1 fice of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) (or any 

2 successor regulation). 

3 (6) FIRST PHASE.—The term ‘‘first phase’’— 

4 (A) with respect to an SBIR, means the phase described in 

5 paragraph (13)(A); and 

6 (B) with respect to an STTR, means the phase described in 

7 paragraph (14)(A). 

8 (7) FUNDING AGREEMENT.—The term ‘‘funding agreement’’ means 

9 a contract, grant, or cooperative agreement entered into between a 

10 Federal agency and a small business concern for the performance of 

11 experimental, developmental, or research work funded in whole or in 

12 part by the Federal Government. 

13 (8) RESEARCH INSTITUTION.— 

14 (A) IN GENERAL.—The term ‘‘research institution’’ means a 

15 nonprofit institution (as defined in section 4 of the Stevenson16 Wydler Technology Innovation Act of 1980 (15 U.S.C. 3703)). 

17 (B) INCLUSION.—The term ‘‘research institution’’ includes a 

18 federally funded research and development center. 

19 (9) RESEARCH OR RESEARCH AND DEVELOPMENT.—The term ‘‘re20 search or research and development’’ means an activity that is— 

21 (A) a systematic, intensive study directed toward greater knowl22 edge or understanding of the subject studied; 

23 (B) a systematic study directed specifically toward applying new 

24 knowledge to meet a recognized need; or 

25 (C) a systematic application of knowledge toward the production 

26 of useful materials, devices, and systems or methods, including de27 sign, development, and improvement of prototypes and new proc28 esses to meet specific requirements. 

29 (10) SBIR.—The term ‘‘SBIR’’ means a small business innovation 

30 research program. 

31 (11) SBIR AGENCY.—The term ‘‘SBIR agency’’ means a Federal 

32 agency that is required by section 26301 of this title to have an SBIR. 

33 (12) SECOND PHASE.—The term ‘‘second phase’’— 

34 (A) with respect to an SBIR, means the phase described in 

35 paragraph (13)(B); and 

36 (B) with respect to an STTR, means the phase described in 

37 paragraph (14)(B). 

38 (13) SMALL BUSINESS INNOVATION RESEARCH PROGRAM.—The term 

39 ‘‘small business innovation research program’’ means a program under 

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1 ment effort is reserved for award to small business concerns through 

2 a uniform process having— 

3 (A) a first phase for determining, insofar as possible, the sci4 entific and technical merit and feasibility of ideas that appear to 

5 have commercial potential, as described in subparagraph (B), sub6 mitted pursuant to SBIR solicitations; 

7 (B) a second phase, to further develop proposals that meet par8 ticular program needs, in which awards shall be made based on 

9 the scientific and technical merit and feasibility of the proposals, 

10 as evidenced by the first phase, considering, among other things, 

11 the proposal’s commercial potential, as evidenced by— 

12 (i) the small business concern’s record of successfully com13 mercializing SBIR or other research; 

14 (ii) the existence of second phase funding commitments 

15 from private sector or non-SBIR funding sources; 

16 (iii) the existence of third phase, follow-on commitments for 

17 the subject of the research; and 

18 (iv) the presence of other indicators of the commercial po19 tential of the idea; and 

20 (C) where appropriate, a third phase— 

21 (i) in which commercial applications of SBIR-funded re22 search or research and development are funded— 

23 (I) by non-Federal sources of capital; or 

24 (II) for products or services intended for use by the 

25 Federal Government, by follow-on non-SBIR Federal 

26 funding awards; or 

27 (ii) for which awards from non-SBIR Federal funding 

28 sources are used for the continuation of research or research 

29 and development that has been competitively selected using 

30 peer review or scientific review criteria. 

31 (14) SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM.—The 

32 term ‘‘small business technology transfer program’’ means a program 

33 under which a portion of a Federal agency’s extramural research or re34 search and development effort is reserved for award to small business 

35 concerns for cooperative research and development through a uniform 

36 process having— 

37 (A) a first phase, to determine, to the extent possible, the sci38 entific, technical, and commercial merit and feasibility of ideas 

39 submitted pursuant to STTR solicitations; 

40 (B) a second phase, to further develop proposed ideas to meet 

41 particular program needs, in which awards shall be made based on 


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1 the scientific, technical, and commercial merit and feasibility of 

2 the idea, as evidenced by the first phase and by other relevant in3 formation; and 

4 (C) where appropriate, a third phase— 

5 (i) in which commercial applications of STTR-funded re6 search or research and development are funded— 

7 (I) by non-Federal sources of capital; or 

8 (II) for products or services intended for use by the 

9 Federal Government, by follow-on non-STTR Federal 

10 funding awards; and 

11 (ii) for which awards from non-STTR Federal funding 

12 sources are used for the continuation of research or research 

13 and development that has been competitively selected using 

14 peer review or scientific review criteria. 

15 (15) STTR.—The term ‘‘STTR’’ means a small business technology 

16 transfer program. 

17 (16) STTR AGENCY.—The term ‘‘STTR agency’’ means a Federal 

18 agency that is required by section 26321 of this title to have an STTR. 

19 (17) THIRD PHASE.—The term ‘‘third phase’’— 

20 (A) with respect to an SBIR, means the phase described in 

21 paragraph (13)(C); and 

22 (B) with respect to an STTR, means the phase described in 

23 paragraph (14)(C). 

24 (18) THIRD PHASE AGREEMENT.—The term ‘‘third phase agree25 ment’’ means a follow-on, non-SBIR-funded contract or non-STTR26 funded contract described in paragraph (13)(C) or (14)(C). 

27 § 26102. Assistance to small business concerns 

28 The Administrator shall— 

29 (1) assist small business concerns in obtaining Government contracts 

30 for research and development; 

31 (2) assist small business concerns in obtaining the benefits of re32 search and development performed under Government contracts or at 

33 Government expense; 

34 (3) provide technical assistance to small business concerns to accom35 plish the purposes of this division; 

36 (4) develop and maintain a source file and an information program 

37 to assure each qualified and interested small business concern the op38 portunity to participate in Federal agency SBIRs and STTRs; 

39 (5) coordinate with participating Federal agencies a schedule for re40 lease of SBIR and STTR solicitations, and prepare a master release 


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1 schedule so as to maximize the opportunity of small business concerns 

2 to respond to solicitations; 

3 (6) independently survey and monitor the operation of SBIRs and 

4 STTRs within participating Federal agencies; and 

5 (7) provide for and fully implement the tenets of Executive Order 

6 No. 13329 (Encouraging Innovation in Manufacturing). 

7 § 26103. Federal agency cooperation 

8 The Administrator may consult and cooperate with, and make studies and 

9 recommendations to, all Federal agencies and the Government Account10 ability Office, and a Federal agency or the Government Accountability Of11 fice shall cooperate with the Administrator in order to carry out and to ac12 complish the purposes of this division. 

13 § 26104. Joint research and development programs 

14 (a) IN GENERAL.—The Administrator may consult with representatives 

15 of small business concerns with a view to assisting and encouraging small 

16 business concerns in undertaking joint programs for research and develop17 ment carried out through such corporate or other mechanism as may be 

18 most appropriate for the purpose. 

19 (b) PURPOSES.—A joint program under subsection (a) may, among other 

20 things, include the purposes of— 

21 (1) constructing, acquiring, or establishing a laboratory or other fa22 cility for the conduct of research; 

23 (2) undertaking and utilizing applied research; 

24 (3) collecting research information related to a particular industry 

25 and disseminating the information to participating members; 

26 (4) conducting applied research on a protected, proprietary, and con27 tractual basis with member or nonmember concerns, Government agen28 cies, and others; 

29 (5) prosecuting applications for patents and rendering patent serv30 ices for participating members; and 

31 (6) negotiating and granting licenses under patents held under the 

32 joint program and establishing corporations designed to exploit par33 ticular patents obtained by the joint venture. 

34 (c) APPROVAL OF AGREEMENTS.—After consultation with the Attorney 

35 General and the Chairman of the Federal Trade Commission, and with the 

36 prior written approval of the Attorney General, the Administrator may ap37 prove an agreement between small business concerns providing for a joint 

38 program of research and development if the Administrator determines that 

39 the joint program proposed will maintain and strengthen the free enterprise 

40 system and the economy of the Nation. 


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1 (d) WITHDRAWAL OF APPROVAL.—The Administrator or the Attorney 

2 General may at any time withdraw approval of the agreement and the joint 

3 program of research and development covered by the agreement if the Ad4 ministrator or Attorney General determines that the agreement or the joint 

5 program is no longer in the best interests of the competitive free enterprise 

6 system and the economy of the Nation. 

7 (e) PUBLICATION IN FEDERAL REGISTER.—A copy of an approval or dis8 approval and of any determination made under subsection (c) or (d) shall 

9 be published in the Federal Register. 

10 (f) NONDELEGABILITY.—The authority of the Administrator under this 

11 section may not be delegated. 

12 (g) NO VIOLATION OF ANTITRUST LAWS OR FEDERAL TRADE COMMIS13 SION ACT.— 

14 (1) IN GENERAL.—Subject to paragraph (2), no act or omission to 

15 act pursuant to and within the scope of a joint program for research 

16 and development under an agreement approved by the Administrator 

17 under this section shall be within the prohibitions of the antitrust laws 

18 or the Federal Trade Commission Act (15 U.S.C. 41 et seq.). 

19 (2) WITHDRAWAL OF APPROVAL.—On publication in the Federal 

20 Register of the notice of withdrawal of approval of an agreement grant21 ed under this section, by the Administrator or by the Attorney General, 

22 this section shall not apply to any subsequent act or omission to act 

23 by reason of the agreement or the approval. 

24 CHAPTER 263—SBIRs AND STTRs 

Subchapter I—SBIRs 

Sec. 

26301. Federal agency SBIRs. 

26302. Administration of SBIRs by Federal agencies. 

26303. Funding agreement goals. 

26304. SBIR policy directives. 

26305. Discretionary technical assistance. 

26306. Coordination of technology development programs. 

26307. Purchase of American-made equipment and products. 

26308. Use of Department of Agriculture extramural budget funds. 

26309. Commercialization pilot program. 

26310. Reports by Federal agencies. 

26311. Termination. 

Subchapter II—STTRs 

26321. Federal agency STTRs. 

26322. Administration of STTRs by Federal agencies. 

26323. STTR policy directive. 

26324. STTR model agreement for intellectual property rights. 

Subchapter III—Provisions Relating to Both SBIRs and 

STTRs 

26341. Database. 

26342. Third phase agreements. 

26343. Inclusion of SBIR and STTR information in strategic plans. 

26344. Simplified reporting requirements. 


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26345. Federal and State Technology Partnership program. 

26346. Second phase and third phase awards for testing and evaluation of products, services, 

and technologies for use in a technical or weapons system. 

26347. Innovation in energy efficiency 

1 Subchapter I—SBIRs 

2 § 26301. Federal agency SBIRs 

3 (a) SBIR BUDGET.—A Federal agency that has an extramural budget for 

4 research or research and development in excess of $100,000,000 for any fis5 cal year shall expend with small business concerns not less than 2.5 percent 

6 of the extramural budget specifically in connection with an SBIR that meets 

7 the requirements of this division (including policy directives under section 

8 26304 of this title). 

9 (b) LIMITATIONS.—An SBIR agency shall not— 

10 (1) use any of its SBIR budget established under subsection (a) for 

11 the purpose of funding administrative costs of the program, including 

12 costs associated with salaries and expenses; or 

13 (2) make available for the purpose of meeting the requirements of 

14 subsection (a) an amount of its extramural budget for basic research 

15 that exceeds the percentage specified in subsection (a). 

16 (c) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—A funding agree17 ment with a small business concern for research or research and develop18 ment that results from a competitive or single source selection other than 

19 an SBIR shall not be considered to meet any portion of the percentage re20 quirement of subsection (a). 

21 § 26302. Administration of SBIRs by Federal agencies 

22 (a) IN GENERAL.—An SBIR agency shall, in accordance with this divi23 sion (including policy directives under section 26304 of this title)— 

24 (1) unilaterally determine categories of projects to be in its SBIR; 

25 (2) issue SBIR solicitations in accordance with a schedule deter26 mined cooperatively with the Administrator; 

27 (3) unilaterally determine research topics within the SBIR agency’s 

28 SBIR solicitations, giving special consideration to broad research topics 

29 and to topics that further one or more critical technologies, as identi30 fied by— 

31 (A) the National Critical Technologies Panel in the reports re32 quired under section 603 of the National Science and Technology 

33 Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 6683) 

34 (as in effect before January 1, 2001); or 

35 (B) the Secretary of Defense, in the reports required under sec36 tion 2522 of title 10 (as in effect before February 10, 1996); 

37 (4) unilaterally receive and evaluate proposals resulting from SBIR 

38 proposals; 

39 (5) subject to section 26310(b) of this title— 


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1 (A) unilaterally select awardees for its SBIR funding agree2 ments; and 

3 (B) inform each awardee under a funding agreement, to the ex4 tent possible, of the expenses of the awardee that will be allowable 

5 under the funding agreement; 

6 (6) administer its own SBIR funding agreements (or delegate such 

7 administration to another Federal agency); 

8 (7)(A) make payments to recipients of SBIR funding agreements on 

9 the basis of progress toward or completion of the funding agreement 

10 requirements; and 

11 (B) in all cases, make payment to recipients under such agreements 

12 in full, subject to audit, on or before the last day of the 12-month pe13 riod beginning on the date of completion of the funding agreement re14 quirements; 

15 (8)(A) include a section on its SBIR in its annual performance plan 

16 required by subsections (a) and (b) of section 1115 of title 31; and 

17 (B) submit that section to the Committee on Small Business and 

18 Entrepreneurship of the Senate and the Committee on Science and 

19 Committee on Small Business of the House of Representatives; 

20 (9) collect, and maintain in a common format in accordance with 

21 section 26344 of this title, such information from awardees as is nec22 essary to assess the SBIR, including information necessary to maintain 

23 the database under section 26341 of this title; and 

24 (10) provide for and fully implement the tenets of Executive Order 

25 No. 13329 (Encouraging Innovation in Manufacturing). 

26 (b) RESEARCH AND DEVELOPMENT FOCUS.— 

27 (1) REVISION AND UPDATE OF CRITERIA AND PROCEDURES OF

28 IDENTIFICATION.—In carrying out subsection (a), the Secretary of De29 fense shall, not less often than once every 4 years, revise and update 

30 the criteria and procedures used to identify areas of the research and 

31 development efforts of the Department of Defense that are suitable for 

32 the provision of funds under the SBIR and the STTR of the Depart33 ment of Defense. 

34 (2) USE OF PLANS.—The criteria and procedures described in para35 graph (1) shall be developed through the use of the most current 

36 versions of the following plans: 

37 (A) The Joint Warfighting Science and Technology Plan re38 quired under section 270 of the National Defense Authorization 

39 Act for Fiscal Year 1997 (10 U.S.C. 2501 note; Public Law 104– 

40 201). 


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1 (B) The Defense Technology Area Plan of the Department of 

2 Defense. 

3 (C) The Basic Research Plan of the Department of Defense. 

4 (3) INPUT IN IDENTIFICATION OF AREAS OF EFFORT.—The criteria 

5 and procedures described in paragraph (1) shall include input in the 

6 identification of areas of research and development efforts described in 

7 that paragraph from Department of Defense program managers and 

8 program executive officers. 

9 § 26303. Funding agreement goals 

10 (a) IN GENERAL.—A Federal agency that has a budget for research or 

11 research and development in excess of $20,000,000 for any fiscal year shall 

12 establish goals specifically for funding agreements for research or research 

13 and development to small business concerns. 

14 (b) NO BACKSLIDING.—No goal established by a Federal agency under 

15 subsection (a) shall be less than the percentage of the Federal agency’s re16 search or research and development budget expended under funding agree17 ments with small business concerns in the immediately preceding fiscal year. 

18 § 26304. SBIR policy directives 

19 (a) IN GENERAL.—The Administrator, after consultation with the Admin20 istrator of the Office of Federal Procurement Policy, the Director of the Of21 fice of Science and Technology Policy, and the Intergovernmental Affairs 

22 Division of the Office of Management and Budget, shall issue policy direc23 tives for the general conduct of the SBIRs within the Federal Government. 

24 (b) MATTERS TO BE PROVIDED FOR.—Policy directives under subsection 

25 (a) shall provide for— 

26 (1) simplified, standardized, and timely SBIR solicitations; 

27 (2) a simplified, standardized funding process that provides for— 

28 (A) the timely receipt and review of proposals; 

29 (B) outside peer review for at least phase two proposals, if ap30 propriate; 

31 (C) protection of proprietary information provided in proposals; 

32 (D) selection of awardees; 

33 (E) retention by a small business concern of the rights to data 

34 generated by the small business concern in the performance of an 

35 SBIR award for a period of not less than 4 years; 

36 (F) transfer of title to property provided by a Federal agency 

37 to a small business concern if such a transfer would be more cost 

38 effective than recovery of the property by the Federal agency; 

39 (G) cost sharing; and 

40 (H) cost principles and payment schedules; 


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1 (3) exemptions from the policy directives under paragraph (2) if na2 tional security or intelligence functions clearly would be jeopardized; 

3 (4) minimizing the regulatory burden associated with participation in 

4 an SBIR for a small business concern so as to stimulate the cost-effec5 tive conduct of Federal research and development and the likelihood of 

6 commercialization of the results of research and development conducted 

7 under the SBIR; 

8 (5) the submission by a Federal agency to the Administrator and the 

9 Office of Science and Technology Policy of a simplified, standardized, 

10 and timely annual report on its SBIR; 

11 (6) standardized and orderly withdrawal from SBIR participation by 

12 a Federal agency; 

13 (7) the voluntary participation in an SBIR by a Federal agency not 

14 required by section 26301 of this title to have an SBIR; 

15 (8) continued use by a small business concern participating in the 

16 third phase of an SBIR, as a directed bailment, of any property trans17 ferred by a Federal agency to the small business concern in the second 

18 phase of an SBIR for a period of not less than 2 years, beginning on 

19 the initial date of the small business concern’s participation in the third 

20 phase of an SBIR; 

21 (9) procedures to ensure, to the extent practicable, that a Federal 

22 agency that intends to pursue research, development, or production of 

23 a technology developed by a small business concern under an SBIR en24 ters into a follow-on, non-SBIR funding agreement with the small busi25 ness concern for the research, development, or production; 

26 (10) limits in the amounts of funds that a Federal agency may 

27 award of $100,000 in the first phase of an SBIR and $750,000 in the 

28 second phase of an SBIR, adjusted once every 5 years to reflect eco29 nomic adjustments and programmatic considerations; 

30 (11) a process for notifying SBIR agencies and potential SBIR par31 ticipants of the critical technologies, as identified— 

32 (A) by the National Critical Technologies Panel in accordance 

33 with section 603 of the National Science and Technology Policy, 

34 Organization, and Priorities Act of 1976 (42 U.S.C. 6683) (as in 

35 effect before January 1, 2001); or 

36 (B) by the Secretary of Defense in accordance with section 

37 2522 of title 10 (as in effect before February 10, 1996); 

38 (12)(A) enhanced outreach efforts to increase the participation of 

39 small business concerns owned and controlled by socially and economi40 cally disadvantaged individuals and the participation of small business 


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1 concerns owned and controlled by women in technological innovation 

2 and in SBIRs, including the third phase of SBIRs; and 

3 (B) the collection of data to document that participation; 

4 (13) technical and programmatic guidance to encourage Federal 

5 agencies to develop gap-funding programs to address the delay between 

6 an award for the first phase of an SBIR and the application for and 

7 extension of an award for the second phase of the SBIR; 

8 (14) procedures to ensure that a small business concern that submits 

9 a proposal for a funding agreement for the first phase of an SBIR and 

10 that has received more than 15 second phase SBIR awards during the 

11 preceding 5 fiscal years is able to demonstrate the extent to which the 

12 small business concern was able to secure third phase funding to de13 velop concepts resulting from previous second phase SBIR awards; 

14 (15) the requirement of a succinct commercialization plan with each 

15 application for a second phase SBIR award that is moving toward com16 mercialization; 

17 (16) a requirement that a Federal agency report to the Adminis18 trator, not less frequently than annually, all instances in which the 

19 Federal agency pursued research, development, or production of a tech20 nology developed by a small business concern using an award made 

21 under the SBIR of the Federal agency and determined that it was not 

22 practicable to enter into a follow-on non-SBIR funding agreement with 

23 the small business concern; and 

24 (17) implementation of section 26344 of this title, including estab25 lishing standardized procedures for the provision of information under 

26 section 26341(c) of this title. 

27 (c) PHASED WITHDRAWAL FROM SBIR PROGRAM.—At the discretion of 

28 the Administrator, the policy directive under subsection (b)(6) may require 

29 a phased withdrawal over a period of time sufficient in duration to minimize 

30 any adverse impact on small business concerns. 

31 (d) RIGHTS TO DATA.—The rights provided for under subsection 

32 (b)(1)(E) shall apply to all Federal funding awards under this division, in33 cluding first phase, second phase, and third phase awards. 

34 (e) REPORTS ON IMPRACTICABILITY OF FOLLOW-ON AGREEMENTS.—A 

35 report under subsection (b)(16) shall include, at a minimum— 

36 (1) the reasons why the follow-on funding agreement with the small 

37 business concern was not practicable; 

38 (2) the identity of the entity with which the Federal agency con39 tracted to perform the research, development, or production; and 

40 (3) a description of the type of funding agreement under which the 

41 research, development, or production was obtained. 


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1 § 26305. Discretionary technical assistance 

2 (a) IN GENERAL.—An SBIR agency may enter into an agreement with 

3 a vendor selected under subsection (b) to provide small business concerns 

4 engaged in SBIR projects with technical assistance services, such as access 

5 to a network of scientists and engineers engaged in a wide range of tech6 nologies or access to technical and business literature available through on7 line data bases, for the purpose of assisting the small business concerns 

8 in— 

9 (1) making better technical decisions concerning the projects; 

10 (2) solving technical problems that arise during the conduct of the 

11 projects; 

12 (3) minimizing technical risks associated with the projects; and 

13 (4) developing and commercializing new commercial products and 

14 processes resulting from the projects. 

15 (b) VENDOR SELECTION.— 

16 (1) IN GENERAL.—An SBIR agency may select a vendor to assist 

17 small business concerns in meeting the goals listed in subsection (a) 

18 for a term not to exceed 3 years. 

19 (2) COMPETITION.—Selection of a vendor shall be competitive and 

20 shall use merit-based criteria. 

21 (c) ADDITIONAL TECHNICAL ASSISTANCE.— 

22 (1) FIRST PHASE.—An SBIR agency may provide services described 

23 in subsection (a) to first phase SBIR award recipients in an amount 

24 equal to not more than $4,000, which shall be in addition to the 

25 amount of the recipient’s award. 

26 (2) SECOND PHASE.—An SBIR agency described in subsection (a) 

27 may authorize any second phase SBIR award recipient to purchase, 

28 with funds available from its SBIR awards, services described in sub29 section (a), in an amount equal to not more than $4,000 per year. 

30 § 26306. Coordination of technology development programs 

31 (a) DEFINITION OF TECHNOLOGY DEVELOPMENT PROGRAM.—In this 

32 section, the term ‘‘technology development program’’ means— 

33 (1) the Experimental Program to Stimulate Competitive Research of 

34 the National Science Foundation, as established under section 113 of 

35 the National Science Foundation Authorization Act of 1988 (42 U.S.C. 

36 1862g); 

37 (2) the Defense Experimental Program to Stimulate Competitive Re38 search of the Department of Defense; 

39 (3) the Experimental Program to Stimulate Competitive Research of 

40 the Department of Energy; 


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1 (4) the Experimental Program to Stimulate Competitive Research of 

2 the Environmental Protection Agency; 

3 (5) the Experimental Program to Stimulate Competitive Research of 

4 the National Aeronautics and Space Administration; 

5 (6) the Institutional Development Award Program of the National 

6 Institutes of Health; and 

7 (7) the National Research Initiative Competitive Grants Program of 

8 the Department of Agriculture. 

9 (b) COORDINATION REQUIREMENTS.—A Federal agency that is subject to 

10 section 26301 of this title and that has established a technology develop11 ment program may, in each fiscal year, review for funding under the tech12 nology development program— 

13 (1) a proposal to provide outreach and assistance to one or more 

14 small business concerns interested in participating in the Federal agen15 cy’s SBIR (including a proposal to make a grant or loan to a business 

16 concern to pay a portion or all of the cost of developing an SBIR pro17 posal) from an entity, organization, or individual located in— 

18 (A) a State that is eligible to participate in the technology devel19 opment program; or 

20 (B) a State described in subsection (c); or 

21 (2) a proposal for the first phase of the SBIR program (if the pro22 posal, though meritorious, is not funded through the SBIR program for 

23 that fiscal year due to funding restraints) from a small business con24 cern located in— 

25 (A) a State that is eligible to participate in the technology devel26 opment program; or 

27 (B) a State described in subsection (c). 

28 (c) ADDITIONALLY ELIGIBLE STATE.—A State referred to in paragraph 

29 (1)(B) or (2)(B) of subsection (b) is a State in which the total value of con30 tracts awarded to small business concerns under all SBIRs is less than the 

31 total value of contracts awarded to small business concerns in a majority 

32 of other States, as determined by the Administrator in even-numbered fiscal 

33 years, based on the most recent statistics compiled by the Administrator. 

34 § 26307. Purchase of American-made equipment and prod35 ucts 

36 (a) PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS.—It is 

37 the sense of Congress that an entity that is awarded a funding agreement 

38 under the SBIR of a Federal agency should, when purchasing any equip39 ment or a product with funds provided through the funding agreement, pur40 chase only American-made equipment and products, to the extent possible 

41 in keeping with the overall purposes of the SBIR. 


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1 (b) NOTICE TO SBIR AWARDEES.—A Federal agency that awards a 

2 funding agreement under an SBIR shall provide to each recipient of such 

3 an award a notice describing the sense of the Congress stated in subsection 

4 (a). 

5 § 26308. Use of Department of Agriculture extramural budg6 et funds 

7 All funds appropriated that are determined to be part of the extramural 

8 budget of the Department of Agriculture for any fiscal year for purposes 

9 of meeting the requirements of this division shall be available for funding 

10 agreements with small business concerns for any purpose in furtherance of 

11 the SBIR of the Department of Agriculture. Such funds may be transferred 

12 for that purpose from one appropriation account to another or to a single 

13 account. 

14 § 26309. Commercialization pilot program 

15 (a) IN GENERAL.—The Secretary of Defense and each Secretary of a 

16 military department may create and administer a commercialization pilot 

17 program to accelerate the transition of technologies, products, and services 

18 developed under the SBIR of the Department of Defense or of the military 

19 department to the third phase, including the acquisition process. 

20 (b) IDENTIFICATION OF RESEARCH PROGRAMS FOR ACCELERATED

21 TRANSITION TO ACQUISITION PROCESS.—In carrying out a commercializa22 tion pilot program, the Secretary of Defense and the Secretary of each mili23 tary department shall identify research programs of an SBIR that have the 

24 potential for rapid transitioning to the third phase and into the acquisition 

25 process. 

26 (c) LIMITATION.—No research program of a military department may be 

27 identified under subsection (b) unless the Secretary of the military depart28 ment certifies in writing that the successful transition of the research pro29 gram to the third phase and into the acquisition process is expected to meet 

30 high priority military requirements of the military department. 

31 (d) FUNDING.— 

32 (1) IN GENERAL.—For payment of expenses incurred to administer 

33 the commercialization pilot program under this subsection, the Sec34 retary of Defense and a Secretary of a military department may use 

35 not more than an amount equal to one percent of the funds available 

36 to the Department of Defense or the military department under an 

37 SBIR. 

38 (2) USE OF FUNDS.—Funds used as described in paragraph (1)— 

39 (A) shall not be subject to the limitations on the use of funds 

40 in section 26301(b) of this title; and 

41 (B) shall not be used to make third phase awards. 


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1 (e) EVALUATIVE REPORT.— 

2 (1) IN GENERAL.—At the end of each fiscal year, the Secretary of 

3 Defense shall submit to the Committee on Armed Services and Com4 mittee on Small Business and Entrepreneurship of the Senate and the 

5 Committee on Armed Services and Committee on Small Business of the 

6 House of Representatives an evaluative report regarding activities 

7 under the commercialization pilot program. 

8 (2) CONTENTS.—A report under paragraph (1) shall include— 

9 (A) an accounting of the funds used in the commercialization 

10 pilot program; 

11 (B) a detailed description of the commercialization pilot pro12 gram, including incentives and activities undertaken by acquisition 

13 program managers, program executive officers, and prime contrac14 tors; and 

15 (C) a detailed compilation of results achieved by the commer16 cialization pilot program, including the number of small business 

17 concerns assisted and the number of projects commercialized. 

18 (f) SUNSET.—A commercialization pilot program under this section shall 

19 terminate at the end of fiscal year 2009. 

20 § 26310. Reports by Federal agencies 

21 (a) ANNUAL REPORT.—An SBIR agency shall annually submit to the Ad22 ministrator and the Office of Science and Technology Policy a report on the 

23 Federal agency’s SBIR. 

24 (b) REPORTING OF AWARDS MADE FROM SINGLE PROPOSALS, AWARDS

25 TO MULTIPLE AWARD WINNERS, AND AWARDS TO CRITICAL TECHNOLOGY

26 TOPICS.— 

27 (1) SINGLE PROPOSAL.—If an SBIR agency makes an award with 

28 respect to an SBIR solicitation topic or subtopic for which the Federal 

29 agency received only one proposal, the SBIR agency shall provide writ30 ten justification for making the award in its next quarterly report to 

31 the Administrator and in the SBIR agency’s next annual report re32 quired under subsection (a). 

33 (2) MULTIPLE AWARDS.—An SBIR agency shall include in its next 

34 annual report required under subsection (a) an accounting of the 

35 awards that the SBIR agency has made for the first phase of its SBIR 

36 during the reporting period to entities that have received more than 15 

37 awards for the second phase of the SBIR during the preceding 5 fiscal 

38 years. 

39 (3) CRITICAL TECHNOLOGY AWARDS.— 

40 (A) IN GENERAL.—An SBIR agency shall include in its next an41 nual report required under subsection (a) an accounting of the 


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1 number of awards that the SBIR agency has made to critical tech2 nology topics described in section 26302(3) of this title. 

3 (B) CONTENTS.—An accounting under subparagraph (A) 

4 shall— 

5 (i) include an identification of the specific critical tech6 nologies topics; and 

7 (ii) disclose the percentage by number and dollar amount 

8 of the SBIR agency’s total SBIR awards to critical tech9 nology topics. 

10 (c) NUMBER AND DOLLAR AMOUNT OF AWARDS.— 

11 (1) IN GENERAL.—A Federal agency required by section 26301 of 

12 this title to have an SBIR or to establish goals shall annually submit 

13 to the Administrator a report that discloses— 

14 (A) the number of awards pursuant to grants, contracts, or co15 operative agreements over $10,000 in amount; and 

16 (B) the dollar value of all such awards. 

17 (2) CONTENTS.—A report under paragraph (1) shall identify SBIR 

18 awards and compare the number and amount of those awards with 

19 awards to other than small business concerns. 

20 (3) CALCULATION OF EXTRAMURAL BUDGET.— 

21 (A) METHODOLOGY.—Not later than 4 months after the date 

22 of enactment of each appropriations Act for an SBIR agency, the 

23 SBIR agency shall submit to the Administrator a report that in24 cludes a description of the methodology used for calculating the 

25 amount of the extramural budget of that SBIR agency. 

26 (B) ADMINISTRATOR’S ANALYSIS.—The Administrator shall in27 clude an analysis of the methodology received from each SBIR 

28 agency in the report required by section 10710(a) of this title. 

29 § 26311. Termination 

30 The authorization to carry out an SBIR under this chapter terminates 

31 on September 30, 2008. 

32 Subchapter II—STTRs 

33 § 26321. Federal agency STTRs 

34 (a) STTR BUDGET.—With respect to each fiscal year through fiscal year 

35 2009, a Federal agency that has an extramural budget for research or re36 search and development in excess of $1,000,000,000 for the fiscal year shall 

37 expend with small business concerns not less than 0.3 percent, specifically 

38 in connection with an STTR that meets the requirements of this division 

39 (including any policy directive under section 26323 of this title). 

40 (b) LIMITATIONS.—A Federal agency shall not— 


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1 (1) use any of its STTR budget established under subsection (a) for 

2 the purpose of funding— 

3 (A) administrative costs of the STTR program, including costs 

4 associated with salaries and expenses; or 

5 (B) in the case of a small business concern or a research insti6 tution, costs associated with salaries, expenses, and administrative 

7 overhead (other than direct or indirect costs allowable under 

8 guidelines of the Office of Management and Budget and the Gov9 ernmentwide Federal Acquisition Regulation issued under section 

10 25(c)(1) of the Office of Federal Procurement Policy Act (41 

11 U.S.C. 421(c)(1))); or 

12 (2) make available for the purpose of meeting the requirements of 

13 subsection (a) an amount of its extramural budget for basic research 

14 that exceeds the percentage specified in subsection (a). 

15 (c) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—A funding agree16 ment with a small business concern for research or research and develop17 ment that results from a competitive or single source selection other than 

18 an STTR shall not be considered to meet any portion of the percentage re19 quirement of subsection (a). 

20 § 26322. Administration of STTRs by Federal agencies 

21 An STTR agency shall— 

22 (1) unilaterally determine categories of projects to be included in its 

23 STTR; 

24 (2) issue STTR solicitations in accordance with a schedule deter25 mined cooperatively with the Administrator; 

26 (3) unilaterally determine research topics within the Federal agency’s 

27 STTR solicitations, giving special consideration to broad research top28 ics and to topics that further one or more critical technologies, as iden29 tified by— 

30 (A) the National Critical Technologies Panel in the reports re31 quired under section 603 of the National Science and Technology 

32 Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 6683) 

33 (as in effect before January 1, 2001); or 

34 (B) the Secretary of Defense, in the reports required under sec35 tion 2522 of title 10 (as in effect before February 10, 1996); 

36 (4) unilaterally receive and evaluate proposals resulting from STTR 

37 solicitations; 

38 (5)(A) unilaterally select awardees for its STTR funding agreements; 

39 and 


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1 (B) inform each awardee under a funding agreement, to the extent 

2 possible, of the expenses of the awardee that will be allowable under 

3 the funding agreement; 

4 (6) administer its own STTR funding agreements (or delegate such 

5 administration to another Federal agency); 

6 (7)(A) make payments to recipients of STTR funding agreements on 

7 the basis of progress toward or completion of the funding agreement 

8 requirements; and 

9 (B) in all cases, make payment to recipients under funding agree10 ments in full, subject to audit, on or before the last day of the 12- 

11 month period beginning on the date of the completion of the funding 

12 agreement requirements; 

13 (8)(A) include as part of its annual performance plan as required by 

14 subsections (a) and (b) of section 1115 of title 31 a section on its 

15 STTR; and 

16 (B) submit that section to the Committee on Small Business of the 

17 Senate and the Committee on Science and the Committee on Small 

18 Business of the House of Representatives; 

19 (9) collect such information from awardees as is necessary to assess 

20 STTR outputs and outcomes; 

21 (10) adopt the agreement developed by the Administrator under sec22 tion 26324 of this title as the STTR agency’s model agreement for al23 locating between small business concerns and research institutions— 

24 (A) intellectual property rights; and 

25 (B) rights, if any, to carry out follow-on research, development, 

26 or commercialization; 

27 (11) develop, in consultation with the Office of Federal Procurement 

28 Policy and the Office of Government Ethics, procedures to ensure that 

29 federally funded research and development centers that participate in 

30 STTR agreements— 

31 (A) are free from organizational conflicts of interests relative to 

32 the program; 

33 (B) do not use privileged information gained through work per34 formed for an STTR agency or private access to STTR agency 

35 personnel in the development of an STTR proposal; and 

36 (C) use outside peer review, as appropriate; 

37 (12) develop procedures for assessing the commercial merit and fea38 sibility of STTR proposals, as evidenced by— 

39 (A) the small business concern’s record of successfully commer40 cializing STTR or other research; 


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1 (B) the existence of second phase funding commitments from 

2 private sector or non-STTR funding sources; 

3 (C) the existence of third phase follow-on commitments for the 

4 subject of the research; and 

5 (D) the presence of other indicators of the commercial potential 

6 of the idea; 

7 (13) implement an outreach program to research institutions and 

8 small business concerns for the purpose of enhancing its STTR, in con9 junction with any such outreach done for purposes of the STTR agen10 cy’s SBIR; 

11 (14) collect, and maintain in a common format in accordance with 

12 section 26344 of this title, such information from awardees as is nec13 essary to assess its STTR, including information necessary to maintain 

14 the database under section 26341 of this title; 

15 (15) annually submit to the Administrator and the Office of Science 

16 and Technology Policy a report on its STTR; and 

17 (16) provide for and fully implement the tenets of Executive Order 

18 No. 13329 (Encouraging Innovation in Manufacturing). 

19 § 26323. STTR policy directive 

20 (a) ISSUANCE.—The Administrator shall issue a policy directive for the 

21 general conduct of the STTRs within the Federal Government. 

22 (b) CONSULTATION.—The STTR policy directive shall be issued after 

23 consultation with— 

24 (1) the heads of each of the STTR agencies; 

25 (2) the Under Secretary of Commerce for Intellectual Property and 

26 Director of the United States Patent and Trademark Office; and 

27 (3) the Director of the Office of Federal Procurement Policy. 

28 (c) CONTENTS.—The policy directive required by subsection (a) shall pro29 vide for— 

30 (1) simplified, standardized, and timely STTR solicitations; 

31 (2) a simplified, standardized funding process that provides for— 

32 (A) the timely receipt and review of proposals; 

33 (B) outside peer review, if appropriate; 

34 (C) protection of proprietary information provided in proposals; 

35 (D) selection of awardees; 

36 (E) retention by a small business concern of the rights to data 

37 generated by the small business concern in the performance of an 

38 STTR award for a period of not less than 4 years; 

39 (F) continued use by a small business concern, as a directed 

40 bailment, of any property transferred by a Federal agency to the 

41 small business concern in the second phase of the Federal agency’s 


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1 STTR for a period of not less than 2 years, beginning on the ini2 tial date of the small business concern’s participation in the third 

3 phase of the STTR; 

4 (G) cost sharing; 

5 (H) cost principles and payment schedules; and 

6 (I)(i) one-year awards for the first phase of an STTR, generally 

7 not to exceed $100,000, greater or lesser amounts to be awarded 

8 at the discretion of the awarding Federal agency, and shorter or 

9 longer periods of time to be approved at the discretion of the 

10 awarding agency where appropriate for a particular project; and 

11 (ii) 2-year awards for the second phase of the STTR, generally 

12 not to exceed $750,000, greater or lesser amounts to be awarded 

13 at the discretion of the awarding Federal agency, and shorter or 

14 longer periods of time to be approved at the discretion of the 

15 awarding agency where appropriate for a particular project; 

16 (3) minimizing the regulatory burdens associated with participation 

17 in an STTR; 

18 (4) guidelines for a model agreement, to be used by all Federal agen19 cies, for allocating between small business concerns and research insti20 tutions— 

21 (A) intellectual property rights; and 

22 (B) rights, if any, to carry out follow-on research, development, 

23 or commercialization; 

24 (5) procedures to ensure that— 

25 (A) a recipient of an STTR award is a small business concern; 

26 and 

27 (B) the small business concern exercises management and con28 trol of the performance of the STTR funding agreement under a 

29 business plan providing for the commercialization of the tech30 nology that is the subject matter of the award; and 

31 (6) procedures to ensure, to the extent practicable, that a Federal 

32 agency that intends to pursue research, development, or production of 

33 a technology developed by a small business concern under an STTR en34 ters into a follow-on, non-STTR funding agreement with the small 

35 business concern for the research, development, or production. 

36 (d) RIGHTS TO DATA.—The rights provided for under subsection 

37 (c)(2)(E) shall apply to all Federal funding awards under this division, in38 cluding first phase, second phase, and third phase awards. 


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1 § 26324. STTR model agreement for intellectual property 

2 rights 

3 (a) IN GENERAL.—The Administrator shall promulgate regulations estab4 lishing a single model agreement for use in an STTR that allocates between 

5 small business concerns and research institutions— 

6 (1) intellectual property rights; and 

7 (2) rights, if any, to carry out follow-on research, development, or 

8 commercialization. 

9 (b) OPPORTUNITY FOR COMMENT.—In promulgating regulations under 

10 subsection (a), the Administrator shall provide to affected Federal agencies, 

11 small business concerns, research institutions, and other interested parties 

12 the opportunity to submit written comments. 

13 Subchapter III—Provisions Relating to Both SBIRs and 

14 STTRs 

15 § 26341. Database 

16 (a) PUBLIC DATABASE.—The Administrator shall develop, maintain, and 

17 make available to the public a searchable, up-to-date, electronic database 

18 that includes— 

19 (1) the name, size, location, and an identifying number assigned by 

20 the Administrator of each small business concern that has received a 

21 first phase or second phase SBIR or STTR award from a Federal 

22 agency; 

23 (2) a description of each first phase or second phase SBIR or STTR 

24 award received by that small business concern, including— 

25 (A) an abstract of the project funded by the award, excluding 

26 any information identified by the small business concern as propri27 etary information; 

28 (B) the Federal agency making the award; and 

29 (C) the date and amount of the award; 

30 (3) an identification of any business concern or subsidiary estab31 lished for the commercial application of a product or service for which 

32 an SBIR or STTR award is made; 

33 (4) information regarding mentors and mentoring networks, as re34 quired by section 26345(f)(3) of this title; and 

35 (5) with respect to assistance under STTR— 

36 (A) whether the small business concern or the research institu37 tion initiated their collaboration on each assisted STTR project; 

38 (B) whether the small business concern or the research institu39 tion originated any technology relating to the assisted STTR 

40 project; 


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1 (C) the length of time it took to negotiate any licensing agree2 ment between the small business concern and the research institu3 tion under each assisted STTR project; and 

4 (D) how the proceeds from commercialization, marketing, or 

5 sale of technology resulting from each assisted STTR project were 

6 allocated (by percentage) between the small business concern and 

7 the research institution. 

8 (b) GOVERNMENT DATABASE.— 

9 (1) IN GENERAL.—The Administrator, in consultation with SBIR 

10 agencies and STTR agencies, shall develop and maintain a database 

11 that— 

12 (A) contains for each second phase award made by a Federal 

13 agency— 

14 (i) information collected in accordance with subsection (c) 

15 on revenue from the sale of new products or services resulting 

16 from the research conducted under the award; 

17 (ii) information collected in accordance with subsection (c) 

18 on additional investment from any source, other than first 

19 phase or second phase SBIR or STTR awards, to further the 

20 research and development conducted under the award; and 

21 (iii) any other information received in connection with the 

22 award that the Administrator, in conjunction with the SBIR 

23 and STTR managers of Federal agencies, considers relevant 

24 and appropriate; 

25 (B) includes any narrative information that a small business 

26 concern receiving a second phase award voluntarily submits to fur27 ther describe the outputs and outcomes of its awards; 

28 (C) includes for each applicant for a first phase or second phase 

29 award that does not receive such an award— 

30 (i) the name, size, and location, and an identifying number 

31 assigned by the Administration; 

32 (ii) an abstract of the project; and 

33 (iii) the Federal agency to which the application was made; 

34 and 

35 (D) includes any other data collected by or available to any Fed36 eral agency that the Federal agency considers may be useful for 

37 SBIR or STTR evaluation. 

38 (2) USE.—The database under paragraph (1) shall be available for 

39 use solely— 

40 (A) for program evaluation purposes by the Federal Govern41 ment; or 


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1 (B) in accordance with policy directives issued by the Adminis2 trator, by other authorized persons that are subject to a use and 

3 nondisclosure agreement with the Federal Government covering 

4 the use of the database. 

5 (c) UPDATING OF INFORMATION.— 

6 (1) IN GENERAL.—A small business concern applying for a second 

7 phase award under this division shall be required to update information 

8 in the database established under this section for any prior second 

9 phase award received by that small business concern. 

10 (2) APPORTIONMENT.—In complying with this subsection, a small 

11 business concern may apportion sales or additional investment informa12 tion relating to more than one second phase award among those 

13 awards, if the small business concern notes the apportionment for each 

14 award. 

15 (3) UPDATES AT TERMINATION.— 

16 (A) IN GENERAL.—A small business concern receiving a second 

17 phase award under this division shall update information in the 

18 database concerning that award at the termination of the award 

19 period. 

20 (B) VOLUNTARY UPDATES.—The Administrator shall request a 

21 small business concern described in subparagraph (A) to volun22 tarily update such information described in subparagraph (A) an23 nually after termination for a period of 5 years. 

24 (d) PROTECTION OF INFORMATION.—Information provided under sub25 section (b) or (c) shall be considered privileged and confidential and not 

26 subject to disclosure under section 552 of title 5. 

27 (e) EFFECT OF INCLUSION OF INFORMATION IN DATABASE.—Inclusion 

28 of information in the database under this section shall not be considered 

29 to be publication for purposes of subsection (a) or (b) of section 102 of title 

30 35. 

31 § 26342. Third phase agreements 

32 (a) IN GENERAL.—In the case of a small business concern that is award33 ed a funding agreement for the second phase of an SBIR or STTR, a Fed34 eral agency may enter into a third phase agreement with the small business 

35 concern for additional work to be performed during or after the second 

36 phase period. 

37 (b) PROCEDURES.—The second phase funding agreement with the small 

38 business concern may, at the discretion of the Federal agency awarding the 

39 agreement, set out the procedures applicable to third phase agreements with 

40 that Federal agency or any other Federal agency. 


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1 (c) INTELLECTUAL PROPERTY RIGHTS.—A funding agreement under an 

2 SBIR or STTR shall include provisions setting forth the respective rights 

3 of the United States and the small business concern with respect to— 

4 (1) intellectual property rights; and 

5 (2) any right to carry out follow-on research. 

6 § 26343. Inclusion of SBIR and STTR information in stra7 tegic plans 

8 Program information relating to SBIRs and STTRs shall be included by 

9 a Federal agency in any update or revision required of the Federal agency 

10 under section 306(b) of title 5. 

11 § 26344. Simplified reporting requirements 

12 (a) IN GENERAL.—The Administrator shall work with SBIR agencies and 

13 STTR agencies to standardize reporting requirements for the collection of 

14 data from SBIR or STTR applicants and awardees, including data for in15 clusion in the database under section 26341 of this title, taking into consid16 eration the unique needs of each Federal agency, and to the extent possible, 

17 permitting the updating of previously reported information by electronic 

18 means. 

19 (b) MINIMIZATION OF BURDEN.—The reporting requirements described 

20 in subsection (a) shall be designed to minimize the burden on small business 

21 concerns. 

22 § 26345. Federal and State Technology Partnership program 

23 (a) DEFINITIONS.—In this section: 

24 (1) APPLICANT.—The term ‘‘applicant’’ means an entity, organiza25 tion, or individual that submits a proposal for an award or a coopera26 tive agreement under this section. 

27 (2) BUSINESS ADVICE AND COUNSELING.—The term ‘‘business ad28 vice and counseling’’ means advice and assistance on matters described 

29 in subsection (f) to small business concerns to guide small business 

30 concerns through the SBIR and STTR process, from application to 

31 award and successful completion of each phase of an SBIR or STTR. 

32 (3) FAST PROGRAM.—The term ‘‘FAST program’’ means the Fed33 eral and State Technology Partnership program established under sub34 section (b). 

35 (4) MENTOR.—The term ‘‘mentor’’ means an individual described in 

36 subsection (f). 

37 (5) MENTORING NETWORK.—The term ‘‘mentoring network’’ means 

38 an association, organization, coalition, or other entity (including an in39 dividual) that meets the requirements of subsection (f). 


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1 (6) RECIPIENT.—The term ‘‘recipient’’ means a person that receives 

2 an award or becomes party to a cooperative agreement under this sec3 tion. 

4 (7) STATE.—The term ‘‘State’’ means a State, the District of Co5 lumbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. 

6 (b) ESTABLISHMENT OF FAST PROGRAM.—The Administrator shall es7 tablish a program to be known as the Federal and State Technology Part8 nership program or FAST program, the purpose of which shall be to 

9 strengthen the technological competitiveness of small business concerns in 

10 the States. 

11 (c) GRANTS AND COOPERATIVE AGREEMENTS.— 

12 (1) JOINT REVIEW.—In carrying out the FAST program under this 

13 section, the Administrator and the SBIR managers at the National 

14 Science Foundation and the Department of Defense shall jointly review 

15 proposals submitted by applicants and may make awards or enter into 

16 cooperative agreements under this section based on the factors for con17 sideration specified in paragraph (2), to enhance or develop in a 

18 State— 

19 (A) technology research and development by small business con20 cerns; 

21 (B) technology transfer from university research to technology22 based small business concerns; 

23 (C) technology deployment and diffusion benefiting small busi24 ness concerns; 

25 (D) the technological capabilities of small business concerns 

26 through the establishment or operation of consortia comprised of 

27 entities, organizations, or individuals, including— 

28 (i) State and local development agencies and entities; 

29 (ii) representatives of technology-based small business con30 cerns; 

31 (iii) industries and emerging companies; 

32 (iv) universities; and 

33 (v) small business development centers; and 

34 (E) outreach, financial support, and technical assistance to 

35 technology-based small business concerns participating in or inter36 ested in participating in an SBIR, including initiatives— 

37 (i) to make grants or loans to companies to pay a portion 

38 or all of the cost of developing SBIR proposals; 

39 (ii) to establish or operate a mentoring network within the 

40 FAST program to provide business advice and counseling 

41 that will assist small business concerns that have been identiVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00258 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 fied by FAST program participants, program managers of 

2 participating SBIR agencies, the Administrator, or other enti3 ties that— 

4 (I) are knowledgeable about the SBIRs and STTRs as 

5 good candidates for SBIRs and STTRs; and 

6 (II) would benefit from mentoring, in accordance with 

7 subsection (f); 

8 (iii) to create or participate in a training program for indi9 viduals providing SBIR outreach and assistance at the State 

10 and local levels; and 

11 (iv) to encourage the commercialization of technology devel12 oped through SBIR funding. 

13 (2) SELECTION CONSIDERATIONS.—In making awards or entering 

14 into cooperative agreements under this section, the Administrator and 

15 the SBIR managers at the National Science Foundation and the De16 partment of Defense— 

17 (A) may consider only proposals by applicants that intend to 

18 use a portion of the Federal assistance provided under this section 

19 to provide outreach, financial support, or technical assistance to 

20 technology-based small business concerns participating in or inter21 ested in participating in an SBIR; and 

22 (B) shall consider, at a minimum— 

23 (i) whether the applicant has demonstrated that the assist24 ance to be provided would address unmet needs of small busi25 ness concerns in the community, and whether it is important 

26 to use Federal funding for the proposed activities; 

27 (ii) whether the applicant has demonstrated that a need ex28 ists to increase the number or success of small high-tech29 nology businesses in the State, as measured by the number 

30 of first phase and second phase SBIR awards that have his31 torically been received by small business concerns in the 

32 State; 

33 (iii) whether the projected costs of the proposed activities 

34 are reasonable; 

35 (iv) whether the proposal integrates and coordinates the 

36 proposed activities with other State and local programs assist37 ing small high-technology firms in the State; 

38 (v) the manner in which the applicant will measure the re39 sults of the activities to be conducted; and 

40 (vi) whether the proposal addresses the needs of— 


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1 (I) small business concerns owned and controlled by 

2 women; 

3 (II) small business concerns owned and controlled by 

4 minorities; and 

5 (III) small business concerns located in areas that 

6 have historically not participated in the SBIR and STTR 

7 programs. 

8 (3) PROPOSAL LIMIT.—Not more than one proposal may be sub9 mitted for inclusion in the FAST program under this section to provide 

10 services in any one State in any one fiscal year. 

11 (4) PROCESS.— 

12 (A) PROPOSALS AND APPLICATION.—A proposal or application 

13 for assistance under this section shall be in such form and subject 

14 to such procedures as the Administrator shall establish. 

15 (B) REGULATIONS.—The Administrator shall promulgate regu16 lations establishing standards for the consideration of proposals 

17 under paragraph (2), including standards regarding each of the 

18 considerations described in paragraph (2)(B). 

19 (d) COOPERATION AND COORDINATION.—In carrying out the FAST pro20 gram, the Administrator shall cooperate and coordinate with— 

21 (1) SBIR agencies; and 

22 (2) entities, organizations, and individuals actively engaged in en23 hancing or developing the technological capabilities of small business 

24 concerns, including— 

25 (A) State and local development agencies and entities; 

26 (B) State committees established under the Experimental Pro27 gram to Stimulate Competitive Research of the National Science 

28 Foundation established under section 113 of the National Science 

29 Foundation Act of 1988 (42 U.S.C. 1862g); 

30 (C) State science and technology councils; and 

31 (D) representatives of technology-based small business concerns. 

32 (e) REQUIREMENTS.— 

33 (1) COMPETITIVE BASIS.—An award under this section shall be 

34 made or a cooperative agreement under this section shall be entered 

35 into on a competitive basis. 

36 (2) MATCHING REQUIREMENTS.— 

37 (A) AMOUNT OF NON-FEDERAL SHARE.— 

38 (i) IN GENERAL.—The non-Federal share of the cost of an 

39 activity (other than a planning activity) carried out using an 

40 award or under a cooperative agreement under this section 

41 shall be— 


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1 (I) one-third, in the case of a recipient that will serve 

2 small business concerns located in one of the 18 States 

3 receiving the fewest SBIR first phase awards; 

4 (II) except as provided in subparagraph (B), one-half, 

5 in the case of a recipient that will serve small business 

6 concerns located in one of the 16 States receiving the 

7 greatest number of SBIR first phase awards; and 

8 (III) except as provided in subparagraph (B), three9 sevenths, in the case of a recipient that will serve small 

10 business concerns located in a State not described in 

11 subclause (I) or (II) that is receiving SBIR first phase 

12 awards. 

13 (ii) RANKINGS.—For purposes of clause (i), the Adminis14 trator shall reevaluate the ranking of a State once every 2 fis15 cal years, based on the most recent statistics compiled by the 

16 Administrator. 

17 (B) LOW-INCOME AREAS.—To the extent that the Federal con18 tribution to the cost of the activity will be directly allocated by a 

19 recipient described in subparagraph (A) to serve small business 

20 concerns located in a qualified census tract, the non-Federal share 

21 of the cost of an activity carried out using an award or under a 

22 cooperative agreement under this section shall be one-third. 

23 (C) TYPES OF FUNDING.— 

24 (i) IN GENERAL.—The non-Federal share of the cost of an 

25 activity carried out by a recipient shall be comprised of not 

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

27 indirect costs and in-kind contributions. 

28 (ii) NON-FEDERAL SOURCE.—None of the non-Federal 

29 share of costs or contributions may be derived from funds 

30 from any other Federal program. 

31 (3) DURATION.—An award may be made or a cooperative agreement 

32 may be entered into under this section for multiple years, not to exceed 

33 5 years in total. 

34 (f) MENTORING NETWORKS.— 

35 (1) IN GENERAL.—A recipient of an award or participant in a coop36 erative agreement under this section may use a reasonable amount of 

37 the assistance for the establishment of a mentoring network under this 

38 section. 

39 (2) CRITERIA.—A mentoring network established using assistance 

40 under this section shall— 


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1 (A) provide business advice and counseling to high technology 

2 small business concerns located in the State or region served by 

3 the mentoring network and identified under subsection 

4 (c)(1)(E)(ii) as potential candidates for an SBIR or STTR; 

5 (B) identify volunteer mentors who— 

6 (i) are persons associated with a small business concern 

7 that has successfully completed one or more SBIR or STTR 

8 funding agreements; and 

9 (ii) have agreed to guide small business concerns through 

10 all stages of the SBIR or STTR process, including providing 

11 assistance relating to— 

12 (I) proposal writing; 

13 (II) marketing; 

14 (III) Government accounting; 

15 (IV) Government audits; 

16 (V) project facilities and equipment; 

17 (VI) human resources; 

18 (VII) third phase partners; 

19 (VIII) commercialization; 

20 (IX) venture capital networking; and 

21 (X) other matters relevant to the SBIRs and STTRs; 

22 (C) have experience working with small business concerns par23 ticipating in the SBIRs and STTRs; 

24 (D) contribute information to the national database referred to 

25 in paragraph (3); and 

26 (E) agree to reimburse volunteer mentors for out-of-pocket ex27 penses related to service as a mentor under this section. 

28 (3) MENTORING DATABASE.—The Administrator, directly or by con29 tract, shall— 

30 (A) include in the database required by section 26341 of this 

31 title, in cooperation with the SBIR program, STTR program, and 

32 FAST program, information on mentoring networks and mentors 

33 participating under this subsection, including a description of their 

34 areas of expertise; 

35 (B) work cooperatively with mentoring networks to maintain 

36 and update the database; and 

37 (C) take such action as is necessary to aggressively promote 

38 mentoring networks under this subsection. 

39 (g) TERMINATION.—The authority to carry out the FAST program under 

40 this section terminates on September 30, 2005. 


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1 § 26346. Second phase and third phase awards for testing 

2 and evaluation of products, services, and tech3 nologies for use in a technical or weapons system 

4 An award for testing and evaluation of a product, service, or technology 

5 for use in a technical or weapons system may be made in the second or 

6 third phase of an SBIR or STTR. 

7 § 26347. Innovation in energy efficiency 

8 (a) FEDERAL AGENCY ENERGY-RELATED PRIORITY.—In carrying out its 

9 duties under this division relating to SBIR and STTR solicitations by Fed10 eral agencies, the Administrator shall— 

11 (1) ensure that Federal agencies give high priority to small business 

12 concerns that participate in or conduct energy efficiency or renewable 

13 energy system research and development projects; and 

14 (2) include in the annual report to Congress under section 10710(a) 

15 of this title a determination of whether the priority described in para16 graph (1) is being carried out. 

17 (b) CONSULTATION.—The Administrator shall consult with the heads of 

18 other Federal agencies in determining whether priority has been given to 

19 small business concerns that participate in or conduct energy efficiency or 

20 renewable energy system research and development projects, as required by 

21 this section. 

22 (c) GUIDELINES.—The Administrator shall, as soon as practicable after 

23 December 19, 2007, issue guidelines and directives to assist Federal agen24 cies in meeting the requirements of this section. 

25 DIVISION I—SMALL BUSINESS DEVELOPMENT 

26 CENTER PROGRAM 

27 CHAPTER 271—SMALL BUSINESS DEVELOPMENT 

28 CENTER PROGRAM 

Sec. 

27101. Definitions. 

27102. Financial assistance agreements. 

27103. Plans. 

27104. Services. 

27105. Export enhancement plans. 

27106. Assistance from Federal laboratories. 

27107. Assistance from the National Science Foundation. 

27108. Assistance from the National Aeronautics and Space Administration. 

27109. National Small Business Development Center Advisory Board. 

27110. Small business development center advisory boards. 

27111. Program examination and accreditation. 

27112. Limitations on authority. 

27113. Prohibition of fees for counseling service. 

27114. Veterans assistance and services program 

29 § 27101. Definitions 

30 In this chapter: 


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1 (1) ASSOCIATE ADMINISTRATOR.—The term ‘‘Associate Adminis2 trator’’ means the Associate Administrator for Small Business Develop3 ment Centers. 

4 (2) FINANCIAL ASSISTANCE.—The term ‘‘financial assistance’’ means 

5 financial assistance under a grant, contract, or cooperative agreement. 

6 (3) FINANCIAL ASSISTANCE AGREEMENT.—The term ‘‘financial as7 sistance agreement’’ means a grant agreement, contract, or cooperative 

8 agreement under which financial assistance is provided under this 

9 chapter. 

10 (4) PROGRAM.—The term ‘‘program’’ means the small business de11 velopment center program under this chapter. 

12 (5) QUALIFIED ENTITY.—The term ‘‘qualified entity’’ means— 

13 (A) a public or private institution of higher education (including 

14 a land-grant college or university, a college or school of business, 

15 engineering, commerce, or agriculture, and a community college or 

16 junior college); 

17 (B) a women’s business center operating under chapter 273; 

18 and 

19 (C) any other entity if the entity, on December 31, 1990, was 

20 receiving a grant or was a party to a contract or cooperative 

21 agreement under this chapter. 

22 (7) STATE.—The term ‘‘State’’ means a State, the District of Co23 lumbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. 

24 § 27102. Financial assistance agreements 

25 (a) IN GENERAL.—Under a program to be known as the small business 

26 development center program, the Administrator may provide financial as27 sistance to a qualified entity to assist in establishing a small business devel28 opment center project for the purpose of providing— 

29 (1) a small business oriented employment or natural resources devel30 opment program; 

31 (2) studies, research, and counseling concerning the managing, fi32 nancing, and operation of small business concerns; 

33 (3) management and technical assistance regarding participation by 

34 small business concerns in international markets, export promotion, 

35 and technology transfer; 

36 (4) delivery or distribution of services and information in connection 

37 with an activity described in paragraph (1), (2), or (3); and 

38 (5) providing access to business analysts that can refer small busi39 ness concerns to available experts. 


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1 (b) REQUIREMENTS.—The Administrator shall require an applicant for fi2 nancial assistance under this chapter with performance commencing on or 

3 after January 1, 1992, to— 

4 (1) have its own budget; and 

5 (2) primarily use institutions of higher education and women’s busi6 ness centers operating under chapter 273 to provide services to the 

7 small business community. 

8 (c) TERM.—The term of a financial assistance agreement under sub9 section (a) shall be made on a calendar year basis or to coincide with the 

10 Federal fiscal year. 

11 (d) COOPERATION.—A small business development center shall work in 

12 close cooperation with the Administration’s regional and local offices, the 

13 Department of Commerce, appropriate Federal, State, and local agencies 

14 and the small business community to serve as an active information dissemi15 nation and service delivery mechanism for existing trade promotion, trade 

16 finance, trade adjustment, trade remedy, and trade data collection programs 

17 of particular utility for small business concerns. 

18 (e) MANAGEMENT.— 

19 (1) IN GENERAL.—The program shall be under the general manage20 ment and oversight of the Administrator for the delivery of programs 

21 and services to the small business community. 

22 (2) PROGRAMS AND SERVICES.—Programs and services referred to 

23 in paragraph (1) shall be jointly developed, negotiated, and agreed on, 

24 with full participation of a qualified entity and the Administrator, 

25 under an executed financial assistance agreement between the qualified 

26 entity and the Administrator. 

27 (f) ASSOCIATION OF SMALL BUSINESS DEVELOPMENT CENTERS.— 

28 (1) IN GENERAL.—Small business development centers may form an 

29 Association to pursue matters of common concern. 

30 (2) RECOGNITION; DOCUMENTS.— 

31 (A) IN GENERAL.—If more than a majority of the small busi32 ness development centers that are operating under agreements 

33 with the Administrator are members of an Association formed 

34 under paragraph (1), the Administrator shall— 

35 (i) recognize the existence and activities of the Association; 

36 and 

37 (ii) consult with the Association and develop documents— 

38 (I) announcing the annual scope of activities under 

39 this chapter; 

40 (II) requesting proposals to deliver assistance as pro41 vided in this chapter; and 


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1 (III) governing the general operations and administra2 tion of the program, specifically including the develop3 ment of regulations and a uniform negotiated financial 

4 assistance agreement for use on an annual basis when 

5 entering into individual negotiated financial assistance 

6 agreements with small business development centers. 

7 (B) INCORPORATION OF CERTAIN PROVISIONS.—In regulations 

8 under subparagraph (A)(ii)((III), provisions governing audits, cost 

9 principles and administrative requirements for financial assistance 

10 that are included in uniform requirements of Office of Manage11 ment and Budget Circulars shall be incorporated by reference and 

12 shall not be set forth in summary or other form. 

13 (3) LEVERAGING OF RESOURCES.—On an annual basis, a small busi14 ness development center shall review and coordinate public and private 

15 partnerships and cosponsorships with the Administrator for the pur16 pose of more efficiently leveraging available resources on a national and 

17 a State basis. 

18 (g) FUNDING.— 

19 (1) MATCHING AMOUNT.— 

20 (A) IN GENERAL.—The Administrator shall require as a condi21 tion of any financial assistance agreement (or amendment or 

22 modification of a financial assistance agreement) made to a quali23 fied entity under this chapter that a matching amount (excluding 

24 any fees collected from recipients of such assistance) equal to the 

25 amount of the financial assistance be provided from sources other 

26 than the Federal Government, to be comprised of not less than 50 

27 percent cash and not more than 50 percent of indirect costs and 

28 in-kind contributions. 

29 (B) RESTRICTION.—The matching amount described in sub30 paragraph (A) shall not include any indirect costs or in-kind con31 tributions derived from any Federal program. 

32 (2) FUNDING FORMULA.— 

33 (A) IN GENERAL.—Subject to subparagraph (C), the total 

34 amount of financial assistance received by recipients of financial 

35 assistance in a State under this section shall be equal to an 

36 amount determined in accordance with the following formula: 

37 (i) PRO RATA BASIS.—The annual amount made available 

38 under section 10903(a) of this title for the small business de39 velopment center program, less any reductions made for ex40 penses authorized by subparagraph (E), shall be divided on 

41 a pro rata basis, based on the percentage of the population 


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1 of each State, as compared with the population of the United 

2 States. 

3 (ii) MINIMUM FUNDING LEVEL.—If the pro rata amount 

4 calculated under clause (i) for any State is less than the min5 imum funding level under subparagraph (C), the Adminis6 trator shall determine the aggregate amount necessary to 

7 achieve that minimum funding level for each such State. 

8 (iii) DEDUCTION.—The aggregate amount calculated under 

9 clause (ii) shall be deducted from the amount calculated 

10 under clause (i) for States eligible to receive more than the 

11 minimum funding level. The deductions shall be made on a 

12 pro rata basis, based on the population of each such State, 

13 as compared with the total population of all such States. 

14 (iv) ADDITION.—The aggregate amount deducted under 

15 clause (iii) shall be added to the amount of financial assist16 ance of the States that are not eligible to receive more than 

17 the minimum funding level in order to achieve the minimum 

18 funding level for each such State, except that the eligible 

19 amount of financial assistance to any State shall not be re20 duced to an amount below the minimum funding level. 

21 (B) DETERMINATION OF AMOUNT OF FINANCIAL ASSISTANCE.— 

22 The amount of financial assistance for which a State is eligible to 

23 apply under this paragraph shall be the amount determined under 

24 subparagraph (A), subject to any modifications required under 

25 subparagraph (C), and shall be based on the amount available for 

26 the fiscal year in which performance of the financial assistance 

27 agreement commences, but not including amounts distributed in 

28 accordance with subparagraph (D). The total amount of financial 

29 assistance received by recipients of financial assistance in a State 

30 under any provision of this paragraph shall not exceed the amount 

31 of matching funds from sources other than the Federal Govern32 ment, as required under paragraph (1). 

33 (C) MINIMUM FUNDING LEVEL.—The amount of the minimum 

34 funding level for each State shall be determined for each fiscal 

35 year based on the amount made available for that fiscal year to 

36 carry out this chapter, as follows: 

37 (i) NOT LESS THAN $81,500,000 AND NOT MORE THAN

38 $90,000,000 MADE AVAILABLE.—If the amount made available 

39 is not less than $81,500,000 and not more than $90,000,000, 

40 the minimum funding level shall be $500,000. 


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1 (ii) LESS THAN $81,500,000 MADE AVAILABLE.—If the 

2 amount made available is less than $81,500,000, the min3 imum funding level shall be the remainder of $500,000 minus 

4 a percentage of $500,000 equal to the percentage amount by 

5 which the amount made available is less than $81,500,000. 

6 (iii) MORE THAN $90,000,000 MADE AVAILABLE.—If the 

7 amount made available is more than $90,000,000, the min8 imum funding level shall be the sum of $500,000 plus a per9 centage of $500,000 equal to the percentage amount by which 

10 the amount made available exceeds $90,000,000. 

11 (D) DISTRIBUTIONS.—Subject to subparagraph (C), if qualified 

12 entities in any State do not apply for, or use the full funding eligi13 bility for the State for a fiscal year, the Administrator shall dis14 tribute the remaining funds as follows: 

15 (i) AMOUNT LESS THAN THE AMOUNT RECEIVED IN FISCAL

16 YEAR 2000.—If the amount of financial assistance to any 

17 State is less than the amount received by recipients of finan18 cial assistance in that State in fiscal year 2000, the Adminis19 trator shall distribute the remaining funds, on a pro rata 

20 basis, based on the percentage of shortage of each such State, 

21 as compared with the total amount of such remaining funds 

22 available, to the extent necessary to increase the amount of 

23 the financial assistance to the amount received by recipients 

24 of financial assistance in that State in fiscal year 2000, or 

25 until such funds are exhausted, whichever first occurs. 

26 (ii) REMAINING AMOUNT.—If any funds remain after appli27 cation of clause (i), the remaining amount may be distributed 

28 as supplemental financial assistance to applicants in any 

29 State, as the Administrator determines, in the discretion of 

30 the Administrator, to be appropriate, after consultation with 

31 the Association. 

32 (E) USE OF AMOUNTS.— 

33 (i) IN GENERAL.—Of the amounts made available in any 

34 fiscal year to carry out this chapter— 

35 (I) not more than $500,000 may be used by the Ad36 ministrator to pay expenses described in paragraphs (2) 

37 to (4) of section 10903(a) of this title; and 

38 (II) not more than $500,000 may be used by the Ad39 ministrator to pay the examination expenses described in 

40 section 10903(a)(5) of this title. 


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1 (ii) LIMITATION.—No funds described in clause (i) may be 

2 used for examination expenses under section 10903(a)(5) of 

3 this title if the use would reduce the amount of financial as4 sistance made available under subparagraph (A)(i) to less 

5 than $85,000,000 (after excluding any amounts provided in 

6 appropriations Acts, or accompanying report language, for 

7 specific institutions or for purposes other than the general 

8 program) or would further reduce the amount of such finan9 cial assistance below that amount. 

10 (F) EXCLUSIONS.—Financial assistance provided to grant re11 cipients in a State by the Administrator or another Federal agency 

12 to carry out subsection (j) or section 27104(b)(7) of this title, or 

13 for supplemental financial assistance under subparagraph (D)(ii) 

14 of this paragraph, shall not be included in the calculation of max15 imum funding for a State under subparagraph (B) of this para16 graph. 

17 (h) PORTABLE ASSISTANCE FOR STARTUP AND SUSTAINABILITY NON18 MATCHING FINANCIAL ASSISTANCE PROGRAMS.— 

19 (1) IN GENERAL.—From the funds appropriated under section 

20 10903(h) of this title, the Administrator shall reserve not less than 

21 $1,000,000 for each fiscal year to develop portable assistance for start22 up and sustainability non-matching financial assistance programs to be 

23 conducted by eligible small business development centers in commu24 nities that are economically challenged as a result of a business or gov25 ernment facility downsizing or closing that has resulted in the loss of 

26 jobs or small business instability. 

27 (2) MAXIMUM AMOUNT.—Non-matching financial assistance under 

28 this subsection shall not exceed $100,000. 

29 (3) USE.—Non-matching financial assistance under this subsection 

30 shall be used for small business development center personnel expenses 

31 and related small business programs and services. 

32 (i) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT CEN33 TERS.— 

34 (1) IN GENERAL.—Subject to paragraph (2), a small business devel35 opment center may enter into a contract with a Federal agency to pro36 vide specific assistance to small business concerns. 

37 (2) CONTRACT PREREQUISITES.— 

38 (A) IN GENERAL.—Before bidding on a contract under para39 graph (1), a small business development center shall receive ap40 proval from the Associate Administrator of the subject and general 

41 scope of the contract. 


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1 (B) APPROVAL.—Approval of a contract under paragraph (1) 

2 shall be based on a determination that— 

3 (i) the contract will provide assistance to small business 

4 concerns; and 

5 (ii) performance of the contract will not hinder the small 

6 business development center in carrying out the terms of the 

7 financial assistance agreement received by the small business 

8 development center from the Administrator. 

9 (3) EXEMPTION FROM MATCHING REQUIREMENT.—A contract under 

10 this subsection shall not be subject to the matching funds or eligibility 

11 requirements of subsection (g). 

12 (4) NONAPPLICABILITY TO CERTAIN CONTRACTING GOALS.—Not13 withstanding any other provision of law, a contract for assistance under 

14 this subsection shall not be applied to a Federal agency’s contracting 

15 goal under section 25106 of this title for small business concerns 

16 owned and controlled by socially and economically disadvantaged indi17 viduals, small business concerns owned and controlled by women, or 

18 other small business concerns. 

19 (j) ADDITIONAL FINANCIAL ASSISTANCE.— 

20 (1) IN GENERAL.—A qualified entity that is funded by the Adminis21 trator as a small business development center may apply to the Admin22 istrator for additional financial assistance to be used solely to assist, 

23 as provided in paragraphs (2) to (7) of section 27104(b), in— 

24 (A) the development and enhancement of exports by small busi25 ness concerns; 

26 (B) technology transfer; and 

27 (C) outreach, development, and enhancement of minority-owned 

28 small business startups or expansions, HUBZone small business 

29 concerns, veteran-owned small business startups or expansions, 

30 and women-owned small business startups or expansions, in com31 munities affected by base closings or military or corporate 

32 downsizing or in rural or underserved communities. 

33 (2) COMPLIANCE REQUIREMENT.—An applicant applying for addi34 tional financial assistance under paragraph (1) shall comply with all of 

35 the provisions of this chapter, including providing matching funds. 

36 (3) FUNDING.—Funding under this subsection shall be effective for 

37 any fiscal year to the extent provided in advance in appropriations 

38 Acts. 

39 (4) LIMITATION ON AMOUNT OF GRANT.—No recipient of funds 

40 under this subsection shall receive financial assistance that would ex41 ceed its pro rata share of a $15,000,000 program based on the popuVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00270 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 lations to be served by the small business development center as com2 pared with the total population of the United States. 

3 (5) MINIMUM STATE ELIGIBILITY AMOUNT.—The minimum amount 

4 of eligibility for recipients of financial assistance in any State shall be 

5 $100,000. 

6 (6) FINANCIAL ASSISTANCE TO NONPROFIT ENTITIES.— 

7 (A) IN GENERAL.—In a State described in subparagraph (B), 

8 the Administrator may provide financial assistance to a nonprofit 

9 entity in the State to carry out the activities specified in this sub10 section. 

11 (B) STATES.—A State referred to in subparagraph (A) is a 

12 State in which— 

13 (i) the Administrator has not provided financial assistance 

14 under subsection (a); or 

15 (ii) no application for financial assistance has been made 

16 by a small business development center under this subsection 

17 within 60 days after the later of— 

18 (I) the effective date of a financial assistance agree19 ment under subsection (a) to the small business develop20 ment center; or 

21 (II) the date on which the Administrator notifies the 

22 financial assistance recipient funded under subsection (a) 

23 that funds are available for applications for financial as24 sistance under this subsection. 

25 (C) MATCHING FUNDS.—A nonprofit entity that receives finan26 cial assistance under this paragraph shall comply with the match27 ing funds requirement of subsection (g). 

28 (D) APPROPRIATIONS.—Financial assistance under this para29 graph shall be effective for any fiscal year only to the extent pro30 vided in advance in an appropriations Act. 

31 (E) PRO RATA SHARE.—The amount of financial assistance pro32 vided under this paragraph in a State shall be limited to the pro 

33 rata share provisions of paragraph (4). 

34 (k) PRIVACY REQUIREMENTS.— 

35 (1) IN GENERAL.—A small business development center, consortium 

36 of small business development centers, or contractor or agent of a small 

37 business development center may not disclose the name, address, or 

38 telephone number of any individual or small business concern receiving 

39 assistance under this chapter without the consent of the individual or 

40 small business concern unless— 


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1 (A) the Administrator is ordered to make such a disclosure by 

2 a court in any civil or criminal enforcement action initiated by a 

3 Federal agency or State agency; or 

4 (B) the Administrator considers such a disclosure to be nec5 essary for the purpose of conducting a financial audit of a small 

6 business development center. 

7 (2) LIMITATION.—A disclosure under this paragraph (1)(B) shall be 

8 limited to the information necessary for an audit. 

9 (3) USE OF INFORMATION BY THE ADMINISTRATOR.—This chapter 

10 does not— 

11 (A) restrict access by the Administrator to program activity 

12 data; or 

13 (B) preclude the Administrator from using client information to 

14 conduct client surveys. 

15 (4) REGULATIONS.— 

16 (A) IN GENERAL.—The Administrator shall issue regulations to 

17 establish standards— 

18 (i) for disclosures with respect to financial audits under 

19 paragraph (1)(B); and 

20 (ii) for client surveys under paragraph (3)(B), including 

21 standards for oversight of such surveys and for dissemination 

22 and use of client information. 

23 (B) MAXIMUM PRIVACY PROTECTION.—Regulations under this 

24 paragraph, shall, to the extent practicable, provide for the max25 imum amount of privacy protection. 

26 (C) INSPECTOR GENERAL.—Until the effective date of regula27 tions under this paragraph, any client survey and the use of such 

28 information shall be approved by the Inspector General of the Ad29 ministration, who shall include such approval in a semiannual re30 port. 

31 § 27103. Plans 

32 (a) PROVISION OF FINANCIAL ASSISTANCE CONSISTENT WITH AREA

33 PLAN.—Financial assistance shall not be made available to a qualified enti34 ty if approving the assistance would be inconsistent with a plan for the area 

35 of a State in which service is to be provided that has been adopted by an 

36 agency recognized by the State as authorized to adopt an area plan and ap37 proved by the Administrator in accordance with standards and requirements 

38 established under this chapter. 

39 (b) PLAN.— 


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1 (1) IN GENERAL.—A qualified entity may apply to participate in the 

2 small business development center program by submitting to the Ad3 ministrator for approval a plan that— 

4 (A) identifies the entities authorized under this chapter to par5 ticipate in the small business development center program; 

6 (B) identifies the geographic area to be served; 

7 (C) describes the services that the applicant would provide and 

8 the method for delivering the services; 

9 (D) includes a budget; and 

10 (E) includes any other information and assurances that the Ad11 ministrator may require to ensure that the qualified entity will 

12 carry out the activities eligible for assistance. 

13 (2) ACTION BY THE ADMINISTRATOR.— 

14 (A) IN GENERAL.—The Administrator may approve, condi15 tionally approve, or reject a qualified entity plan or combination 

16 of plans submitted. 

17 (B) REVIEW.—In all cases, the Administrator shall review a 

18 qualified entity plan— 

19 (i) for conformity with an area plan approved under sub20 section (a); and 

21 (ii) with a view toward providing small business concerns 

22 with the most comprehensive and coordinated assistance in 

23 the State or part of a State to be served. 

24 (c) ASSISTANCE OUTSIDE THE STATE.—The Administrator may permit 

25 a small business development center to provide advice, information, and as26 sistance, as described in section 27104 of this title, to small business con27 cerns located outside the State in which the small business development cen28 ter is located, but only to the extent that the small business concerns are 

29 located within close geographical proximity to the small business develop30 ment center, as determined by the Administrator. 

31 § 27104. Services 

32 (a) IN GENERAL.—A small business development center shall assist small 

33 business concerns in solving problems concerning operations, manufacturing, 

34 engineering, technology exchange and development, personnel administra35 tion, marketing, sales, merchandising, finance, accounting, business strategy 

36 development, and other disciplines required for small business growth and 

37 expansion, innovation, increased productivity, and management improve38 ment, and for decreasing industry economic concentrations. 

39 (b) SERVICES TO BE PROVIDED.—Services provided by a small business 

40 development center shall include— 


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1 (1) furnishing one-to-one individual counseling to small business con2 cerns, including— 

3 (A) working with individuals to increase awareness of basic 

4 credit practices and credit requirements; 

5 (B) working with individuals to develop business plans, financial 

6 packages, credit applications, and contract proposals; 

7 (C) working with the Administrator to develop and provide in8 formational tools for use in working with individuals on pre-busi9 ness startup planning, existing business expansion, and export 

10 planning; and 

11 (D) working with individuals referred by the local offices of the 

12 Administration and participating lenders; 

13 (2) assisting in technology transfer, research and development (in14 cluding applied research), and coupling from existing sources to small 

15 business concerns, including— 

16 (A) working to increase the access of small business concerns 

17 to the capabilities of automated flexible manufacturing systems; 

18 (B) working through existing networks and developing new net19 works for technology transfer that encourage partnership between 

20 the small business and academic communities to help commer21 cialize university-based research and development and introduce 

22 university-based engineers and scientists to their counterparts in 

23 small technology-based firms; and 

24 (C) exploring the viability of developing shared production facili25 ties, under appropriate circumstances; 

26 (3)(A) in cooperation with the Department of Commerce and other 

27 relevant Federal agencies, actively assisting small business concerns in 

28 exporting by— 

29 (i) identifying and developing potential export markets for small 

30 business concerns; 

31 (ii) facilitating export transactions for small business concerns; 

32 (iii) developing linkages between small business concerns and 

33 prescreened foreign buyers; 

34 (iv) assisting small business concerns in participating in inter35 national trade shows; 

36 (v) assisting small business concerns in obtaining export financ37 ing; and 

38 (vi) facilitating the development or reorientation of marketing 

39 and production strategies; and 


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1 (B) where appropriate, working with the Administrator in coopera2 tion with the State to establish a State international trade center for 

3 the purposes described in subparagraph (A); 

4 (4)(A) developing a program in conjunction with the Export-Import 

5 Bank of the United States and local and regional Administration of6 fices that will enable the small business development center to serve as 

7 an information network and to assist small business concern applicants 

8 for financing programs of the Export-Import Bank of the United 

9 States; and 

10 (B) otherwise identifying and helping to make available export fi11 nancing programs to small business concerns; 

12 (5) working closely with the small business community, small busi13 ness consultants, State agencies, universities, and other appropriate 

14 groups to make translation services more readily available to small 

15 business concerns doing business, or attempting to develop business, in 

16 foreign markets; 

17 (6) cooperating with the Department of Commerce and other rel18 evant Federal agencies to increase access to available export market in19 formation systems, including the Commercial Information Management 

20 System; 

21 (7) assisting small business concerns in developing and implementing 

22 strategic business plans to timely and effectively respond to the 

23 planned closure (or reduction) of a Department of Defense facility 

24 within the community, or actual or projected reductions in small busi25 ness concerns’ business base due to the actual or projected termination 

26 (or reduction) of a Department of Defense program or a contract in 

27 support of a Department of Defense program by— 

28 (A) developing broad economic assessments of the adverse im29 pacts of— 

30 (i) the closure (or reduction) of the Department of Defense 

31 facility on the small business concerns providing goods or 

32 services to the facility or to the military and civilian personnel 

33 stationed or working at the facility; and 

34 (ii) the termination (or reduction) of a Department of De35 fense program (or contracts under a Department of Defense 

36 program) on the small business concerns participating in the 

37 program as a prime contractor, subcontractor, or supplier at 

38 any tier; 

39 (B) developing, in conjunction with appropriate Federal, State, 

40 and local governmental entities and private sector organizations, 


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1 the parameters of a transition adjustment program adaptable to 

2 the needs of individual small business concerns; 

3 (C) conducting appropriate programs to inform the affected 

4 small business community regarding the anticipated adverse im5 pacts identified under subparagraph (A) and the economic adjust6 ment assistance available to small business concerns; and 

7 (D) assisting small business concerns in developing and imple8 menting an individualized transition business plan; 

9 (8)(A) maintaining current information concerning Federal, State, 

10 and local regulations that affect small business concerns and counsel 

11 small business concerns on methods of compliance; and 

12 (B) providing counseling and technology development when necessary 

13 to help small business concerns find solutions for complying with envi14 ronmental, energy, health, safety, and other Federal, State, and local 

15 regulations; 

16 (9) coordinating and conducting research into technical and general 

17 small business problems for which there are no ready solutions; 

18 (10) providing and maintaining a comprehensive library that con19 tains current information and statistical data needed by small business 

20 concerns; 

21 (11) maintaining a working relationship and open communications 

22 with the financial and investment communities, legal associations, local 

23 and regional private consultants, and local and regional small business 

24 groups and associates to help address the various needs of the small 

25 business community; 

26 (12) conducting in-depth surveys for local small business groups to 

27 develop general information regarding the local economy and general 

28 small business strengths and weaknesses in the locality; 

29 (13) in cooperation with the Department of Commerce, the Adminis30 trator, and relevant Federal agencies, actively assisting rural small 

31 business concerns in exporting by— 

32 (A) identifying and developing potential export markets for 

33 rural small business concerns; 

34 (B) facilitating export transactions for rural small business con35 cerns; 

36 (C) developing linkages between rural small business concerns 

37 and prescreened foreign buyers; 

38 (D) assisting rural small business concerns in participating in 

39 international trade shows; and 

40 (E) assisting rural small business concerns in obtaining export 

41 financing and developing marketing and production strategies; 


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1 (14) assisting rural small business concerns in developing marketing 

2 and production strategies that will enable rural small business concerns 

3 to better compete in the domestic market; 

4 (15) assisting rural small business concerns by— 

5 (A) providing technical assistance needed by rural small busi6 ness concerns; 

7 (B) making available managerial assistance to rural small busi8 ness concerns; and 

9 (C) providing information and assistance in obtaining financing 

10 for business startups and expansion; 

11 (16) in conjunction with the United States National Tourism Orga12 nization, assist rural small business concerns in developing the tourism 

13 potential of rural communities by— 

14 (A) identifying the cultural, historic, recreational, and scenic re15 sources of rural communities; 

16 (B) providing assistance to small business concerns in devel17 oping tourism marketing and promotion plans relating to tourism 

18 in rural areas; and 

19 (C) assisting small business concerns in obtaining capital for 

20 starting or expanding businesses primarily serving tourists; 

21 (17) maintaining lists of local and regional private consultants to 

22 whom small business concerns can be referred; 

23 (18) providing information to small business concerns regarding 

24 compliance with regulatory requirements; 

25 (19) developing informational publications, establishing resource cen26 ters of reference materials, and distributing compliance guides pub27 lished under section 212(a) of the Small Business Regulatory Enforce28 ment Fairness Act of 1996 (5 U.S.C. 601 note, Public Law 104–121); 

29 (20) providing small business concern owners with access to a wide 

30 variety of export-related information by establishing on-line computer 

31 linkages between small business development centers and an inter32 national trade data information network with ties to the United States 

33 Export Assistance Center program; and 

34 (21) providing information and assistance to small business concerns 

35 with respect to establishing drug-free workplace programs on or before 

36 October 1, 2006. 

37 (c) UPGRADING AND MODIFICATION OF SERVICES.—A small business de38 velopment center shall continue to upgrade and modify its services, as need39 ed, in order to meet the changing and evolving needs of the small business 

40 community. 

41 (d) LOCATION.— 


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1 (1) PROXIMITY OF SERVICE.—A small business development center 

2 shall provide service as close as possible to small business concerns by 

3 providing extension services and using satellite locations when nec4 essary. 

5 (2) FACILITIES AND STAFF.—The facilities and staff of a small busi6 ness development center shall be located in such places as to provide 

7 maximum accessibility and benefits to the small business concerns that 

8 the small business development center is intended to serve. 

9 (e) OTHER PROGRAMS.—To the extent possible, a small business develop10 ment center shall make full use of other Federal and State government pro11 grams that are concerned with aiding small business concerns. 

12 (f) STAFF.—A small business development center shall have a full-time 

13 staff, including a full-time director who shall have the authority to make 

14 expenditures under the small business development center’s budget and who 

15 shall manage the program activities. 

16 (g) ACCESS.—A small business development center shall have access to— 

17 (1) business analysts to counsel, assist, and inform small business 

18 clients; 

19 (2) technology transfer agents to provide state-of-art technology to 

20 small business concerns through coupling with national and regional 

21 technology data sources; 

22 (3) information specialists to assist in providing information searches 

23 and referrals to small business; 

24 (4) part-time professional specialists to conduct research or to pro25 vide counseling assistance whenever the need arises; and 

26 (5) laboratory facilities and adaptive engineering facilities. 

27 (h) USE OF SMALL BUSINESS VENDORS.—A small business development 

28 center shall use and compensate as one of its resources qualified vendors 

29 that are small business concerns, including private management consultants, 

30 private consulting engineers, and private testing laboratories, to provide 

31 services as described in this section to small business concerns on behalf of 

32 the small business development center. 

33 (i) COOPERATION IN THE PROVISION OF SERVICES.—In performing the 

34 services described in subsection (b), a small business development center 

35 shall work in close cooperation with the Administration’s regional and local 

36 offices, the local small business community, and appropriate State and local 

37 agencies. 

38 (j) INFORMATION SHARING SYSTEM.— 

39 (1) IN GENERAL.—The Associate Administrator, in consultation with 

40 the small business development centers, shall develop and implement an 

41 information sharing system. 


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1 (2) FINANCIAL ASSISTANCE.— 

2 (A) IN GENERAL.—Subject to amounts approved in advance in 

3 appropriations Acts, the Administrator may provide grants or 

4 enter into cooperative agreements to one or more small business 

5 development centers to carry out this subsection. 

6 (B) DURATION.—Financial assistance under subparagraph (A) 

7 shall be awarded for a period of not more than 5 years. 

8 (C) MATCHING FUNDS.—The matching funds provisions of sec9 tion 27102 of this title shall not be applicable to a grant or coop10 erative agreement under subparagraph (A). 

11 (3) FUNCTIONS.—The information sharing system shall— 

12 (A) allow small business development centers participating in 

13 the small business development center program to exchange infor14 mation about their programs; and 

15 (B) provide information central to technology transfer. 

16 § 27105. Export enhancement plans 

17 (a) IN GENERAL.—Where appropriate, a small business development cen18 ter shall work in conjunction with the relevant State agency and the Depart19 ment of Commerce to develop a comprehensive plan for enhancing the ex20 port potential of small business concerns located in the State. 

21 (b) STATE OFFICE OF INTERNATIONAL TRADE.—An export enhancement 

22 plan may provide for— 

23 (1) the cofunding and staffing of a State office of international trade 

24 within a small business development center, using joint Federal and 

25 State funding; and 

26 (2) any other appropriate measures directed at improving the export 

27 performance of small business concerns in the State. 

28 § 27106. Assistance from Federal laboratories 

29 (a) IN GENERAL.—A laboratory that is operated and funded by the Fed30 eral Government shall cooperate with the Administrator in developing and 

31 establishing programs to support small business development centers by— 

32 (1) making facilities and equipment available; 

33 (2) providing experiment station capabilities in adaptive engineering; 

34 (3) providing library and technical information processing capabili35 ties; and 

36 (4) providing professional staff for consulting. 

37 (b) REIMBURSEMENT.—The Administrator may reimburse a laboratory 

38 for the provision of services described in subsection (a). 


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1 § 27107. Assistance from the National Science Foundation 

2 The National Science Foundation shall cooperate with the Administrator 

3 and with small business development centers in developing and establishing 

4 programs to support small business development centers. 

5 § 27108. Assistance from the National Aeronautics and 

6 Space Administration 

7 The National Aeronautics and Space Administration and regional tech8 nology transfer centers supported by the National Aeronautics and Space 

9 Administration shall cooperate with small business development centers par10 ticipating in the small business development center program. 

11 § 27109. National Small Business Development Center Advi12 sory Board 

13 (a) ESTABLISHMENT.—There is established a National Small Business 

14 Development Center Advisory Board (referred to in this section as the 

15 ‘‘Board’’). 

16 (b) MEMBERSHIP.— 

17 (1) IN GENERAL.—The Board shall consist of 9 members appointed 

18 from civilian life by the Administrator. 

19 (2) QUALIFICATIONS.—A member of the Board shall be a person of 

20 outstanding qualifications known to be familiar and sympathetic with 

21 small business needs and problems. 

22 (3) REPRESENTATION.—Not more than 3 members of the Board 

23 shall be from universities or their affiliates, and 6 members shall be 

24 from small business concerns or associations representing small busi25 ness concerns. 

26 (4) TERM.—A member of the Board shall serve a term of 3 years, 

27 with one-third of the members changing each year. 

28 (c) CHAIRMAN.—The Board shall elect a chairman. 

29 (d) DUTIES.—The Board shall advise, counsel, and confer with the Asso30 ciate Administrator in carrying out the duties described in this chapter. 

31 (e) MEETINGS.—The Board shall meet at least semiannually and at the 

32 call of the Chairman of the Board. 

33 (f) COMPENSATION.—A member of the Board shall be entitled to be com34 pensated at the rate not in excess of the per diem equivalent of the max35 imum rate payable under section 5376 of title 5 for each day engaged in 

36 activities of the Board and shall be entitled to be reimbursed for expenses 

37 as a member of the Board. 

38 § 27110. Small business development center advisory boards 

39 (a) ESTABLISHMENT.—A small business development center shall estab40 lish an advisory board. 


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1 (b) CHAIRMAN.—A small business development center advisory board 

2 shall elect a chairman. 

3 (c) DUTIES.—A small business development center advisory board shall 

4 advise, counsel, and confer with the director of the small business develop5 ment center on all policy matters pertaining to the operation of the small 

6 business development center, including the persons that may be eligible to 

7 receive assistance from, and how local and regional private consultants may 

8 participate with, the small business development center. 

9 § 27111. Program examination and accreditation 

10 (a) EXAMINATION.—The Administrator shall conduct a biennial pro11 grammatic and financial examination of each small business development 

12 center. 

13 (b) ACCREDITATION.—The Administrator may provide financial support, 

14 by contract or otherwise, to the Association for the purpose of developing 

15 a small business development center accreditation program. 

16 (c) EXTENSION OR RENEWAL OF FINANCIAL AGREEMENTS.— 

17 (1) IN GENERAL.—In extending or renewing a financial assistance 

18 agreement of a small business development center, the Administrator 

19 shall consider the results of the examination and accreditation program 

20 conducted under subsections (a) and (b). 

21 (2) ACCREDITATION REQUIREMENT.— 

22 (A) IN GENERAL.—Except as provided in subparagraph (B), the 

23 Administrator may not renew or extend a financial assistance 

24 agreement with a small business development center unless the 

25 small business development center has been approved under the 

26 accreditation program conducted under this section. 

27 (B) WAIVER.—The Associate Administrator may waive the ac28 creditation requirement on a showing that the small business de29 velopment center is making a good faith effort to obtain accredita30 tion. 

31 § 27112. Limitations on authority 

32 (a) APPROPRIATIONS.—The authority to enter into financial assistance 

33 agreements under this chapter shall be in effect for a fiscal year only to 

34 the extent and in such amounts as are provided in advance in appropria35 tions Acts. 

36 (b) SUSPENSION, TERMINATION, OR FAILURE TO RENEW OR EXTEND

37 FINANCIAL ASSISTANCE AGREEMENT.—After the Administrator enters into 

38 a financial assistance agreement with a qualified entity under this chapter, 

39 the Administrator shall not suspend, terminate, or fail to renew or extend 

40 the financial assistance agreement unless the Administrator provides the 

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1 sion, termination, or failure to renew or extend and affording the qualified 

2 entity an opportunity for a hearing, appeal, or other administrative pro3 ceeding under chapter 5 of title 5. 

4 (c) COMPETITION FOR SUCCESSOR FINANCIAL ASSISTANCE AGREE5 MENTS.—If a financial assistance agreement with a qualified entity under 

6 this chapter is not renewed or extended, any award of a successor financial 

7 assistance agreement to another qualified entity under this chapter shall be 

8 made on a competitive basis. 

9 (d) NO OTHER FUNDING.—The Administrator shall not fund any small 

10 business development center or variation of a small business development 

11 center except as authorized by this chapter. 

12 § 27113. Prohibition of fees for counseling service 

13 A small business development center shall not impose or otherwise collect 

14 a fee or other compensation in connection with the provision of counseling 

15 service under this chapter. 

16 § 27114. Veterans assistance and services program 

17 (a) IN GENERAL.—A small business development center may apply for a 

18 grant under this section to carry out a veterans assistance and services pro19 gram. 

20 (b) ELEMENTS OF PROGRAM.—Under a program carried out with a grant 

21 under this subsection, a small business development center shall— 

22 (1) create a marketing campaign to promote awareness and edu23 cation of the services of the small business development center that are 

24 available to veterans, and to target the campaign toward veterans, serv25 ice-disabled veterans, military units, Federal agencies, and veterans or26 ganizations; 

27 (2) use technology-assisted online counseling and distance learning 

28 technology to overcome the impediments to entrepreneurship faced by 

29 veterans and members of the Armed Forces; and 

30 (3) increase coordination among organizations that assist veterans, 

31 including by establishing virtual integration of service providers and of32 ferings for a one-stop point of contact for veterans who are entre33 preneurs or owners of small business concerns. 

34 (c) AMOUNT OF GRANTS.—A grant under this section shall be for not less 

35 than $75,000 and not more than $250,000. 

36 (d) FUNDING.—Subject to amounts approved in advance in appropria37 tions Acts, the Administration may make grants or enter into cooperative 

38 agreements to carry out this section. 


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1 DIVISION J—WOMEN’S BUSINESS CENTER 

2 PROGRAM 

3 CHAPTER 273—WOMEN’S BUSINESS CENTER PROGRAM 

Sec. 

27301. Definitions. 

27302. Financial assistance. 

27303. Conditions of participation. 

27304. Contract authority. 

27305. 5-year period. 

27306. Criteria. 

27307. Program examination. 

27308. Suspension, termination, or failure to renew or extend financial assistance. 

27309. Continued funding for women’s business centers. 

27310. Privacy requirements. 

27311. Expedited acquisition. 

4 § 27301. Definitions 

5 In this chapter: 

6 (1) ASSISTANT ADMINISTRATOR.—The term ‘‘Assistant Adminis7 trator’’ means the Assistant Administrator of the Office of Women’s 

8 Business Ownership. 

9 (2) PRIVATE NONPROFIT ORGANIZATION.—The term ‘‘private non10 profit organization’’ means an entity that is described in section 501(c) 

11 of the Internal Revenue Code of 1986 (26 U.S.C. 501(c)) and exempt 

12 from taxation under section 501(a) of the Code (26 U.S.C. 501(a)). 

13 (3) WOMEN’S BUSINESS CENTER SITE.—The term ‘‘women’s busi14 ness center site’’ means the location of— 

15 (A) a women’s business center; or 

16 (B) one or more women’s business centers, established in con17 junction with another women’s business center in another location 

18 in a State or region— 

19 (i) that reach a distinct population that would otherwise 

20 not be served; 

21 (ii) the services of which are targeted to women; and 

22 (iii) the scope, function, and activities of which are similar 

23 to those of the primary women’s business center or centers 

24 in conjunction with which it was established. 

25 § 27302. Financial assistance 

26 (a) IN GENERAL.—The Administrator may provide financial assistance to 

27 a private nonprofit organization to conduct a 5-year project for the benefit 

28 of small business concerns owned and controlled by women. 

29 (b) FORMS OF ASSISTANCE.—A project under subsection (a) shall pro30 vide— 

31 (1) assistance in matters relating to financing, including training 

32 and counseling in— 


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1 (A) how to apply for and secure business credit and investment 

2 capital; 

3 (B) preparing and presenting financial statements; and 

4 (C) managing cash flow and other financial operations of a busi5 ness concern; 

6 (2) management assistance, including training and counseling in how 

7 to plan, organize, staff, direct, and control each major activity and 

8 function of a small business concern; and 

9 (3) marketing assistance, including training and counseling in— 

10 (A) identifying and segmenting domestic and international mar11 ket opportunities; 

12 (B) preparing and executing marketing plans; 

13 (C) developing pricing strategies; 

14 (D) locating contract opportunities; 

15 (E) negotiating contracts; and 

16 (F) using varying public relations and advertising techniques. 

17 (c) APPROPRIATIONS.—The authority of the Administrator to agree to 

18 provide financial assistance shall be in effect for each fiscal year only to the 

19 extent and in the amounts as are provided in advance in appropriations 

20 Acts. 

21 § 27303. Conditions of participation 

22 (a) NON-FEDERAL CONTRIBUTIONS.—As a condition of receiving finan23 cial assistance under this chapter, a recipient organization shall agree to ob24 tain, after its application has been approved and notice of award has been 

25 issued, cash contributions from non-Federal sources as follows: 

26 (1) In the first and second years, one non-Federal dollar for each 

27 2 Federal dollars. 

28 (2) In the third, fourth, and fifth years, one non-Federal dollar for 

29 each Federal dollar. 

30 (b) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more than one-half 

31 of the non-Federal sector matching assistance may be in the form of in-kind 

32 contributions that are budget line items only, including office equipment and 

33 office space. 

34 (c) FORM OF FEDERAL CONTRIBUTIONS.— 

35 (1) IN GENERAL.—Financial assistance under this chapter— 

36 (A) may be made by grant, contract, or cooperative agreement; 

37 and 

38 (B) may be provided— 

39 (i) in a lump sum or in installments; and 

40 (ii) in advance or by reimbursement. 


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1 (2) PARTIAL DISBURSEMENT BEFORE NON-FEDERAL FUNDS ARE OB2 TAINED.—The Administrator may disburse up to 25 percent of each 

3 year’s Federal share awarded to a recipient organization after notice 

4 of the award has been issued and before the non-Federal sector match5 ing funds are obtained. 

6 (3) FAILURE TO OBTAIN NON-FEDERAL FUNDING.—If a recipient of 

7 assistance fails to obtain the required non-Federal contribution during 

8 a project— 

9 (A) the recipient shall not be eligible thereafter for advance dis10 bursements— 

11 (i) during the remainder of that project; or 

12 (ii) for any other project for which the recipient is or may 

13 be funded by the Administrator; and 

14 (B) before approving assistance to the recipient for any other 

15 project, the Administrator shall— 

16 (i) specifically determine whether the Administrator be17 lieves that the recipient will be able to obtain the requisite 

18 non-Federal funding; and 

19 (ii) make a written finding stating the reasons for making 

20 the determination. 

21 § 27304. Contract authority 

22 (a) IN GENERAL.—A women’s business center may enter into a contract 

23 with a Federal agency to provide specific assistance to women and other un24 derserved small business concerns. 

25 (b) LIMITATION.—Performance of a contract under subsection (a) should 

26 not hinder a women’s business center in carrying out the terms of the grant, 

27 contract, or cooperative agreement received by the women’s business center 

28 from the Administrator. 

29 § 27305. 5-year period 

30 (a) SUBMISSION OF PLAN.—An organization that applies for financial as31 sistance under this chapter initially shall submit a 5-year plan to the Ad32 ministrator on proposed fundraising and training activities. 

33 (b) ASSISTANCE PERIOD.—An organization may receive financial assist34 ance under this chapter for any one women’s business center site for a max35 imum of 5 years. 

36 § 27306. Criteria 

37 (a) IN GENERAL.—The Administrator shall evaluate and rank applicants 

38 in accordance with predetermined selection criteria that shall be stated in 

39 terms of relative importance. 


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1 (b) AVAILABILITY.—The criteria and their relative importance shall be 

2 made publicly available and stated in each solicitation for applications made 

3 by the Administrator. 

4 (c) CRITERIA INCLUDED.—The criteria shall include— 

5 (1) the experience of the applicant in conducting programs or ongo6 ing efforts designed to impart or upgrade the business skills of women 

7 business owners or potential owners; 

8 (2) the present ability of the applicant to commence a project within 

9 a minimum amount of time; 

10 (3) the ability of the applicant to provide training and services to 

11 a representative number of women who are both socially and economi12 cally disadvantaged; and 

13 (4) the location for the women’s business center site proposed by the 

14 applicant. 

15 § 27307. Program examination 

16 (a) IN GENERAL.—The Administrator shall— 

17 (1) conduct an annual programmatic and financial examination of 

18 each women’s business center under which a women’s business center 

19 shall provide to the Administrator— 

20 (A) an itemized cost breakdown of actual expenditures for costs 

21 incurred during the preceding year; and 

22 (B)(i) documentation regarding the amount of matching assist23 ance from non-Federal sources obtained and expended by the 

24 women’s business center during the preceding year to meet the re25 quirements of section 27303 of this title; and 

26 (ii) with respect to any in-kind contributions described in sec27 tion 27303(b) of this title that were used to satisfy the require28 ments of section 27303 of this title, verification of the existence 

29 and valuation of those contributions; and 

30 (2) analyze the results of each such examination and, based on that 

31 analysis, make a determination regarding the programmatic and finan32 cial viability of each women’s business center. 

33 (b) CONDITIONS FOR CONTINUED FUNDING.—In determining whether to 

34 award a sustainability grant or renew financial assistance to a women’s 

35 business center, the Administrator— 

36 (1) shall consider the results of the most recent examination of the 

37 women’s business center under subsection (a); and 

38 (2) may withhold the award or renewal if the Administration deter39 mines that— 


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1 (A)(i) the women’s business center has failed to provide any in2 formation required to be provided under subparagraph (A) or (B) 

3 of subsection (a)(1); or 

4 (ii) the information provided by the women’s business center is 

5 inadequate; or 

6 (B)(i) the women’s business center has failed to provide any in7 formation required to be provided by the women’s business center 

8 for purposes of the report of the Administrator under section 

9 10711 of this title; or 

10 (ii) the information provided by the women’s business center is 

11 inadequate. 

12 § 27308. Suspension, termination, or failure to renew or ex13 tend financial assistance 

14 After the Administrator agrees to provide financial assistance to an appli15 cant under this chapter, the Administrator shall not suspend, terminate, or 

16 fail to renew or extend the financial assistance unless the Administrator— 

17 (1) provides the applicant with written notification stating the rea18 sons for suspension, termination, or failure to renew or extend; and 

19 (2) affords the applicant an opportunity for a hearing, appeal, or 

20 other administrative proceeding under chapter 5 of title 5. 

21 § 27309. Continued funding for women’s business centers 

22 (a) IN GENERAL.—A nonprofit organization described in subsection (b) 

23 shall be eligible to receive, subject to subsection (c), a 3-year grant under 

24 this subsection. 

25 (b) APPLICABILITY.—A nonprofit organization described in this sub26 section is a nonprofit organization that has received funding under section 

27 27302 of this title. 

28 (c) APPLICATION AND APPROVAL CRITERIA.— 

29 (1) CRITERIA.—Subject to paragraph (2), the Administrator shall 

30 develop and publish criteria for the consideration and approval of appli31 cations by nonprofit organizations under this section. 

32 (2) CONTENTS.—Except as otherwise provided in this section, the 

33 conditions for participation in the grant program under this section 

34 shall be the same as the conditions for participation in the program 

35 under section 29(l) of the Small Business Act (15 U.S.C. 656(l)) (as 

36 in effect on May 25, 2007). 

37 (3) NOTIFICATION.—Not later than 60 days after the date of the 

38 deadline to submit applications for each fiscal year, the Administrator 

39 shall approve or deny any application under this section and notify the 

40 applicant for each such application. 

41 (d) AWARD OF GRANTS.— 


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1 (1) IN GENERAL.—Subject to the availability of appropriations, the 

2 Administrator shall make a grant for the Federal share of the cost of 

3 activities described in the application to each applicant approved under 

4 this section. 

5 (2) AMOUNT.—A grant under this section shall be for not more than 

6 $150,000 for each year of the grant. 

7 (3) FEDERAL SHARE.—The Federal share of the cost of activities 

8 funded under this section shall be not more than 50 percent. 

9 (4) PRIORITY.—In allocating funds made available for grants under 

10 this chapter, the Administrator shall give applications under this sec11 tion priority over first-time applications under 27302 of this title. 

12 (e) RENEWAL.— 

13 (1) IN GENERAL.—The Administrator may renew a grant under this 

14 section for additional 3-year periods, if the nonprofit organization sub15 mits an application for renewal at such time, in such manner, and ac16 companied by such information as the Administrator may establish. 

17 (2) UNLIMITED RENEWALS.—There shall be no limitation on the 

18 number of times that a grant may be renewed under paragraph (1). 

19 § 27310. Privacy requirements 

20 (a) IN GENERAL.—A women’s business center may not disclose the name, 

21 address, or telephone number of any individual or small business concern 

22 receiving assistance under this chapter without the consent of the individual 

23 or small business concern, unless— 

24 (1) the Administrator is ordered to make such a disclosure by a 

25 court in any civil or criminal enforcement action initiated by a Federal 

26 agency or State agency; or 

27 (2) the Administrator considers such a disclosure to be necessary for 

28 the purpose of conducting a financial audit of a women’s business cen29 ter, but a disclosure under this paragraph shall be limited to the infor30 mation necessary for the audit. 

31 (b) USE OF INFORMATION BY THE ADMINISTRATOR.—This section does 

32 not— 

33 (1) restrict access by the Administrator to program activity data; or 

34 (2) preclude the Administrator from using client information (other 

35 than the information described in paragraph (1)) to conduct client sur36 veys. 

37 (c) REGULATIONS.—The Administrator shall issue regulations to establish 

38 standards for requiring disclosures during a financial audit under subsection 

39 (a)(2). 


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1 § 27311. Expedited acquisition 

2 Notwithstanding any other provision of law, the Administrator, acting 

3 through the Assistant Administrator, may use such expedited acquisition 

4 methods as the Administrator determines to be appropriate to carry out this 

5 chapter, except that the Administrator shall ensure that all small business 

6 sources are provided a reasonable opportunity to submit proposals. 

7 DIVISION K—VETERANS AND RESERVISTS 

8 CHAPTER 275—VETERANS AND RESERVISTS 

Sec. 

27501. Definitions. 

27502. Veterans business development interagency task force. 

27503. Advisory Committee on Veterans Business Affairs. 

27504. Participation in transition assistance program workshops. 

27505. Women veterans business training 

27506. Information collection. 

27507. Entrepreneurial training, counseling, and management assistance. 

27508. Outreach. 

27509. Memorandum of understanding with SCORE. 

27510. Memorandum of understanding with the Secretary of Veterans Affairs and the Association. 

27511. Dissemination of information. 

27512. Memorandum of understanding with the Secretary of Labor and the Secretary of Veterans Affairs. 

27513. Data collection. 

27514. National Veterans Business Development Corporation. 

27515. Relief from time limitations. 

9 § 27501. Definitions 

10 In this chapter: 

11 (1) ASSOCIATE ADMINISTRATOR.—The term ‘‘Associate Adminis12 trator’’ means the Associate Administrator for Veterans Business De13 velopment under section 10304(b) of this title. 

14 (2) ADVISORY COMMITTEE.—The term ‘‘Advisory Committee’’ means 

15 the Veterans Business Development Advisory Committee established 

16 under section 27503. 

17 (3) CORPORATION.—The term ‘‘Corporation’’ means the National 

18 Veterans Business Development Corporation established under section 

19 27514. 

20 (4) INTERAGENCY TASK FORCE.—The term ‘‘Interagency Task 

21 Force’’ means the veterans business development interagency task force 

22 established under section 27502. 

23 § 27502. Veterans business development interagency task 

24 force 

25 (a) ESTABLISHMENT.—The President shall establish an interagency task 

26 force to coordinate the efforts of Federal agencies necessary to improve cap27 ital and business development opportunities for, and ensure achievement of 

28 the pre-established Federal contracting goals for, small business concerns 

29 owned and controlled by service-disabled veterans and small business con30 cerns owned and controlled by veterans. 


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1 (b) MEMBERSHIP.—The members of the Interagency Task Force shall in2 clude— 

3 (1) the Administrator, who shall serve as chairperson of the Inter4 agency Task Force; 

5 (2) a senior level representative from— 

6 (A) the Department of Veterans Affairs; 

7 (B) the Department of Defense; 

8 (C) the Administration (in addition to the Administrator); 

9 (D) the Department of Labor; 

10 (E) the Department of the Treasury; 

11 (F) the General Services Administration; 

12 (G) the Office of Management and Budget; and 

13 (3) 4 representatives from a veterans service organization or military 

14 organization or association, selected by the President. 

15 (c) DUTIES.—The Interagency Task Force shall— 

16 (1) consult regularly with veterans service organizations and military 

17 organizations in performing the duties of the Interagency Task Force; 

18 and 

19 (2) coordinate administrative and regulatory activities and develop 

20 proposals relating to— 

21 (A) improving capital access and capacity of small business con22 cerns owned and controlled by service-disabled veterans and small 

23 business concerns owned and controlled by veterans through loans, 

24 surety bonding, and franchising; 

25 (B) ensuring achievement of the pre-established Federal con26 tracting goals for small business concerns owned and controlled by 

27 service-disabled veterans and small business concerns owned and 

28 controlled by veterans through expanded mentor-prote ́ge ́ assistance 

29 and matching such small business concerns with contracting op30 portunities; 

31 (C) increasing the integrity of certifications of status as a small 

32 business concern owned and controlled by service-disabled veterans 

33 or a small business concern owned and controlled by veterans; 

34 (D) reducing paperwork and administrative burdens on veterans 

35 in accessing business development and entrepreneurship opportuni36 ties; 

37 (E) increasing and improving training and counseling services 

38 provided to small business concerns owned and controlled by vet39 erans; and 

40 (F) making other improvements relating to the support for vet41 erans business development by the Federal Government. 


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1 § 27503. Advisory Committee on Veterans Business Affairs 

2 (a) IN GENERAL.—There is established an advisory committee to be 

3 known as the Advisory Committee on Veterans Business Affairs, which shall 

4 serve as an independent source of advice and policy recommendations to— 

5 (1) the Administrator; 

6 (2) the Associate Administrator; 

7 (3) Congress; 

8 (4) the President; and 

9 (5) other United States policymakers. 

10 (b) MEMBERSHIP.— 

11 (1) IN GENERAL.—The Committee shall be composed of 15 members 

12 appointed by the Administrator, of whom— 

13 (A) 8 shall be veterans who are owners of small business con14 cerns; and 

15 (B) 7 shall be representatives of veterans organizations. 

16 (2) POLITICAL AFFILIATION.—Not more than 8 members of the 

17 Committee shall be of the same political party as the President. 

18 (3) PROHIBITION OF FEDERAL EMPLOYMENT.— 

19 (A) IN GENERAL.—Except as provided in subparagraph (B), no 

20 member of the Advisory Committee may serve as an officer or em21 ployee of the United States. 

22 (B) EXCEPTION.—A member of the Advisory Committee who 

23 accepts a position as an officer or employee of the United States 

24 after the date of the member’s appointment to the Advisory Com25 mittee may continue to serve on the Advisory Committee for not 

26 more than 30 days after accepting the position. 

27 (4) TERM OF SERVICE.—THE TERM OF SERVICE OF A MEMBER OF

28 THE ADVISORY COMMITTEE SHALL BE 3 YEARS. 

29 (5) VACANCIES.—The Administrator shall fill any vacancies on the 

30 membership of the Advisory Committee not later than 30 days after 

31 the date on which the vacancy occurs. 

32 (6) CHAIRPERSON.— 

33 (A) IN GENERAL.—The members of the Advisory Committee 

34 shall elect one of the members to be Chairperson of the Advisory 

35 Committee. 

36 (B) VACANCIES IN OFFICE OF CHAIRPERSON.—Any vacancy in 

37 the office of the Chairperson of the Advisory Committee shall be 

38 filled by the Advisory Committee at the first meeting of the Advi39 sory Committee following the date on which the vacancy occurs. 

40 (c) DUTIES.—The duties of the Advisory Committee shall be to— 


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1 (1) review, coordinate, and monitor plans and programs, developed 

2 in the public and private sectors, that affect the ability of small busi3 ness concerns owned and controlled by veterans to obtain capital and 

4 credit and to access markets; 

5 (2) promote the collection of business information and survey data 

6 as they relate to veterans and small business concerns owned and con7 trolled by veterans; 

8 (3) monitor and promote plans, programs, and operations of Federal 

9 agencies that may contribute to the formation and growth of small 

10 business concerns owned and controlled by veterans; 

11 (4) develop and promote initiatives, policies, programs, and plans de12 signed to foster small business concerns owned and controlled by vet13 erans; and 

14 (5) in cooperation with the Corporation, develop a comprehensive 

15 plan, to be updated annually, for joint public-private sector efforts to 

16 facilitate growth and development of small business concerns owned 

17 and controlled by veterans. 

18 (d) POWERS.— 

19 (1) HEARINGS.—Subject to subsection (e), the Advisory Committee 

20 may hold such hearings, sit and act at such times and places, take such 

21 testimony, and receive such evidence as the Advisory Committee con22 siders advisable to carry out its duties. 

23 (2) INFORMATION FROM FEDERAL AGENCIES.—On request of the 

24 Chairperson of the Advisory Committee, the head of any Federal agen25 cy or the Government Accountability Office shall furnish such informa26 tion to the Advisory Committee as the Advisory Committee considers 

27 to be necessary to carry out its duties. 

28 (3) USE OF MAILS.—The Advisory Committee may use the United 

29 States mails in the same manner and under the same conditions as 

30 other Federal agencies. 

31 (4) GIFTS.—The Advisory Committee may accept, use, and dispose 

32 of gifts or donations of services or property. 

33 (e) MEETINGS.— 

34 (1) IN GENERAL.—The Advisory Committee shall meet, not less than 

35 3 times per year, at the call of the Chairperson or at the request of 

36 the Administrator. 

37 (2) LOCATION.—Each meeting of the full Advisory Committee shall 

38 be held at the headquarters of the Small Business Administration in 

39 Washington, District of Columbia. The Administrator shall provide 

40 suitable meeting facilities and such administrative support as is nec41 essary for each full meeting of the Advisory Committee. 


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1 (3) TASK GROUPS.—The Advisory Committee may from time to time 

2 establish temporary task groups as may be necessary in order to carry 

3 out the duties of the Advisory Committee. 

4 (f) COMPENSATION AND EXPENSES.— 

5 (1) NO COMPENSATION.—Members of the Advisory Committee shall 

6 serve without compensation for their service to the Advisory Com7 mittee. 

8 (2) EXPENSES.—The members of the Advisory Committee shall be 

9 reimbursed for travel and subsistence expenses in accordance with sec10 tion 5703 of title 5. 

11 (g) REPORT.—Not later than 30 days after the end of each fiscal year, 

12 the Committee shall submit to Congress and the President a report describ13 ing the activities of the Advisory Committee and any recommendations de14 veloped by the Advisory Committee for the promotion of small business con15 cerns owned and controlled by veterans. 

16 § 27504. Participation in transition assistance program 

17 workshops 

18 (a) IN GENERAL.—The Associate Administrator shall increase veteran 

19 outreach by ensuring that veteran business outreach centers regularly par20 ticipate, on a nationwide basis, in the workshops of the transition assistance 

21 program of the Department of Labor. 

22 (b) PRESENTATIONS.—In carrying out subsection (a), a veteran business 

23 outreach center may provide grants to entities located in transition assist24 ance program locations to make presentations on the opportunities available 

25 from the Administrator for recently separating or separated veterans. A 

26 presentation under this subsection shall include, at a minimum, a descrip27 tion of the entrepreneurial and business training resources available from 

28 the Administrator. 

29 (c) WRITTEN MATERIALS.—The Associate Administrator shall— 

30 (1) create written materials that provide comprehensive information 

31 on self-employment and veterans entrepreneurship, including informa32 tion on resources available from the Administrator on such topics; and 

33 (2) make the materials created under paragraph (1) available to the 

34 Secretary of Labor for inclusion in the transition assistance program 

35 manual. 

36 (d) REPORTS.—The Associate Administrator shall submit to Congress 

37 progress reports on the implementation of this section. 

38 § 27505. Women veterans business training 

39 The Associate Administrator shall— 

40 (1) compile information on existing resources available to women vet41 erans for business training, including resources for— 


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1 (A) vocational and technical education; 

2 (B) general business skills, such as marketing and accounting; 

3 and 

4 (C) business assistance programs targeted to women veterans; 

5 and 

6 (2) disseminate the information compiled under paragraph (1) 

7 through veteran business outreach centers and women’s business cen8 ters. 

9 § 27506. Information collection 

10 (a) IDENTIFICATION.—The Secretary of Veterans Affairs, in consultation 

11 with the Assistant Secretary for Veterans’ Employment and Training and 

12 the Administrator, shall engage in efforts each year to identify small busi13 ness concerns owned and controlled by disabled veterans in the United 

14 States. 

15 (b) PROVISION OF INFORMATION.—The Secretary of Veterans Affairs 

16 shall inform each small business concern identified under this section that 

17 information on Federal procurement is available from the Administrator. 

18 § 27507. Entrepreneurial training, counseling, and manage19 ment assistance 

20 The Administrator shall take such actions as are necessary to ensure that 

21 small business concerns owned and controlled by disabled veterans have ac22 cess to programs established under this subtitle that provide entrepreneurial 

23 training, business development assistance, counseling, and management as24 sistance to small business concerns, including, among others, the small busi25 ness development center program and the SCORE program. 

26 § 27508. Outreach 

27 (a) IN GENERAL.—The Administrator, the Secretary of Veterans Affairs, 

28 and the Assistant Secretary of Labor for Veterans’ Employment and Train29 ing shall develop and implement a program of comprehensive outreach to 

30 assist disabled veterans. 

31 (b) ACTIVITIES.—The program under subsection (a) shall include busi32 ness training and management assistance, employment and relocation coun33 seling, and dissemination of information on veterans’ benefits and veterans’ 

34 entitlements. 

35 § 27509. Memorandum of understanding with the SCORE 

36 (a) IN GENERAL.—The Administrator shall enter into a memorandum of 

37 understanding with SCORE to provide for— 

38 (1) the appointment by SCORE in its national office of an individual 

39 to act as National Veterans Business Coordinator, whose duties shall 

40 relate exclusively to veterans business matters, and who shall be re41 sponsible for the establishment and administration of a program to coVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00294 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 ordinate counseling and training regarding entrepreneurship to vet2 erans through the chapters of SCORE throughout the United States; 

3 (2) the provision of assistance by SCORE in maintaining a toll-free 

4 telephone number and an internet website to provide access for vet5 erans to information about the counseling and training regarding entre6 preneurship available to veterans through SCORE; and 

7 (3) the collection of statistics concerning services provided by 

8 SCORE to service-disabled veterans and other veterans for inclusion in 

9 each annual report published by the Administrator under section 10713 

10 of this title. 

11 (b) RESOURCES.—The Administrator shall provide SCORE such re12 sources as the Administrator determines to be necessary for SCORE to 

13 carry out the requirements of the memorandum of understanding specified 

14 under subsection (a). 

15 § 27510. Memorandum of understanding with the Secretary 

16 of Veterans Affairs and the Association 

17 (a) IN GENERAL.—The Secretary of Veterans Affairs, the Administrator, 

18 and the head of the Association shall enter into a memorandum of under19 standing with respect to entrepreneurial assistance to service-disabled vet20 erans and other veterans through small business development centers and 

21 facilities of the Department of Veterans Affairs. 

22 (b) FORMS OF ASSISTANCE.—Assistance provided under the memo23 randum of understanding shall include— 

24 (1) conducting of studies and research, and the distribution of infor25 mation generated by such studies and research, on the formation, man26 agement, financing, marketing, and operation of small business con27 cerns by veterans; 

28 (2) provision of training and counseling to veterans concerning the 

29 formation, management, financing, marketing, and operation of small 

30 business concerns; 

31 (3) provision of management and technical assistance to the owners 

32 and operators of small business concerns regarding international mar33 kets, the promotion of exports, and the transfer of technology; 

34 (4) provision of assistance and information to veterans regarding 

35 procurement opportunities with Federal, State, and local agencies, es36 pecially such agencies funded in whole or in part with Federal funds; 

37 (5) establishment of an information clearinghouse to collect and dis38 tribute information, including by electronic means, on the assistance 

39 programs of Federal, State, and local governments, and of the private 

40 sector, including information on office locations, key personnel, teleVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00295 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 phone numbers, mail and electronic addresses, and contracting and 

2 subcontracting opportunities; 

3 (6) provision of internet or other distance learning academic instruc4 tion for veterans in business subjects, including accounting, marketing, 

5 and business fundamentals; and 

6 (7) compilation of a list of small business concerns owned and con7 trolled by service-disabled veterans that provide products or services 

8 that could be procured by the United States, and delivery of the list 

9 to each Federal agency. 

10 (c) LIST OF SMALL BUSINESS CONCERNS.—The list described in sub11 section (b)(7)— 

12 (1) shall be delivered in hard copy and electronic form; and 

13 (2) shall include the name and address of each small business con14 cern owned and controlled by service-disabled veterans and the prod15 ucts or services that it provides. 

16 § 27511. Dissemination of information 

17 Each fiscal year, the Secretary of Veterans Affairs shall— 

18 (1) in consultation with the Assistant Secretary of Labor for Vet19 erans’ Employment and Training and the Administrator, identify small 

20 business concerns owned and controlled by veterans in the United 

21 States; and 

22 (2) inform each small business concern owned and controlled by vet23 erans identified under paragraph (1) that information on Federal pro24 curement is available from the Administrator, as provided in section 

25 24115(b) of this title. 

26 § 27512. Memorandum of understanding with the Secretary 

27 of Labor and the Secretary of Veterans Affairs 

28 (a) IN GENERAL.—The Secretary of Labor, the Secretary of Veterans Af29 fairs, and the Administrator shall enter into a memorandum of under30 standing to provide for coordination of vocational rehabilitation services, 

31 technical and managerial assistance, and financial assistance to veterans 

32 (including service-disabled veterans) seeking to employ themselves by form33 ing or expanding small business concerns. 

34 (b) CONTENTS.—The memorandum of understanding shall include rec35 ommendations for expanding existing programs or establishing new pro36 grams to provide services described in subsection (a) or assistance to vet37 erans (including service-disabled veterans). 

38 § 27513. Data collection 

39 The Federal Procurement Data System described in section 6(d)(4)(A) of 

40 the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4)(A)) 

41 shall collect data regarding the percentage and dollar value of prime conVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00296 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 tracts and subcontracts awarded to small business concerns owned and con2 trolled by veterans (including small business concerns owned and controlled 

3 by service-disabled veterans). 

4 § 27514. National Veterans Business Development Corpora5 tion 

6 (a) DEFINITIONS.—In this section: 

7 (1) ADVISORY BOARD.—The term ‘‘Advisory Board’’ means the Pro8 fessional Certification Advisory Board established under subsection (i). 

9 (2) BOARD OF DIRECTORS.—The term ‘‘Board of Directors’’ means 

10 the board of directors of the Corporation. 

11 (3) CORPORATION.—The term ‘‘Corporation’’ means the National 

12 Veterans Business Development Corporation established by subsection 

13 (b). 

14 (b) ESTABLISHMENT.— 

15 (1) IN GENERAL.—There is established a federally chartered cor16 poration to be known as the National Veterans Business Development 

17 Corporation, which shall be incorporated under the laws of the District 

18 of Columbia and which shall have the powers granted in this section. 

19 (2) STATUS.—Notwithstanding any other provision of law, the Cor20 poration is a private entity and not an agency, instrumentality, author21 ity, entity, or establishment of the United States Government. 

22 (c) PURPOSES OF THE CORPORATION.—The purposes of the Corporation 

23 shall be— 

24 (1) to expand the provision of and improve access to technical assist25 ance regarding entrepreneurship for the Nation’s veterans; and 

26 (2) to assist veterans with the formation and expansion of small 

27 business concerns by working with and organizing public and private 

28 resources, including those of— 

29 (A) the Administration; 

30 (B) the Department of Veterans Affairs, Department of Labor, 

31 Department of Commerce, and Department of Defense; 

32 (C) SCORE; 

33 (D) small business development centers; and 

34 (E) the business development staffs of each Federal agency. 

35 (d) BOARD OF DIRECTORS.— 

36 (1) IN GENERAL.—The management of the Corporation shall be 

37 vested in a Board of Directors composed of 9 voting members and 3 

38 nonvoting ex officio members. 

39 (2) APPOINTMENT OF VOTING MEMBERS.—The President shall, after 

40 considering recommendations proposed by the Chairmen and Ranking 

41 Members of the Committee on Small Business and Entrepreneurship 


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1 and Committee on Veterans Affairs of the Senate and the Committee 

2 on Small Business and Committee on Veterans Affairs of the House 

3 of Representatives, appoint United States citizens to be voting mem4 bers of the Board of Directors, not more than 5 of whom shall be mem5 bers of the same political party. 

6 (3) EX OFFICIO MEMBERS.—The Administrator, the Secretary of 

7 Defense, and the Secretary of Veterans Affairs shall serve as the non8 voting ex officio members of the Board of Directors. 

9 (4) CHAIRPERSON.—The voting members of the Board of Directors 

10 shall elect one such member to serve as chairperson of the Board of 

11 Directors for a term of 2 years. 

12 (5) TERMS OF VOTING MEMBERS.— 

13 (A) IN GENERAL.—A voting member of the Board of Directors 

14 shall serve a term of 6 years. 

15 (B) UNEXPIRED TERMS.—A member of the Board of Directors 

16 appointed to fill a vacancy occurring before the expiration of the 

17 term for which the member’s predecessor was appointed shall be 

18 appointed only for the remainder of the term. A member may 

19 serve after the expiration of that member’s term until a successor 

20 takes office. 

21 (6) VACANCIES.—A vacancy on the Board of Directors shall be filled 

22 in the manner in which the original appointment was made. In the case 

23 of a vacancy in the office of the Administrator or the Secretary of Vet24 erans Affairs, and pending the appointment of a successor, an acting 

25 appointee for the vacancy may serve as an ex officio member. 

26 (7) INELIGIBILITY FOR OTHER OFFICES.—No voting member of the 

27 Board of Directors may be an officer or employee of the United States 

28 while serving as a member of the Board of Directors or during the 2- 

29 year period preceding that service. 

30 (8) FAIRNESS, IMPARTIALITY, AND NONDISCRIMINATION.—The 

31 Board of Directors shall administer the affairs of the Corporation fair32 ly, impartially, and without discrimination. 

33 (9) OBLIGATIONS AND EXPENSES.—The Board of Directors shall 

34 prescribe the manner in which the obligations of the Corporation may 

35 be incurred and in which its expenses shall be allowed and paid. 

36 (10) QUORUM.—Five voting members of the Board of Directors shall 

37 constitute a quorum, but a lesser number may hold hearings. 

38 (e) CORPORATE POWERS.—The Corporation shall have the authority— 

39 (1) to adopt and use a corporate seal; 

40 (2) to have succession until dissolved by Act of Congress; 

41 (3) to make contracts or grants; 


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1 (4) to sue and be sued and to file and defend against lawsuits in 

2 Federal or State court; 

3 (5) to appoint, through the actions of the Board of Directors, offi4 cers and employees of the Corporation, to define their duties and re5 sponsibilities and fix their compensation, and to dismiss at will such 

6 officers or employees; 

7 (6) to prescribe, through the actions of the Board of Directors, by8 laws not inconsistent with Federal law and the law of the District of 

9 Columbia, regulating the manner in which its general business may be 

10 conducted and the manner in which the privileges granted to it by law 

11 may be exercised; 

12 (7) to exercise, through the actions of the Board of Directors or duly 

13 authorized officers, all powers specifically granted by this section, and 

14 such incidental powers as are necessary; 

15 (8) to solicit, receive, and disburse funds from private, Federal, 

16 State, and local organizations; 

17 (9) to accept and employ or dispose of in furtherance of the purposes 

18 of this section any money or property, real, personal, or mixed, tangible 

19 or intangible, received by gift, devise, bequest, or otherwise; 

20 (10) to accept voluntary and uncompensated services; and 

21 (11) to use the United States mails in the same manner and under 

22 the same conditions as the Federal agencies. 

23 (f) CORPORATE FUNDS.— 

24 (1) DEPOSIT OF FUNDS.—The Board of Directors shall deposit all 

25 funds of the Corporation in federally chartered and insured depository 

26 institutions until the funds are disbursed under paragraph (2). 

27 (2) DISBURSEMENT OF FUNDS.—Funds of the Corporation may be 

28 disbursed only for purposes that— 

29 (A) are approved by the Board of Directors by a recorded vote 

30 with a quorum present; and 

31 (B) are in accordance with the purposes of the Corporation as 

32 specified in subsection (c). 

33 (g) NETWORK OF INFORMATION AND ASSISTANCE CENTERS.—In car34 rying out the purposes of the Corporation specified in subsection (c), the 

35 Corporation shall establish and maintain a network of information and as36 sistance centers for use by veterans and the public. 

37 (h) PROFESSIONAL CERTIFICATION ADVISORY BOARD.— 

38 (1) IN GENERAL.—Acting through the Board of Directors, the Cor39 poration shall establish a Professional Certification Advisory Board to 

40 create uniform guidelines and standards for the professional certifi41 cation of members of the Armed Services to aid in their efficient and 


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1 orderly transition to civilian occupations and professions and to remove 

2 potential barriers in the areas of licensure and certification. 

3 (2) MEMBERSHIP.— 

4 (A) IN GENERAL.—The members of the Advisory Board— 

5 (i) shall serve without compensation; 

6 (ii) shall meet in the District of Columbia not less than 

7 quarterly; and 

8 (iii) shall be appointed by the Board of Directors as pro9 vided in subparagraphs (B) and (C). 

10 (B) PRIVATE SECTOR MEMBERS.—The Board of Directors shall 

11 appoint not fewer than 7 members for terms of 2 years to rep12 resent private sector organizations and associations, including the 

13 American Association of Community Colleges, the Society for 

14 Human Resource Managers, the Coalition for Professional Certifi15 cation, the Council on Licensure and Enforcement, and the Amer16 ican Legion. 

17 (C) PUBLIC SECTOR MEMBERS.—The Board of Directors 

18 shall— 

19 (i) invite public sector members to serve at the discretion 

20 of Federal agencies; 

21 (ii) encourage the participation of the Under Secretary of 

22 Defense for Personnel and Readiness; 

23 (iii) encourage the participation of two officers from each 

24 branch of the Armed Forces to represent the Training Com25 mands of their branch; and 

26 (iv) seek the participation and guidance of the Assistant 

27 Secretary of Labor for Veterans’ Employment and Training. 

28 (i) ANNUAL REPORTS.—On or before October 1 of each year, the Board 

29 of Directors shall submit to the President and Congress a report that— 

30 (1) describes the activities and accomplishments of the Corporation 

31 for the preceding year; 

32 (2) includes the Corporation’s findings regarding the efforts of Fed33 eral, State, and private organizations to assist veterans in the forma34 tion and expansion of small business concerns; and 

35 (3) includes any recommendations by the Corporation for the pro36 motion of small business concerns owned and controlled by veterans. 

37 § 27515. Relief from time limitations 

38 (a) IN GENERAL.—Any time limitation on any qualification, certification, 

39 or period of participation imposed under this subtitle or subtitle I on any 

40 program that is available to small business concerns shall be extended for 

41 a small business concern that— 


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1 (1) is owned and controlled by— 

2 (A) a veteran who was called or ordered to active duty on or 

3 after September 11, 2001, under a provision of law specified in 

4 section 101(a)(13)(B) of title 10; or 

5 (B) a service-disabled veteran who became such a veteran due 

6 to an injury or illness incurred or aggravated in the active mili7 tary, naval, or air service during a period of active duty pursuant 

8 to a call or order to active duty on or after September 11, 2001, 

9 under a provision of law specified in section 101(a)(13)(B) of title 

10 10; and 

11 (2) was subject to the time limitation during that period of active 

12 duty. 

13 (b) DURATION.—On submission of proper documentation to the Adminis14 trator, the extension of a time limitation under subsection (a) shall be equal 

15 to the period of time that the veteran who owned or controlled a small busi16 ness concern was on active duty as described in subsection (a). 

17 (c) EXCEPTION FOR PROGRAMS SUBJECT TO FEDERAL CREDIT REFORM

18 ACT OF 1990.—Subsections (a) and (b) do not apply to any program subject 

19 to the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). 

20 DIVISION X—MISCELLANEOUS 

21 CHAPTER 291—MISCELLANEOUS 

Sec. 

51101. Management assistance for small business concerns affected by military operations. 

51102. Business grants and cooperative agreements. 

51103. Voluntary agreements and programs. 

51104. Paul D. Coverdell drug-free workplace program. 

22 § 29101. Management assistance for small business concerns 

23 affected by military operations 

24 (a) DEFINITION OF PERIOD OF MILITARY CONFLICT.—In this section, 

25 the term ‘‘period of military conflict’’ means— 

26 (1) a period of war declared by Congress; 

27 (2) a period of national emergency declared by Congress or by the 

28 President; or 

29 (3) a period of a contingency operation (as defined in section 101(a) 

30 of title 10). 

31 (b) ASSISTANCE.—The Administrator shall use, as appropriate, the entre32 preneurial development and management assistance programs of the Admin33 istration, including programs involving State or private sector partners, to 

34 provide business counseling and training to any small business concern ad35 versely affected by the deployment of units of the Armed Forces of the 

36 United States in support of a period of military conflict. 


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1 § 29102. Business grants and cooperative agreements 

2 (a) IN GENERAL.—The Administrator may make grants to and enter into 

3 cooperative agreements with a coalition of private or public entities (or com4 bination of private and public entities)— 

5 (1) to expand business-to-business relationships between small busi6 ness concerns and large business concerns; and 

7 (2) to provide businesses, directly or indirectly, with online informa8 tion and a database of companies that are interested in mentor-prote ́ge ́

9 programs or community-based, statewide, or local business development 

10 programs. 

11 (b) MATCHING REQUIREMENT.—The Administrator may make a grant to 

12 a coalition of private entities under subsection (a) only if the coalition pro13 vides for activities described in paragraph (1) or (2) of subsection (a) in 

14 an amount (in kind or in cash) equal to the grant amount. 

15 § 29103. Voluntary agreements and programs 

16 (a) CONSULTATION.—The President may consult with representatives of 

17 small business concerns with a view to encouraging the making by small 

18 business concerns with the approval of the President of voluntary agree19 ments and programs to further the objectives of this subtitle. 

20 (b) EXEMPTION FROM CERTAIN LAWS.— 

21 (1) IN GENERAL.—No act or omission to act pursuant to this sub22 title that occurs while this subtitle is in effect, if requested by the 

23 President pursuant to a voluntary agreement or program approved 

24 under subsection (a) and determined by the President to be in the pub25 lic interest as contributing to the national defense, shall be construed 

26 to be within the prohibitions of the antitrust laws or the Federal Trade 

27 Commission Act (15 U.S.C. 41 et seq.). 

28 (2) REQUESTS.—A copy of a request intended to be within the cov29 erage of this section, and any modification or withdrawal of such a re30 quest— 

31 (A) shall be furnished to the Attorney General and the Chair32 man of the Federal Trade Commission when made; and 

33 (B) shall be published in the Federal Register unless publication 

34 of the request would, in the opinion of the President, endanger the 

35 national security. 

36 (c) DELEGATION OF AUTHORITY.—The authority granted in subsection 

37 (b) shall be delegated only— 

38 (1) to an official who for the purpose of the delegation shall be re39 quired to be appointed by the President by and with the advice and 

40 consent of the Senate; 


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1 (2) on the condition that the official consult with the Attorney Gen2 eral and the Chairman of the Federal Trade Commission not less than 

3 10 days before making any request or finding under subsection (b); 

4 and 

5 (3) on the condition that the official obtain the approval of the At6 torney General to any request under subsection (b) before making the 

7 request. 

8 (d) WITHDRAWAL OF REQUEST OR FINDING BY THE PRESIDENT OR OF

9 APPROVAL BY THE ATTORNEY GENERAL.—On withdrawal of any request 

10 or finding under this section, or on withdrawal by the Attorney General of 

11 approval of the voluntary agreement or program on which the request or 

12 finding is based, this section shall not apply to any subsequent act, or omis13 sion to act, by reason of the finding or request. 

14 § 29104. Paul D. Coverdell drug-free workplace program 

15 (a) DEFINITIONS.—In this section: 

16 (1) DRUG-FREE WORKPLACE PROGRAM.—The term ‘‘drug-free work17 place program’’ means a program that includes— 

18 (A) a written policy, including a clear statement of— 

19 (i) expectations for workplace behavior; 

20 (ii) prohibitions against reporting to work or working under 

21 the influence of illegal drugs or alcohol; 

22 (iii) prohibitions against the use or possession of illegal 

23 drugs in the workplace; and 

24 (iv) the consequences of violating those expectations and 

25 prohibitions; 

26 (B)(i) drug and alcohol abuse prevention training for a total of 

27 not less than 2 hours for each employee; and 

28 (ii) additional voluntary drug and alcohol abuse prevention 

29 training for employees who are parents; 

30 (C)(i) testing of employees of a small business concern for ille31 gal drugs, with analysis conducted by a drug testing laboratory 

32 certified by the Substance Abuse and Mental Health Services Ad33 ministration, or approved by the College of American Pathologists 

34 for forensic drug testing; and 

35 (ii) a review of each positive test result by a medical review offi36 cer who is not— 

37 (I) an employee of that small business concern; or 

38 (II) an employee or agent of, or any person having a finan39 cial interest in, the laboratory for which the illegal drug test 

40 results are reviewed; 


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1 (D) employee access to an employee assistance program, includ2 ing confidential assessment, referral, and short-term problem reso3 lution; and 

4 (E) continuing alcohol and drug abuse prevention education. 

5 (2) ELIGIBLE INTERMEDIARY.—The term ‘‘eligible intermediary’’ 

6 means an organization— 

7 (A) that has not less than 2 years of experience in carrying out 

8 drug-free workplace programs; 

9 (B) that has a drug-free workplace policy in effect; 

10 (C) that is located in a State, the District of Columbia, or a 

11 territory of the United States; and 

12 (D)(i) the purpose of which is— 

13 (I) to develop comprehensive drug-free workplace programs 

14 or to supply drug-free workplace services; or 

15 (II) to provide other forms of assistance and services to 

16 small business concerns; or 

17 (ii) that is eligible to receive a grant under chapter 2 of the Na18 tional Narcotics Leadership Act of 1988 (21 U.S.C. 1521 et seq.). 

19 (3) EMPLOYEE.—The term ‘‘employee’’ includes— 

20 (A) an applicant for employment; 

21 (B) an employee; 

22 (C) a supervisor; 

23 (D) a manager; 

24 (E) an officer of a small business concern who is active in man25 agement of the small business concern; and 

26 (F) an owner of a small business concern who is active in man27 agement of the small business concern. 

28 (4) MEDICAL REVIEW OFFICER.—The term ‘‘medical review officer’’ 

29 means a licensed physician with knowledge of substance abuse dis30 orders. 

31 (b) ESTABLISHMENT.— 

32 (1) IN GENERAL.—There is established a drug-free workplace dem33 onstration program, under which the Administrator may make grants 

34 to, or enter into cooperative agreements or contracts with, eligible 

35 intermediaries for the purpose of providing financial and technical as36 sistance to small business concerns seeking to establish a drug-free 

37 workplace program. 

38 (2) ADDITIONAL GRANTS FOR TECHNICAL ASSISTANCE.—In addition 

39 to grants under paragraph (1), the Administrator may make grants to, 

40 or enter into cooperative agreements or contracts with, any grantee for 

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1 ness development centers, technical assistance to small business con2 cerns seeking to establish a drug-free workplace program. 

3 (3) 2-YEAR GRANTS.—A grant made under this subsection shall be 

4 for a period of 2 years, subject to an annual performance review by 

5 the Administrator. 

6 (c) PROMOTION OF EFFECTIVE PRACTICES OF ELIGIBLE INTER7 MEDIARIES.— 

8 (1) TECHNICAL ASSISTANCE AND INFORMATION.—The Adminis9 trator, after consultation with the Director of the Center for Substance 

10 Abuse and Prevention, shall provide technical assistance and informa11 tion to each eligible intermediary under subsection (b) regarding the 

12 most effective practices in establishing and carrying out drug-free 

13 workplace programs. 

14 (2) EVALUATION OF PROGRAM.— 

15 (A) DATA COLLECTION AND ANALYSIS.— 

16 (i) IN GENERAL.—An eligible intermediary receiving a 

17 grant under this section shall establish a system to collect 

18 and analyze information regarding the effectiveness of drug19 free workplace programs established with assistance provided 

20 under this section through the intermediary, including infor21 mation regarding any increase or decrease among employees 

22 in drug use, awareness of the adverse consequences of drug 

23 use, and absenteeism, injury, and disciplinary problems re24 lated to drug use. 

25 (ii) REQUIREMENTS.—The system shall conform to such 

26 requirements as the Administrator, after consultation with 

27 the Director of the Center for Substance Abuse and Preven28 tion, may prescribe. 

29 (iii) LIMITATION.—Not more than 5 percent of the amount 

30 of a grant made under subsection (b) shall be used by the eli31 gible intermediary to carry out this paragraph. 

32 (B) METHOD OF EVALUATION.— 

33 (i) IN GENERAL.—The Administrator, after consultation 

34 with the Director of the Center for Substance Abuse and Pre35 vention, shall provide technical assistance and guidance to 

36 each eligible intermediary receiving a grant under subsection 

37 (b) regarding the collection and analysis of information to 

38 evaluate the effectiveness of drug-free workplace programs es39 tablished with assistance provided under this section, includ40 ing the information referred to in paragraph (1). 


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1 (ii) FORMS OF ASSISTANCE.—Assistance under clause (i) 

2 shall include— 

3 (I) the identification of additional information suitable 

4 for measuring the benefits of drug-free workplace pro5 grams to the small business concern and to the small 

6 business concern’s employees; and 

7 (II) the identification of methods suitable for ana8 lyzing such information. 

9 (d) CONTRACT AUTHORITY.—In carrying out this section, the Adminis10 trator may— 

11 (1) contract with public and private entities to provide assistance re12 lated to carrying out the program under this section; and 

13 (2) compensate those entities for provision of that assistance. 

14 (e) EFFECT OF SECTION.—Nothing in this section requires an employer 

15 that attends a program offered by an eligible intermediary to contract for 

16 any service offered by the eligible intermediary. 

17 Subtitle III—Investment Division 

18 DIVISION A—GENERAL PROVISIONS 

19 CHAPTER 301—GENERAL PROVISIONS 

Sec. 

30101. Definitions. 

30102. Implementation of subtitle. 

20 § 30101. Definitions 

21 In this subtitle: 

22 (1) ARTICLES.—The term ‘‘articles’’— 

23 (A) with respect to an incorporated body, means the articles of 

24 incorporation if the incorporated body; and 

25 (B) with respect to any other business entity, means the func26 tional equivalent of the articles of incorporation of an incorporated 

27 body or other similar documents specified by the Administrator. 

28 (2) EMPLOYEE WELFARE BENEFIT PLAN.— 

29 (A) IN GENERAL.—The term ‘‘employee welfare benefit plan’’ 

30 has the meaning given the term in section 3 of the Employee Re31 tirement Income Security Act of 1974 (29 U.S.C. 1002). 

32 (B) INCLUSIONS.—The term ‘‘employee welfare benefit plan’’ 

33 includes any similar plan not covered by the Employee Retirement 

34 Income Security Act of 1974 (29 U.S.C. 1001 et seq.) that has 

35 been established and that is maintained by the Federal Govern36 ment or any State or political subdivision, or any agency or instru37 mentality thereof, for the benefit of employees. 

38 (3) ENERGY SAVING DEBENTURE.—The term ‘‘energy saving deben39 ture’’ means a deferred interest debenture that— 


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1 (A) is issued at a discount; 

2 (B) has a 5-year maturity or a 10-year maturity; 

3 (C) requires no interest payment or annual charge for the first 

4 5 years; 

5 (D) is restricted to energy saving qualified investments; and 

6 (E) is issued at no cost (as defined in section 502 of the Credit 

7 Reform Act of 1990 (2 U.S.C. 661a)) with respect to purchasing 

8 and guaranteeing the debenture. 

9 (4) ENERGY SAVING QUALIFIED INVESTMENT.—The term ‘‘energy 

10 saving qualified investment’’ means an investment in a small business 

11 concern that is primarily engaged in researching, manufacturing, devel12 oping, or providing products, goods, or services that reduce the use or 

13 consumption of nonrenewable energy resources. 

14 (5) LEVERAGE.—The term ‘‘leverage’’ includes— 

15 (A) a debenture purchased or guaranteed by the Administrator; 

16 (B) a participating security purchased or guaranteed by the Ad17 ministrator; and 

18 (C) a preferred security outstanding as of October 1, 1995. 

19 (6) LICENSE.—The term ‘‘license’’ means a license to operate as a 

20 small business investment company issued by the Administrator to a 

21 company under section 30302 of this title. 

22 (7) LICENSEE.— 

23 (A) IN GENERAL.—The term ‘‘licensee’’ means a company that 

24 is issued a license. 

25 (B) INCLUSION.—The term ‘‘licensee’’ includes a specialized 

26 small business investment company. 

27 (8) LIMITED LIABILITY COMPANY.—The term ‘‘limited liability com28 pany’’ means a business entity that is organized and operating in ac29 cordance with a State limited liability company statute approved by the 

30 Administrator. 

31 (9) LONG-TERM.—The term ‘‘long-term’’, used in connection with 

32 equity capital or loan funds invested in a small business concern or 

33 smaller enterprise, means a period of time of not less than one year. 

34 (10) LOW-INCOME GEOGRAPHIC AREA.—The term ‘‘low-income geo35 graphic area’’ means— 

36 (A) a population census tract (or in the case of an area that 

37 is not tracted for population census tracts, the equivalent county 

38 division, as defined by the Bureau of the Census of the Depart39 ment of Commerce for purposes of defining poverty areas), if— 

40 (i) the poverty rate for the population census tract is not 

41 less than 20 percent; 


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1 (ii)(I) in the case of a population census tract that is lo2 cated within a metropolitan area, 50 percent or more of the 

3 households in the population census tract have an income 

4 equal to less than 60 percent of the area median gross in5 come; or 

6 (II) in the case of a population census tract that is not lo7 cated within a metropolitan area, the median household in8 come for the census tract does not exceed 80 percent of the 

9 statewide median household income; or 

10 (iii) as determined by the Administrator based on objective 

11 criteria, a substantial population of low-income individuals re12 side, an inadequate access to investment capital exists, or 

13 other indications of economic distress exist in the population 

14 census tract; or 

15 (B) an area located within— 

16 (i) a HUBZone; 

17 (ii) an urban empowerment zone or urban enterprise com18 munity (as designated by the Secretary of Housing and 

19 Urban Development); or 

20 (iii) a rural empowerment zone or rural enterprise commu21 nity (as designated by the Secretary of Agriculture). 

22 (11) MANAGEMENT OFFICIAL.—The term ‘‘management official’’ 

23 means an officer, director, general partner, manager, employee, agent, 

24 or other participant in the management or conduct of the affairs of a 

25 licensee. 

26 (12) MEMBER.—The term ‘‘member’’, with respect to a licensee that 

27 is a limited liability company, means— 

28 (A) a holder of an ownership interest in the limited liability 

29 company; or 

30 (B) a person otherwise admitted to membership in the limited 

31 liability company. 

32 (13) PARTICIPATING SECURITY.—The term ‘‘participating security’’ 

33 includes— 

34 (A) preferred stock, a preferred limited partnership interest, or 

35 a similar instrument; and 

36 (B) a debenture under the terms of which interest is payable 

37 only to the extent of earnings. 

38 (14) PENSION PLAN.— 

39 (A) IN GENERAL.—The term ‘‘pension plan’’ has the meaning 

40 given the term in section 3 of the Employee Retirement Income 

41 Security Act of 1974 (29 U.S.C. 1002). 


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1 (B) INCLUSIONS.—The term ‘‘pension plan’’ includes— 

2 (i) a public or private pension or retirement plan subject 

3 to the Employee Retirement Income Security Act of 1974 (29 

4 U.S.C. 1001 et seq.); and 

5 (ii) any similar plan not covered by that Act that is estab6 lished and maintained by the Federal Government or any 

7 State or political subdivision, or any agency or instrumen8 tality thereof, for the benefit of employees. 

9 (15) PRIVATE CAPITAL.— 

10 (A) IN GENERAL.—The term ‘‘private capital’’ means the sum 

11 of— 

12 (i)(I) the paid-in capital and paid-in surplus of a corporate 

13 licensee; 

14 (II) the contributed capital of the partners of a partnership 

15 licensee; or 

16 (III) the equity investment of the members of a limited li17 ability company licensee; and 

18 (ii) subject to subparagraph (B), unfunded binding com19 mitments, from investors that meet criteria established by the 

20 Administrator, to contribute capital to the licensee. 

21 (B) LIMITATION.—An unfunded commitment described in sub22 paragraph (A)(ii) may be counted as private capital for purposes 

23 of approval by the Administrator of a request for leverage, but le24 verage shall not be funded based on such a commitment. 

25 (C) EXCLUSIONS.—The term ‘‘private capital’’ does not in26 clude— 

27 (i) funds borrowed by a licensee from any source; 

28 (ii) funds obtained through the issuance of leverage; or 

29 (iii) funds obtained directly or indirectly from a Federal, 

30 State, or local government, or any government agency or in31 strumentality, except for— 

32 (I) funds obtained from the business revenues (exclud33 ing any governmental appropriation) of a federally char34 tered or government-sponsored corporation established 

35 before October 1, 1987; 

36 (II) funds invested by an employee welfare benefit 

37 plan or pension plan; and 

38 (III) qualified nonprivate funds (if the investors of the 

39 qualified nonprivate funds do not control, directly or in40 directly, the management, board of directors, general 

41 partners, or members of the licensee). 


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1 (16) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—The term 

2 ‘‘qualified HUBZone small business concern’’ has the meaning given 

3 the term in section 10101 of this title, except that the exception stated 

4 in paragraph (18)(B) of this section applies. 

5 (17) QUALIFIED NONPRIVATE FUNDS.—The term ‘‘qualified nonpri6 vate funds’’ means— 

7 (A) funds directly or indirectly invested in an applicant or li8 censee on or before August 16, 1982, by any Federal agency, 

9 other than the Administration, under a provision of law that ex10 plicitly requires the inclusion of such funds in the definition of the 

11 term ‘‘private capital’’; 

12 (B) funds directly or indirectly invested in an applicant or li13 censee by a Federal agency under a provision of law enacted after 

14 September 4, 1992, that explicitly requires the inclusion of those 

15 funds in the definition of the term ‘‘private capital’’; and 

16 (C) funds invested in an applicant or licensee by one or more 

17 State or local government entities (including any guarantee ex18 tended by such an entity) in an aggregate amount that does not 

19 exceed 33 percent of the private capital of the applicant or li20 censee. 

21 (18) SMALL BUSINESS CONCERN.— 

22 (A) IN GENERAL.—The term ‘‘small business concern’’ has the 

23 meaning given the term in section 10101 of this title, except as 

24 provided in subparagraph (B). 

25 (B) EXCEPTION.—For purposes of this subtitle, in determining 

26 whether a business concern is a small business concern— 

27 (i) an investment by a venture capital firm, investment 

28 company (including a small business investment company), 

29 employee welfare benefit plan, pension plan, trust, foundation, 

30 or endowment that is exempt from Federal income taxation— 

31 (I) shall not cause a business concern to be considered 

32 not independently owned and operated regardless of the 

33 allocation of control during the investment period under 

34 any investment agreement between the business concern 

35 and the entity making the investment; 

36 (II) shall be disregarded in determining whether a 

37 business concern satisfies size standards established 

38 under section 10101(70) of this title; and 

39 (III) shall be disregarded in determining whether a 

40 small business concern is a smaller enterprise; and 


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1 (ii) in determining whether a business concern satisfies net 

2 income standards established under section 10101(70) of this 

3 title, if the business concern is not required by law to pay 

4 Federal income taxes at the enterprise level, but is required 

5 to pass income through to the shareholders, partners, bene6 ficiaries, or other equitable owners of the business concern, 

7 the net income of the business concern shall be determined 

8 by allowing a deduction in an amount equal to the sum of— 

9 (I) if the business concern is not required by law to 

10 pay State (and local, if any) income taxes at the enter11 prise level, the net income (determined without regard to 

12 this subparagraph), multiplied by the marginal State in13 come tax rate (or by the combined State and local in14 come tax rates, as applicable) that would apply if the 

15 business concern were a corporation; and 

16 (II) the net income (so determined) less any deduction 

17 for State (and local) income taxes calculated under sub18 clause (I), multiplied by the marginal Federal income tax 

19 rate that would apply if the business concern were a cor20 poration. 

21 (19) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY

22 SERVICE-DISABLED VETERANS.—The term ‘‘small business concern 

23 owned and controlled by service-disabled veterans’’ has the meaning 

24 given the term in section 10101 of this title, except that the exception 

25 stated in paragraph (18)(B) of this section applies. 

26 (20) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SO27 CIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.—The term 

28 ‘‘small business concern owned and controlled by socially and economi29 cally disadvantaged individuals’’ has the meaning given the term in sec30 tion 10101 of this title, except that the exception stated in paragraph 

31 (18)(B) of this section applies. 

32 (21) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY VET33 ERANS.—The term ‘‘small business concern owned and controlled by 

34 veterans’’ has the meaning given the term in section 10101 of this title, 

35 except that the exception stated in paragraph (18)(B) of this section 

36 applies. 

37 (22) SMALL BUSINESS INVESTMENT COMPANY.—The term ‘‘small 

38 business investment company’’ means a licensee. 

39 (23) SMALLER ENTERPRISE.— 

40 (A) IN GENERAL.—The term ‘‘smaller enterprise’’ means a 

41 small business concern that, together with its affiliates— 


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1 (i) has— 

2 (I) a net financial worth of not more than $6,000,000, 

3 as of the date on which assistance is provided under this 

4 subtitle to that small business concern; and 

5 (II) an average net income, for the 2-year period pre6 ceding the date on which assistance is provided under 

7 this subtitle to that small business concern, of not more 

8 than $2,000,000, after Federal income taxes (excluding 

9 any carryover losses); or 

10 (ii) satisfies the North American Industry Classification 

11 System size standards established by the Administrator for 

12 the industry in which the small business concern is primarily 

13 engaged. 

14 (B) DETERMINATION OF NET INCOME.—For purposes of sub15 paragraph (A)(i)(II), if a small business concern is not required 

16 by law to pay Federal income tax at the enterprise level, but is 

17 required to pass income through to the shareholders, partners, 

18 beneficiaries, or other equitable owners of the small business con19 cern, the net income of the small business concern shall be deter20 mined by deducting from the gross income of the small business 

21 concern— 

22 (i) in the case of a small business concern that is required 

23 by law to pay State (and local, if any) income taxes at the 

24 enterprise level, the amount that is equal to the net income 

25 of the small business concern determined without regard to 

26 this clause, multiplied by the marginal Federal income tax 

27 rate that would apply if the small business concern were a 

28 corporation; or 

29 (ii) in the case of a small business concern that is not re30 quired by law to pay State (and local, if any) income taxes 

31 at the enterprise level, the amount that is equal to the sum 

32 of— 

33 (I) the net income of the small business concern deter34 mined without regard to this clause, multiplied by the 

35 marginal State income tax rate (or by the combined 

36 State and local income tax rates, as applicable) that 

37 would apply if the small business concern were a cor38 poration; and 

39 (II) the net income of the small business concern de40 termined without regard to this clause, less any deduc41 tion for State (and local) income taxes calculated under 


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1 subclause (I), multiplied by the marginal Federal income 

2 tax rate that would apply if the business concern were 

3 a corporation. 

4 (24) SPECIALIZED SMALL BUSINESS INVESTMENT COMPANY.—The 

5 term ‘‘specialized small business investment company’’ means a com6 pany that— 

7 (A) invests solely in small business concerns that contribute to 

8 a well-balanced national economy by facilitating ownership in 

9 small business concerns by persons whose participation in the free 

10 enterprise system is hampered because of social or economic dis11 advantages; 

12 (B) is organized or chartered under a State business or non13 profit corporations statute or formed as a limited partnership; and 

14 (C) was licensed under subsection (d) of section 301 of the 

15 Small Business Act (15 U.S.C. 681(d)), as in effect before Sep16 tember 30, 1996. 

17 (25) STATE.—The term ‘‘State’’ includes a State, the territories and 

18 possessions of the United States, Puerto Rico, and the District of Co19 lumbia. 

20 (26) THIRD PARTY DEBT.—The term ‘‘third party debt’’ means any 

21 indebtedness for borrowed money, other than indebtedness owed to the 

22 Administrator. 

23 § 30102. Implementation of subtitle 

24 The Administrator— 

25 (1) shall carry out this subtitle so as to improve and stimulate the 

26 national economy in general and the small business segment of the 

27 economy in particular by establishing a program to stimulate and sup28 plement the flow of private equity capital and long-term loan funds 

29 that— 

30 (A) small business concerns need for the sound financing of 

31 their business operations and for their growth, expansion, and 

32 modernization; and 

33 (B) are not available in adequate supply; and 

34 (2) in doing so— 

35 (A) shall ensure the maximum participation of private financing 

36 sources; 

37 (B) shall ensure that any financial assistance provided under 

38 this subtitle does not result in a substantial increase of unemploy39 ment in any area of the country; and 

40 (C) in the award of financial assistance under this subtitle, 

41 when practicable, shall accord priority to small business concerns 


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1 that lease or purchase equipment and supplies produced in the 

2 United States and encourage small business concerns that receive 

3 assistance under this subtitle to continue to lease or purchase 

4 equipment and supplies produced in the United States. 

5 DIVISION B—INVESTMENT PROGRAMS 

6 CHAPTER 303—SMALL BUSINESS INVESTMENT 

7 COMPANY PROGRAM 

Sec. 

30301. Requirements for licensing. 

30302. Licensing procedure. 

30303. Financial institution investments. 

30304. Borrowing power. 

30305. Equity capital for small business concerns. 

30306. Long-term loans to small business concerns. 

30307. Limitation on amount of financing. 

30308. Cooperation with banks and other investors or lenders. 

30309. Advisory services; Federal Reserve Banks as depositories or fiscal agents; investment 

of funds. 

30310. Nonliability of the United States. 

30311. Certifications of eligibility. 

30312. Interest rates. 

30313. Conflicts of interest. 

30314. Ineligibility of guaranteed obligations for purchase by Federal Financing Bank. 

30315. Trust certificates. 

30316. Regulations. 

30317. Unlawful acts and omissions. 

30318. Investigations; examinations; valuations. 

30319. Revocation and suspension of licenses; cease and desist orders. 

30320. Removal or suspension of, or prohibition of participation by, management officials. 

30321. Direct civil enforcement actions. 

30322. Jurisdiction; service of process. 

8 § 30301. Requirements for licensing 

9 (a) IN GENERAL.—To receive or hold a license to operate as a small busi10 ness investment company under this chapter, a company shall meet the re11 quirements of this section. 

12 (b) ORGANIZATION.—The company shall be an incorporated body, limited 

13 liability company, or limited partnership organized and chartered or other14 wise existing under State law solely for the purpose of performing the func15 tions and conducting the activities contemplated under this chapter. 

16 (c) SUCCESSION.—The company— 

17 (1) if it is an incorporated body, shall have succession for a period 

18 of not less than 30 years unless it is sooner dissolved by its share19 holders; and 

20 (2) if it is a limited partnership, shall have succession for a period 

21 of not less than 10 years. 

22 (d) POWERS.—The company shall possess the powers reasonably nec23 essary to perform the functions and conducting the activities contemplated 

24 under this chapter. 

25 (e) AREA OF OPERATION.—The area in which the company is to conduct 

26 its operations, and the establishment of branch offices or agencies (if auVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00314 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 thorized by the articles), shall be subject to the approval of the Adminis2 trator. 

3 (f) ARTICLES.— 

4 (1) IN GENERAL.—The articles of the company shall specify in gen5 eral terms— 

6 (A) the purposes for which the company is formed; 

7 (B) the name of the company; 

8 (C) the area or areas in which its operations are to be carried 

9 on; 

10 (D) the place where its principal office is to be located; and 

11 (E) the amount and classes of its shares of capital stock. 

12 (2) OTHER PROVISIONS.—The articles of the company may contain 

13 any other provisions not inconsistent with this chapter that the com14 pany may see fit to adopt for the regulation of its business and the 

15 conduct of its affairs. 

16 (3) APPROVAL.—The articles of the company and any amendments 

17 to the articles adopted from time to time shall be subject to the ap18 proval of the Administrator. 

19 (g) CAPITAL REQUIREMENTS.— 

20 (1) IN GENERAL.—Except as provided in paragraph (2), the private 

21 capital of the company shall be not less than— 

22 (A) $5,000,000; or 

23 (B) $10,000,000, with respect to a company that seeks author24 ity to issue participating securities to be purchased or guaranteed 

25 by the Administrator under this chapter. 

26 (2) EXCEPTIONS.— 

27 (A) NO UNREASONABLE RISK OF DEFAULT OR LOSS.— 

28 (i) IN GENERAL.—The Administrator may, on a showing of 

29 special circumstances and good cause, permit the private cap30 ital of a company described in paragraph (1)(B) to be less 

31 than $10,000,000, but not less than $5,000,000, if the Ad32 ministrator determines that doing so would not create or oth33 erwise contribute to an unreasonable risk of default or loss 

34 to the Federal Government. 

35 (ii) COMPANIES LICENSED BEFORE SEPTEMBER 30, 1996.— 

36 The Administrator may continue the licensing of a licensee li37 censed under subsection (c) or (d) of section 301 of the Small 

38 Business Act (15 U.S.C. 681(c), (d)) before September 30, 

39 1996, that does not meet the requirements of paragraph (1) 

40 if— 


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1 (I) the licensee certifies in writing that not less than 

2 50 percent of the aggregate dollar amount of its 

3 financings will be provided to smaller enterprises; and 

4 (II) the Administrator determines that doing so would 

5 not create or otherwise contribute to an unreasonable 

6 risk of default or loss to the Federal Government. 

7 (B) VIABLE BUSINESS PLAN AND REASONABLE TIMETABLE.— 

8 (i) IN GENERAL.—Notwithstanding any other provision of 

9 this chapter, the Administrator may, on a showing of special 

10 circumstances and good cause, issue a license with respect to 

11 a company that would otherwise be issued a license, except 

12 that the company does not satisfy the requirements of para13 graph (1), if the company— 

14 (I) has private capital of not less than $3,000,000; 

15 and 

16 (II) has a viable business plan reasonably projecting 

17 profitable operations and a reasonable timetable for 

18 achieving a level of private capital that satisfies the re19 quirements of paragraph (1). 

20 (ii) LEVERAGE.—A company that is licensed pursuant to 

21 the exception provided in clause (i) shall not be eligible to re22 ceive leverage as a licensee until the company satisfies the re23 quirements of paragraph (1). 

24 (3) ADEQUACY.—In addition to the requirements of paragraph (1), 

25 the Administrator shall— 

26 (A) determine whether the private capital of the company is 

27 adequate to ensure a reasonable prospect that the company will be 

28 operated soundly and profitably and managed actively and pru29 dently in accordance with its articles; 

30 (B) determine that the company, both prior to licensing and 

31 prior to approving any request for financing, will be able to make 

32 periodic payments on any debt of the company that is interest33 bearing; and 

34 (C) take into consideration— 

35 (i) the income that the company anticipates on its con36 templated investments; 

37 (ii) the experience of the company’s owners and managers; 

38 (iii) the history of the company as an entity, if any; and 

39 (iv) the company’s financial resources. 

40 (h) DIVERSIFICATION OF OWNERSHIP.—The Administrator shall ensure 

41 that the management of a licensee licensed after September 30, 1996, is 


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1 sufficiently diversified from and unaffiliated with the ownership of the li2 censee in a manner that ensures independence and objectivity in the finan3 cial management and oversight of the investments and operations of the li4 censee. 

5 § 30302. Licensing procedure 

6 (a) SUBMISSION OF APPLICATION.—An applicant for a license to operate 

7 as a small business investment company under this chapter shall submit to 

8 the Administrator an application, in such form and including such docu9 mentation as the Administrator may prescribe. 

10 (b) STATUS.—Not later than 90 days after receipt by the Administrator 

11 of an application under this section, the Administrator shall provide the ap12 plicant with a written report detailing the status of the application and any 

13 requirements remaining for completion of the application. 

14 (c) APPROVAL OR DISAPPROVAL.—Within a reasonable time after receiv15 ing a completed application submitted in accordance with this section (in16 cluding such requirements as the Administrator may prescribe by regula17 tion), the Administrator shall— 

18 (1) approve the application and issue a license to the applicant if the 

19 requirements of this section are satisfied; or 

20 (2) disapprove the application and notify the applicant in writing of 

21 the disapproval. 

22 (d) MATTERS TO BE CONSIDERED.—In reviewing and processing an ap23 plication under this section, the Administrator— 

24 (1) shall determine whether— 

25 (A) the applicant meets the requirements of subsections (g) and 

26 (h) of section 30301 of this title; and 

27 (B) the management of the applicant is qualified and has the 

28 knowledge, experience, and capability necessary to comply with 

29 this chapter; 

30 (2) shall take into consideration— 

31 (A) the need for and availability of financing for small business 

32 concerns in the geographic area in which the applicant is to com33 mence business; 

34 (B) the general business reputation of the owners and manage35 ment of the applicant; and 

36 (C) the probability of successful operations of the applicant, in37 cluding adequate profitability and financial soundness; and 

38 (3) shall not take into consideration any projected shortage or un39 availability of leverage. 

40 (e) FEES.— 


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1 (1) IN GENERAL.—The Administrator may prescribe fees to be paid 

2 by an applicant for a license. 

3 (2) USE OF AMOUNTS.—Fees collected under this subsection— 

4 (A) shall be deposited in the account for salaries and expenses 

5 of the Administration; and 

6 (B) are authorized to be appropriated solely to cover the costs 

7 of licensing examinations. 

8 § 30303. Financial institution investments 

9 (a) CERTAIN BANKS.—Notwithstanding section 23A of the Federal Re10 serve Act (12 U.S.C. 371c), a national bank, or a member bank of the Fed11 eral Reserve System or nonmember insured bank to the extent permitted 

12 under applicable State law, may invest in one or more licensees, or in an 

13 entity established to invest solely in licensees, except that in no event shall 

14 the total amount of such investments of any such bank exceed 5 percent 

15 of the capital and surplus of the bank. 

16 (b) FEDERAL SAVINGS ASSOCIATIONS.—Notwithstanding any other provi17 sion of law, a Federal savings association may invest in one or more licens18 ees, or in an entity established to invest solely in licensees, except that in 

19 no event shall the total amount of such investments by a Federal savings 

20 association exceed 5 percent of the capital and surplus of the Federal sav21 ings association. 

22 § 30304. Borrowing power 

23 (a) AUTHORITY TO ISSUE OBLIGATIONS.—A licensee shall have authority 

24 to borrow money and to issue its securities, promissory notes, or other obli25 gations under such general conditions and subject to such limitations and 

26 regulations as the Administrator may prescribe. 

27 (b) DEBENTURES AND PARTICIPATING SECURITIES.— 

28 (1) AUTHORITY TO PURCHASE OR GUARANTEE.—To encourage the 

29 formation and growth of small business investment companies, the Ad30 ministrator may, when authorized in an appropriation Act, purchase, 

31 or guarantee the timely payment of all principal and interest as sched32 uled on, debentures or participating securities issued by a licensee. 

33 (2) TERMS AND CONDITIONS.—A purchase or guarantee under para34 graph (1) may be made on such terms and conditions as the Adminis35 trator considers appropriate, under regulations prescribed by the Ad36 ministrator. 

37 (3) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full 

38 faith and credit of the United States is pledged to the payment of all 

39 amounts that may be required to be paid under any guarantee under 

40 this subsection. 

41 (4) DEBENTURES.— 


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1 (A) SUBORDINATION.—A debenture purchased or guaranteed by 

2 the Administrator under this subsection shall be subordinate to 

3 any other debenture bond, promissory note, or other debt or obli4 gation of a licensee, unless the Administrator, in the exercise of 

5 reasonable investment prudence and in consideration of the finan6 cial soundness of the licensee, determines otherwise. 

7 (B) TERM; INTEREST.—A debenture purchased or guaranteed 

8 by the Administrator under this subsection— 

9 (i) may be issued for a term of not to exceed 15 years; and 

10 (ii) shall bear interest at a rate not less than— 

11 (I) a rate determined by the Secretary of the Treasury 

12 taking into consideration the current average market 

13 yield on outstanding marketable obligations of the 

14 United States with remaining periods to maturity com15 parable to the average maturities on such debentures, 

16 adjusted to the nearest 0.125 percent; plus 

17 (II) in the case of a debenture obligated after Sep18 tember 30, 2001, an additional charge in an amount es19 tablished annually by the Administrator as necessary to 

20 reduce to zero the cost (as defined in section 502 of the 

21 Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) to 

22 the Administrator of purchasing and guaranteeing de23 bentures under this chapter, which amount— 

24 (aa) may not exceed 1.38 percent per year; and 

25 (bb) which shall be paid to and retained by the 

26 Administrator. 

27 (5) OTHER TERMS AND CONDITIONS.—A debenture or participating 

28 security purchased or guaranteed under this subsection shall also con29 tain such other terms as the Administrator may determine. 

30 (6) TOTAL AMOUNT.—The total amount of debentures and partici31 pating securities of a licensee that may be guaranteed by the Adminis32 trator and outstanding shall not exceed 300 percent of the private cap33 ital of the licensee. 

34 (7) MAXIMUM LEVERAGE.— 

35 (A) IN GENERAL.—The maximum amount of outstanding lever36 age made available to a licensee shall be determined by the 

37 amount of the licensee’s private capital as follows: 

38 (i) If the company has private capital of not more than 

39 $15,000,000, the total amount of leverage shall not exceed 

40 300 percent of the amount of the licensee’s private capital. 


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1 (ii) If the licensee has private capital of more than 

2 $15,000,000 but not more than $30,000,000, the total 

3 amount of leverage shall not exceed— 

4 (I) $45,000,000; plus 

5 (II) 200 percent of the amount of private capital over 

6 $15,000,000. 

7 (iii) If the company has private capital of more than 

8 $30,000,000, the total amount of leverage shall not exceed— 

9 (I) $75,000,000; plus 

10 (II) the lesser of— 

11 (aa) 100 percent of the amount of private capital 

12 over $30,000,000; or 

13 (bb) $15,000,000. 

14 (B) ADJUSTMENTS.—The dollar amounts in clauses (i), (ii), and 

15 (iii) of subparagraph (A) shall be adjusted annually to reflect in16 creases in the Consumer Price Index established by the Bureau of 

17 Labor Statistics of the Department of Labor. 

18 (C) INVESTMENTS IN LOW-INCOME GEOGRAPHIC AREAS.—In 

19 calculating the outstanding leverage of a licensee for the purposes 

20 of subparagraph (A), the Administrator shall not include the 

21 amount of the cost basis of any equity investment made by the 

22 licensee in a smaller enterprise located in a low-income geographic 

23 area, to the extent that the total of such amounts does not exceed 

24 50 percent of the licensee’s private capital. 

25 (D) INVESTMENTS IN ENERGY SAVING SMALL BUSINESSES.— 

26 (i) IN GENERAL.—Subject to clause (ii), in calculating the 

27 outstanding leverage of a company for purposes of subpara28 graph (A), the Administrator shall exclude the amount of the 

29 cost basis of any energy saving qualified investment in a 

30 smaller enterprise made in fiscal year 2009 or any fiscal year 

31 thereafter by a company licensed in the applicable fiscal year. 

32 (ii) LIMITATIONS.— 

33 (I) AMOUNT OF EXCLUSION.—The amount excluded 

34 under clause (i) for a company shall not exceed 33 per35 cent of the private capital of the company. 

36 (II) MAXIMUM INVESTMENT.—A company shall not 

37 make an energy saving qualified investment in any one 

38 entity in an amount equal to more than 20 percent of 

39 the private capital of the company. 

40 (III) OTHER TERMS.—The exclusion of amounts under 

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1 trator may impose to ensure that there is no cost (as de2 fined in section 502 of the Credit Reform Act of 1990 

3 (2 U.S.C. 661a)) with respect to purchasing or guaran4 teeing any debenture involved. 

5 (8) AUTHORITY TO HAVE OUTSTANDING BOTH GUARANTEED DEBEN6 TURES AND GUARANTEED PARTICIPATING SECURITIES.—Subject to the 

7 dollar and percentage limits stated in paragraphs (6) and (7), a li8 censee may issue and have outstanding both guaranteed debentures 

9 and guaranteed participating securities so long as the total amount of 

10 participating securities outstanding does not exceed 200 percent of the 

11 amount of the licensee’s private capital. 

12 (9) MAXIMUM AGGREGATE AMOUNT OF LEVERAGE.— 

13 (A) IN GENERAL.—Except as provided in subparagraph (B), the 

14 aggregate amount of outstanding leverage issued to any licensee 

15 or licensees that are commonly controlled (as determined by the 

16 Administrator) shall not exceed $90,000,000, as adjusted annually 

17 for increases in the Consumer Price Index. 

18 (B) EXCEPTIONS.—The Administrator may, on a case-by-case 

19 basis— 

20 (i) approve an amount of leverage that exceeds the amount 

21 described in subparagraph (A) for licensees under common 

22 control; and 

23 (ii) impose such additional terms and conditions as the Ad24 ministrator determines to be appropriate to minimize the risk 

25 of loss to the Administration in the event of default. 

26 (C) APPLICABILITY OF OTHER PROVISIONS.—Any leverage that 

27 is issued to a licensee or licensees commonly controlled in an 

28 amount that exceeds $90,000,000, whether as a result of an in29 crease in the Consumer Price Index or a decision of the Adminis30 trator, is subject to subsection (d). 

31 (D) INVESTMENTS IN LOW-INCOME GEOGRAPHIC AREAS.—In 

32 calculating the aggregate outstanding leverage of a licensee for 

33 purposes of subparagraph (A), the Administrator shall not include 

34 the amount of the cost basis of any equity investment made by 

35 the licensee in a smaller enterprise located in a low-income geo36 graphic area, to the extent that the total of such amounts does 

37 not exceed 50 percent of the amount of the licensee’s private cap38 ital. 

39 (E) INVESTMENTS IN ENERGY SAVING SMALL BUSINESSES.— 

40 (i) IN GENERAL.—Subject to clause (ii), in calculating the 

41 aggregate outstanding leverage of a company for purposes of 


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1 subparagraph (A), the Administrator shall exclude the 

2 amount of the cost basis of any energy saving qualified in3 vestment in a smaller enterprise made in fiscal year 2009 or 

4 any fiscal year thereafter by a company licensed in the appli5 cable fiscal year. 

6 (ii) LIMITATIONS.— 

7 (I) AMOUNT OF EXCLUSION.—The amount excluded 

8 under clause (i) for a company shall not exceed 33 per9 cent of the private capital of the company. 

10 (II) MAXIMUM INVESTMENT.—A company shall not 

11 make an energy saving qualified investment in any one 

12 entity in an amount equal to more than 20 percent of 

13 the private capital of the company. 

14 (III) OTHER TERMS.—The exclusion of amounts under 

15 clause (i) shall be subject to such terms as the Adminis16 trator may impose to ensure that there is no cost (as de17 fined in section 502 of the Credit Reform Act of 1990 

18 (2 U.S.C. 661a)) with respect to purchasing or guaran19 teeing any debenture involved. 

20 (c) THIRD PARTY DEBT.—The Administrator— 

21 (1) shall not permit a licensee having outstanding leverage to incur 

22 third party debt that would create or contribute to an unreasonable 

23 risk of default or loss to the Federal Government; and 

24 (2) shall permit a licensee having outstanding leverage to incur third 

25 party debt only on such terms and subject to such conditions as the 

26 Administrator may establish by regulation or otherwise. 

27 (d) REQUIRED CERTIFICATIONS.— 

28 (1) IN GENERAL.—The Administrator shall require a licensee, as a 

29 condition of approval of an application for leverage, to certify in writ30 ing— 

31 (A) in the case of a licensee with leverage less than or equal 

32 to $90,000,000, that not less than 20 percent of the licensee’s ag33 gregate dollar amount of financings will be provided to smaller en34 terprises; and 

35 (B) in the case of a licensee with leverage in excess of 

36 $90,000,000, that, in addition to satisfying the requirements of 

37 subparagraph (A), 100 percent of the licensee’s aggregate dollar 

38 amount of financings made in whole or in part with leverage in 

39 excess of $90,000,000 will be provided to smaller enterprises. 

40 (2) LICENSEES UNDER COMMON CONTROL.—Licensees under com41 mon control (as determined by the Administrator) shall be considered 


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1 to be a single licensee for purposes of determining both the applicability 

2 of and compliance with the investment percentage requirements of this 

3 subsection. 

4 (e) CAPITAL IMPAIRMENT.— 

5 (1) IN GENERAL.—Before approving an application for leverage sub6 mitted by a licensee, the Administrator— 

7 (A) shall determine that the private capital of the licensee meets 

8 the requirements of section 30301(g) of this title; and 

9 (B) shall determine (taking into account the nature of the as10 sets of the licensee, the amount and terms of any third party debt 

11 owed by the licensee, and any other factors determined to be rel12 evant by the Administrator) that the private capital of the licensee 

13 has not been impaired to such an extent that the issuance of addi14 tional leverage would create or otherwise contribute to an unrea15 sonable risk of default or loss to the Federal Government. 

16 (2) UNIFORM APPLICABILITY.—Any regulation issued by the Admin17 istrator to implement this subsection that applies to any licensee with 

18 outstanding leverage obtained before the effective date of the regulation 

19 shall apply uniformly to all licensees with outstanding leverage obtained 

20 before that effective date. 

21 (f) REDEMPTION OR REPURCHASE OF PREFERRED STOCK.—Notwith22 standing any other provision of law— 

23 (1) the Administrator may allow the issuer of any preferred stock 

24 sold to the Administrator before November 1, 1989, to redeem or re25 purchase the stock, on payment to the Administrator of an amount less 

26 than the par value of the stock, for a repurchase price determined by 

27 the Administrator after consideration of all relevant factors, includ28 ing— 

29 (A) the market value of the stock; 

30 (B) the value of benefits provided and anticipated to accrue to 

31 the issuer; 

32 (C) the amount of dividends paid, accrued, and anticipated; and 

33 (D) the estimate of the Administrator of any anticipated re34 demption; and 

35 (2) any amounts received by the Administrator from the repurchase 

36 of preferred stock shall be available solely to provide debenture leverage 

37 to licensees having 50 percent or more in aggregate dollar amount of 

38 their financings invested in smaller enterprises. 

39 (g) GUARANTEE OF PAYMENT OF, AND AUTHORITY TO PURCHASE, PAR40 TICIPATING SECURITIES.— 

41 (1) DEFINITIONS.—In this subsection: 


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1 (A) COMBINED CAPITAL.—The term ‘‘combined capital’’ means 

2 the aggregate amount of private capital and outstanding leverage. 

3 (B) EQUITY CAPITAL.— 

4 (i) IN GENERAL.—The term ‘‘equity capital’’ means com5 mon or preferred stock or a similar instrument. 

6 (ii) INCLUSIONS.—The term ‘‘equity capital’’ includes sub7 ordinated debt that has equity features, is not amortized, and 

8 provides for interest payments from appropriate sources, as 

9 determined by the Administrator. 

10 (C) MANAGEMENT EXPENSE.— 

11 (i) IN GENERAL.—The term ‘‘management expense’’ in12 cludes— 

13 (I) salaries; 

14 (II) office expenses; and 

15 (III) the costs of travel, business development, office 

16 and equipment rental, bookkeeping, and the develop17 ment, investigation and monitoring of investments. 

18 (ii) EXCLUSIONS.—The term ‘‘management expense’’ does 

19 not include— 

20 (I) the cost of services provided by specialized outside 

21 consultants, outside lawyers, and outside auditors that 

22 perform services not generally expected of a venture cap23 ital company; or 

24 (II) the cost of services provided by any affiliate of a 

25 licensee that are not part of the normal process of mak26 ing and monitoring venture capital investments. 

27 (D) MAXIMUM TAX LIABILITY.—The term ‘‘maximum tax liabil28 ity’’ means the amount of income allocated to each partner, share29 holder, or member of a licensee (including an allocation to the Ad30 ministrator as if the Administrator were a taxpayer) for Federal 

31 income tax purposes in the income tax return filed or to be filed 

32 by the licensee with respect to the fiscal year of the licensee imme33 diately preceding a distribution described in clause (i) or (ii) of 

34 paragraph (10)(A), multiplied by the highest combined marginal 

35 Federal and State income tax rates for corporations or individuals, 

36 whichever is higher, on each type of income included in the return. 

37 (E) PRIORITIZED PAYMENT.—The term ‘‘prioritized payment’’ 

38 includes— 

39 (i) a dividend on stock; 

40 (ii) interest on a debenture described in section 

41 30101(11)(B) of this title; and 


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1 (iii) a priority return on a preferred limited partnership in2 terest that is paid only to the extent of earnings. 

3 (F) STATE INCOME TAX.—The term ‘‘State income tax’’, in ref4 erence to the State income tax liability of a licensee, means the 

5 income tax of the State in which a licensee’s principal place of 

6 business is located. 

7 (2) AUTHORITY.— 

8 (A) IN GENERAL.—To encourage licensees to provide equity 

9 capital to small business concerns, the Administrator may guar10 antee the payment of the redemption price and prioritized pay11 ments on participating securities issued by licensees. 

12 (B) PURCHASE BY TRUST OR POOL.—A trust or a pool acting 

13 on behalf of the Administrator may purchase participating securi14 ties under subparagraph (A). 

15 (3) TERMS AND CONDITIONS.—A guarantee or purchase under para16 graph (2) shall be made on such terms and conditions as the Adminis17 trator shall establish by regulation. 

18 (4) REDEMPTION OF PARTICIPATING SECURITIES.— 

19 (A) IN GENERAL.—A participating security shall be redeemed 

20 not later than 15 years after its date of issuance for an amount 

21 equal to 100 percent of the original issue price plus the amount 

22 of any accrued prioritized payment. 

23 (B) CONTINUED OBLIGATION.— 

24 (i) IN GENERAL.—If, at the time at which a participating 

25 security is redeemed, whether as scheduled or in advance, the 

26 issuing licensee— 

27 (I) has not paid all accrued prioritized payments in 

28 full as provided in paragraph (5); and 

29 (II) has not sold or otherwise disposed of all invest30 ments subject to profit distributions under paragraph 

31 (11); 

32 the licensee’s obligation to pay accrued and unpaid prioritized 

33 payments shall continue, and payment shall be made from the 

34 realized gain, if any, on the disposition of such investments, 

35 but if on disposition there is no realized gain, the obligation 

36 to pay accrued and unpaid prioritized payments shall be ex37 tinguished. 

38 (ii) LIMITATION.—Between the date on which a partici39 pating security is redeemed and the date on which the li40 censee has paid all accrued prioritized payments in full and 

41 has sold or otherwise disposed of all investments subject to 


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1 profit distributions, the licensee shall not make any in-kind 

2 distributions of such investments unless the licensee pays to 

3 the Administrator such sums, up to the amount of the unreal4 ized appreciation on such investments, as are necessary to 

5 pay in full the accrued prioritized payments. 

6 (5) PRIORITIZED PAYMENTS.—Prioritized payments on a partici7 pating security shall be preferred and cumulative and payable out of 

8 the retained earnings available for distribution (as defined by the Ad9 ministrator) of the issuing licensee at— 

10 (A) a rate determined by the Secretary of the Treasury taking 

11 into consideration the current average market yield on outstanding 

12 marketable obligations of the United States with remaining peri13 ods to maturity comparable to the average maturities on such se14 curities, adjusted to the nearest 0.125 percent; plus 

15 (B) in the case of a participating security obligated after Sep16 tember 30, 2001, an additional charge, in an amount established 

17 annually by the Administrator, as necessary to reduce to zero the 

18 cost (as defined in section 502 of the Federal Credit Reform Act 

19 of 1990 (2 U.S.C. 661a)) to the Administrator of purchasing and 

20 guaranteeing participating securities under this chapter, which 

21 amount may not exceed 1.46 percent per year, and which shall be 

22 paid to and retained by the Administrator. 

23 (6) SENIORITY OF PARTICIPATING SECURITIES ON LIQUIDATION OF

24 LICENSEE.—In the event of liquidation of a licensee, a participating se25 curity issued by the licensee shall be senior in priority for all purposes 

26 to any other equity interest in the licensee without regard to whether 

27 the participating security was issued before, on, or after the date on 

28 which the other equity interest was issued. 

29 (7) INVESTMENT IN EQUITY CAPITAL.—A licensee that issues a par30 ticipating security shall commit to invest or shall invest an amount 

31 equal to the outstanding face value of the participating security solely 

32 in equity capital. 

33 (8) LIMITATION ON AMOUNT OF DEBT.—The only debt (other than 

34 leverage obtained under this chapter) that a licensee that issues a par35 ticipating security may have outstanding shall be temporary debt in an 

36 amount that is equal to not more than 50 percent of the amount of 

37 private capital of the licensee. 

38 (9) USE OF PROCEEDS TO PAY PRINCIPAL ON DEBENTURES.—The 

39 Administrator may permit the proceeds of a participating security 

40 issued by a licensee to be used to pay the principal amount due on an 

41 outstanding debenture guaranteed by the Administrator if— 


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1 (A) the licensee has outstanding equity capital invested in an 

2 amount equal to the amount of the debenture being refinanced; 

3 and 

4 (B) the Administrator receives profit participation on such 

5 terms and conditions as the Administrator may determine, but not 

6 to exceed the percentages specified in paragraph (11). 

7 (10) DISTRIBUTIONS; RETURN OF CAPITAL.— 

8 (A) DISTRIBUTIONS TO PARTNERS, SHAREHOLDERS, AND MEM9 BERS.— 

10 (i) ANNUAL DISTRIBUTIONS.—Notwithstanding subpara11 graph (B), if a licensee is operating as a limited partnership 

12 or as a subchapter S corporation or an equivalent pass13 through entity for tax purposes and if there are no accumu14 lated and unpaid prioritized payments, the licensee may make 

15 annual distributions to the partners, shareholders, or mem16 bers in amounts not greater than each partner’s, share17 holder’s, or member’s maximum tax liability. 

18 (ii) INTERIM DISTRIBUTIONS.—In addition to an annual 

19 distribution, a licensee may make a distribution under this 

20 subparagraph at any time during any calendar quarter based 

21 on an estimate of the maximum tax liability. 

22 (iii) EXCESS DISTRIBUTION.—If a licensee makes one or 

23 more interim distributions for a calendar year, and the aggre24 gate amount of those distributions exceeds the maximum 

25 amount that the licensee could have distributed based on a 

26 single annual computation, any subsequent distribution by the 

27 licensee under this subparagraph shall be reduced by an 

28 amount equal to the excess amount distributed. 

29 (B) DISTRIBUTIONS TO INVESTORS.—After making any dis30 tributions as provided in subparagraph (A), a licensee with partici31 pating securities outstanding may distribute the balance of income 

32 to its investors (including the Administrator, in the percentages 

33 specified in paragraph (11)) if there are no accumulated and un34 paid prioritized payments and if all amounts due the Adminis35 trator under paragraph (11) have been paid in full, subject to the 

36 following conditions: 

37 (i) As of the date of the proposed distribution, if the 

38 amount of leverage outstanding is more than 200 percent of 

39 the amount of private capital, any amounts distributed shall 

40 be made to private investors and to the Administrator in the 

41 ratio of leverage to private capital. 


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1 (ii) As of the date of the proposed distribution, if the 

2 amount of leverage outstanding is more than 100 percent but 

3 not more than 200 percent of the amount of private capital, 

4 50 percent of any amounts distributed shall be made to the 

5 Administrator and 50 percent shall be made to the private in6 vestors. 

7 (iii) If the amount of leverage outstanding is 100 percent, 

8 or less, of the amount of private capital, the ratio shall be 

9 that for distribution of profits as provided in paragraph (11). 

10 (iv) Any amount received by the Administrator under 

11 clause (i) or (ii) shall be applied first as profit participation 

12 as provided in paragraph (11), and any remainder shall be 

13 applied as a prepayment of the principal amount of the par14 ticipating securities or debentures. 

15 (C) RETURN OF CAPITAL TO INVESTORS.— 

16 (i) IN GENERAL.—After making any distributions under 

17 subparagraph (A), a licensee with participating securities out18 standing may return capital to its investors (including the 

19 Administrator) if there are no accumulated and unpaid 

20 prioritized payments and if all amounts due the Adminis21 trator under paragraph (11) have been paid in full. 

22 (ii) RATIO.—Except as provided in clause (iii), any dis23 tribution under this subparagraph shall be made to private 

24 investors and to the Administrator in the ratio of private cap25 ital to leverage as of the date of the proposed distribution. 

26 (iii) NO REQUIRED DISTRIBUTION TO ADMINISTRATOR.—If 

27 a licensee’s amount of leverage outstanding is less than 50 

28 percent of the amount of private capital or $10,000,000, 

29 whichever is less, no distribution shall be required to be made 

30 to the Administrator unless the Administrator determines, on 

31 a case by case basis, to require a distribution to the Adminis32 trator to reduce the amount of outstanding leverage to an 

33 amount less than $10,000,000. 

34 (11) ADMINISTRATOR’S PROFIT PARTICIPATION.— 

35 (A) IN GENERAL.—A licensee that issues participating securities 

36 shall agree to allocate to the Administrator a share of its profits 

37 determined by the relationship of its private capital to the amount 

38 of participating securities guaranteed by the Administrator in ac39 cordance with the following: 


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1 (i) If the total amount of participating securities is 100 

2 percent of private capital or less, the licensee shall allocate to 

3 the Administrator a percentage share computed as follows: 

4 (I)(aa) the amount of participating securities; divided 

5 by 

6 (bb) the amount of private capital; multiplied by 

7 (II) 9 percent. 

8 (ii) If the total amount of participating securities is more 

9 than 100 percent but not greater than 200 percent of private 

10 capital, the licensee shall allocate to the Administrator a per11 centage share computed as follows: 

12 (I) 9 percent; plus 

13 (II)(aa) 3 percent of the amount of participating secu14 rities minus the amount of private capital; divided by 

15 (bb) the amount of private capital. 

16 (B) MANAGEMENT EXPENSES.—For purposes of computing 

17 profit participation under this paragraph, except as otherwise de18 termined by the Administrator, the management expenses of a li19 censee that issues participating securities shall not be greater than 

20 2.5 percent per year of the combined capital of the company, plus 

21 $125,000 if the licensee’s combined capital is less than 

22 $20,000,000. 

23 (C) MAXIMUM PERCENTAGE.— 

24 (i) IN GENERAL.—Notwithstanding any other provision of 

25 this paragraph, unless required by operation of clause (ii), the 

26 total percentage required by this paragraph shall not exceed 

27 12 percent. 

28 (ii) ADJUSTMENT.—If, on the date on which a partici29 pating security is marketed, the interest rate on Treasury 

30 bonds with a maturity of 10 years is a rate other than 8 per31 cent, the Administrator shall adjust the rate specified in sub32 paragraph (A), either higher or lower, by the same percentage 

33 by which the Treasury bond rate is higher or lower than 8 

34 percent. 

35 (D) EFFECT OF PARAGRAPH.—This paragraph does not create 

36 any ownership interest of the Administrator in a licensee. 

37 (12) IN-KIND DISTRIBUTIONS.— 

38 (A) IN GENERAL.—A licensee may make an in-kind distribution 

39 of securities only if the securities are publicly traded and market40 able. 

41 (B) ADMINISTRATOR’S SHARE.— 


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1 (i) IN GENERAL.—A licensee shall deposit the Administra2 tor’s share of an in-kind distribution of securities for disposi3 tion with a trustee designated by the Administrator, or, at 

4 the option of the Administrator and with the agreement of 

5 the licensee, the Administrator may direct the licensee to re6 tain the Administrator’s share. 

7 (ii) TRUSTEE.—A trustee designated by the Administrator 

8 under clause (i) shall be a person that is knowledgeable about 

9 and proficient in the marketing of thinly traded securities. 

10 (iii) SALE.—If the licensee retains the Administrator’s 

11 share, the licensee shall sell the Administrator’s share and 

12 promptly remit the proceeds to the Administrator. 

13 (13) ADDITIONAL RESTRICTIONS AND LIMITATIONS.—Participating 

14 securities guaranteed under this subsection shall be subject to such re15 strictions and limitations, in addition to restrictions and limitations 

16 specified in this subsection, as the Administrator may determine. 

17 (h) COMPUTATION OF AMOUNTS DUE UNDER PARTICIPATING SECURI18 TIES.—The computation of amounts due the Administrator under partici19 pating securities shall be subject to the following terms and conditions: 

20 (1) The formula in subsection (g)(11) shall be computed annually, 

21 and the Administrator shall receive distributions of the Administrator’s 

22 profit participation at the same time as other investors in a licensee. 

23 (2) The formula shall not be modified due to an increase in the pri24 vate capital unless the increase is provided for in a proposed business 

25 plan submitted to and approved by the Administrator. 

26 (3) After a distribution is made, the Administrator’s share of the 

27 distribution shall not be recomputed or reduced. 

28 (4) If a licensee prepays or repays a participating security, the Ad29 ministrator shall receive the requisite participation on the distribution 

30 of profits due to any investments held by the licensee on the date of 

31 the prepayment or repayment. 

32 (5) A licensee that was licensed on or before March 31, 1993, may 

33 exclude from profit participation all investments held on that date. If 

34 such a licensee does so, the Administrator shall determine the amount 

35 of the future expenses attributable to the prior investment. If the li36 censee issues participating securities to refinance debentures as author37 ized in subsection (g)(9), the licensee may not exclude profits on exist38 ing investments under this paragraph. 

39 (i) LEVERAGE FEE.—With respect to leverage granted by the Adminis40 trator to a licensee, the Administrator shall collect from the licensee a nonVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00330 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 refundable fee in an amount equal to 3 percent of the face amount of the 

2 leverage in the following manner: 

3 (1) One percent on the date on which the Administrator enters into 

4 a commitment for leverage with the licensee. 

5 (2) The balance of 2 percent (or 3 percent if no commitment has 

6 been entered into by the Administrator) on the date on which the lever7 age is drawn by the licensee. 

8 (j) CALCULATION OF SUBSIDY RATE.—All fees, interest, and profits re9 ceived and retained by the Administrator under this section shall be in10 cluded in the calculations made by the Director of the Office of Manage11 ment and Budget to offset the cost (as defined in section 502 of the Federal 

12 Credit Reform Act of 1990 (2 U.S.C. 661a)) to the Administrator of pur13 chasing and guaranteeing debentures and participating securities under this 

14 chapter. 

15 (k) PERIODIC ISSUANCE OF GUARANTEES.—The Administrator shall 

16 issue guarantees under this section— 

17 (1) at periodic intervals of not less than every 12 months; and 

18 (2) at such shorter intervals as the Administrator considers appro19 priate, taking into consideration the amount and number of guarantees. 

20 (l) ENERGY SAVING DEBENTURES.—In addition to any other authority 

21 under this subtitle, a small business investment company licensed in fiscal 

22 year 2009 or any fiscal year thereafter may issue energy saving debentures. 

23 § 30305. Equity capital for small business concerns 

24 (a) FUNCTION OF LICENSEES.—It shall be a function of a licensee to pro25 vide a source of equity capital for small business concerns in such manner 

26 and under such terms as the licensee may determine in accordance with the 

27 regulations of the Administrator. 

28 (b) CONDITIONS.—Before a licensee provides any capital to a small busi29 ness concern under this section— 

30 (1) the licensee may require the small business concern to refinance 

31 any or all of its outstanding indebtedness so that the licensee is the 

32 only holder of any evidence of indebtedness of the small business con33 cern; and 

34 (2) except as provided in regulations issued by the Administrator, 

35 the small business concern shall agree that the small business concern 

36 will not thereafter incur any indebtedness without first securing the ap37 proval of the licensee and giving the licensee the first opportunity to 

38 finance the indebtedness. 

39 (c) DIRECT OR COOPERATIVE PROVISION OF CAPITAL.—Equity capital 

40 provided to an incorporated small business concern under this section may 


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1 be provided directly or in cooperation with other investors, incorporated or 

2 unincorporated, through agreements to participate on an immediate basis. 

3 § 30306. Long-term loans to small business concerns 

4 (a) AUTHORIZATION.—A licensee may make a loan, in the manner and 

5 subject to the conditions described in this section, to a small business con6 cern to provide the small business concern with funds needed for sound fi7 nancing, growth, modernization, and expansion. 

8 (b) DIRECT LOANS; LOANS ON PARTICIPATION BASIS.—A loan made 

9 under this section may be made directly or in cooperation with one or more 

10 other lenders through an agreement to participate on an immediate or de11 ferred basis. 

12 (c) MAXIMUM RATE OF INTEREST.— 

13 (1) IN GENERAL.—The maximum rate of interest for a licensee’s 

14 share of a loan made under this section shall be determined by the Ad15 ministrator. 

16 (2) BASIS OF MAXIMUM RATE.—The Administrator shall permit a li17 censee that has issued debentures under this chapter to charge a max18 imum rate of interest based on— 

19 (A) the coupon rate of interest on the outstanding debentures, 

20 determined on an annual basis; plus 

21 (B) such other expenses of the licensee as may be approved by 

22 the Administrator. 

23 (d) MATURITY.—A loan made under this section shall have a maturity 

24 not exceeding 20 years. 

25 (e) SOUNDNESS OF LOAN; SECURITY.—A loan made under this section 

26 shall be of such sound value, or so secured, as reasonably to ensure repay27 ment. 

28 (f) EXTENSION OR RENEWAL.—A licensee that has made a loan to a 

29 small business concern under this section may extend the maturity of or 

30 renew the loan for additional periods, not exceeding 10 years, if the licensee 

31 finds that the extension or renewal will aid in the orderly liquidation of the 

32 loan. 

33 § 30307. Limitation on amount of financing 

34 If a licensee has obtained financing from the Administrator and the fi35 nancing remains outstanding, the aggregate amount of obligations and secu36 rities acquired and for which commitments may be issued by the licensee 

37 under this chapter for any single small business concern shall not exceed 

38 20 percent of the amount of private capital of the licensee, without the ap39 proval of the Administrator. 


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1 § 30308. Cooperation with banks and other investors or 

2 lenders 

3 (a) IN GENERAL.—Under any circumstances in which it is practicable, 

4 the operations of a licensee (including the generation of business) may be 

5 undertaken in cooperation with banks or other investors or lenders, and any 

6 servicing or initial investigation required for loans or acquisitions of securi7 ties by the licensee under this chapter may be handled through such banks 

8 or other investors or lenders on a fee basis. 

9 (b) FEES.—A licensee may receive fees for services rendered to banks and 

10 other investors and lenders. 

11 § 30309. Advisory services; Federal Reserve Banks as deposi12 tories or fiscal agents; investment of funds 

13 (a) ADVISORY SERVICES.—A licensee, under any circumstances in which 

14 it is practicable, may— 

15 (1) use the advisory services of the Federal Reserve System and of 

16 the Department of Commerce that are available for and useful to in17 dustrial and commercial businesses; and 

18 (2) provide consulting and advisory services on a fee basis and have 

19 on its staff persons competent to provide such services. 

20 (b) FEDERAL RESERVE BANK AS DEPOSITORY OR FISCAL AGENT.—A 

21 Federal Reserve bank may act as a depository or fiscal agent for a licensee. 

22 (c) INVESTMENT OF FUNDS.—A licensee that was licensed before October 

23 1, 2004, and has outstanding financings may invest funds not needed for 

24 its operations— 

25 (1) in direct obligations of, or obligations guaranteed as to principal 

26 and interest by, the United States; 

27 (2) in certificates of deposit or other accounts of federally insured 

28 banks or other federally insured depository institutions, if the certifi29 cates or other accounts mature or are otherwise fully available not 

30 more than one year after the date of the investment; or 

31 (3) in mutual funds, securities, or other instruments that consist of, 

32 or represent pooled assets of, investments described in paragraph (1) 

33 or (2). 

34 § 30310. Nonliability of the United States 

35 Except as expressly provided otherwise in this subtitle, nothing in this 

36 subtitle or in any other provision of law shall be deemed to impose any li37 ability on the United States with respect to any obligation entered into, or 

38 stocks issued, or commitments made, by a licensee. 

39 § 30311. Certifications of eligibility 

40 (a) CERTIFICATION BY SMALL BUSINESS CONCERN.—Before receiving fi41 nancial assistance from a licensee, a small business concern shall certify in 


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1 writing that the small business concern meets the applicable eligibility re2 quirements of this chapter. 

3 (b) CERTIFICATION BY LICENSEE.—Before providing financial assistance 

4 to a small business concern under this chapter, a licensee shall certify in 

5 writing that— 

6 (1) the licensee has reviewed the application for assistance of the 

7 small business concern; and 

8 (2) all documentation and other information supports the eligibility 

9 of the applicant. 

10 (c) RETENTION OF CERTIFICATIONS.—A certificate made under sub11 section (a) or (b) shall be retained by a licensee for the duration of the fi12 nancial assistance covered by the certificate. 

13 § 30312. Interest rates 

14 (a) DEFINITION OF INTEREST.—In this section: 

15 (1) IN GENERAL.—The term ‘‘interest’’ means the maximum manda16 tory sum, expressed in dollars or as a percentage rate, that is payable 

17 with respect to a business loan amount received by a small business 

18 concern. 

19 (2) EXCLUSION.—The term ‘‘interest’’ does not include the value, if 

20 any, of a contingent obligation (including a warrant, royalty, or conver21 sion right) granting a licensee an ownership interest in the equity or 

22 increased future revenue of a small business concern receiving the busi23 ness loan. 

24 (b) INTEREST RATE.—A licensee may charge interest on a loan at a rate 

25 that does not exceed the maximum rate prescribed by regulation by the Ad26 ministrator for loans made by any licensee (determined without regard to 

27 any State rate incorporated by the regulation). 

28 (c) PREEMPTION OF STATE LAW.—A State law (including a constitu29 tional provision) shall be preempted for purposes of subsection (a) with re30 spect to a loan if the loan is made before the date, on or after April 1, 

31 1980, on which the State adopts a law, or certifies that the voters of the 

32 State have voted in favor of any provision, constitutional or otherwise, that 

33 states explicitly and by its terms that the State does not want this section 

34 to apply with respect to loans made in the State. 

35 (d) EXCESSIVE INTEREST.— 

36 (1) FORFEITURE.—If the maximum rate of interest authorized under 

37 subsection (a) on a loan made by a licensee exceeds the rate that would 

38 be authorized by applicable State law if the State law were not pre39 empted under subsection (a), the charging of interest at a rate in ex40 cess of the rate authorized by subsection (a) shall be deemed a for41 feiture of the greater of— 


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1 (A) all interest that the loan carries with it; or 

2 (B) all interest that has been agreed to be paid on the loan. 

3 (2) DOUBLE RECOVERY.—In the case of a loan with respect to which 

4 there is a forfeiture of interest under paragraph (1), the person that 

5 paid the interest may recover from the licensee that made the loan, in 

6 a civil action commenced in a court of appropriate jurisdiction not later 

7 than 2 years after the most recent payment of interest, an amount 

8 equal to twice the amount of the interest paid on the loan. 

9 § 30313. Conflicts of interest 

10 (a) IN GENERAL.—For the purpose of controlling conflicts of interest 

11 that may be detrimental to small business concerns, to licensees, to the 

12 shareholders, partners, or members of small business concerns or licensees, 

13 or to the purposes of this subtitle, the Administrator shall adopt regulations 

14 to govern transactions with— 

15 (1) any officer, director, shareholder, partner, or member of a li16 censee; or 

17 (2) any person or concern in which any interest, direct or indirect, 

18 financial or otherwise, is held by any officer, director, shareholder, 

19 partner, or member of— 

20 (A) a licensee; or 

21 (B) any person or concern with an interest, direct or indirect, 

22 financial or otherwise, in a licensee. 

23 (b) CONTENTS.—The regulations under subsection (a) shall include ap24 propriate requirements for public disclosure necessary to the purposes of 

25 this section. 

26 § 30314. Ineligibility of guaranteed obligations for purchase 

27 by Federal Financing Bank 

28 No provision of law authorizes the Federal Financing Bank to acquire— 

29 (1) any obligation the payment of principal or interest on which has 

30 at any time been guaranteed in whole or in part under this chapter; 

31 (2) any obligation that is an interest in an obligation described in 

32 paragraph (1); or 

33 (3) any obligation that is secured by, or substantially all of the value 

34 of which is attributable to, an obligation described in paragraph (1) or 

35 (2). 

36 § 30315. Trust certificates 

37 (a) ISSUANCE.— 

38 (1) IN GENERAL.—The Administrator may issue trust certificates 

39 representing ownership of all or a fractional part of— 

40 (A) debentures issued by a licensee and guaranteed by the Ad41 ministrator under this chapter; or 


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1 (B) participating securities issued by a licensee and purchased 

2 and guaranteed under section 30304 of this title. 

3 (2) TRUST OR POOL.—A trust certificate issued under paragraph (1) 

4 shall be based on and backed by a trust or pool approved by the Ad5 ministrator and composed solely of guaranteed debentures or guaran6 teed participating securities. 

7 (b) GUARANTEE.— 

8 (1) IN GENERAL.—The Administrator may, on such terms and con9 ditions as the Administrator considers appropriate, guarantee the time10 ly payment of the principal of and interest on trust certificates issued 

11 by the Administrator (or an agent of the Administrator) for purposes 

12 of this section. 

13 (2) LIMITATION.—A guarantee shall be limited to the extent of prin14 cipal and interest on the guaranteed debentures or the redemption 

15 price of and priority payments on the participating securities that com16 pose the trust or pool. 

17 (3) PREPAYMENT OR REDEMPTION.— 

18 (A) REDUCTION OF GUARANTEE.—If a debenture in a trust or 

19 pool is prepaid or a participating security is redeemed, voluntarily 

20 or involuntarily, or in the event of default of a debenture or vol21 untary or involuntary redemption of a participating security, the 

22 guarantee of timely payment of principal and interest on the re23 lated trust certificates shall be reduced in proportion to the 

24 amount of principal and interest that the prepaid debenture or re25 deemed participating security and priority payments represent in 

26 the trust or pool. 

27 (B) LIMITATION ON GUARANTEE OF INTEREST.—Interest on a 

28 prepaid or defaulted debenture or a priority payment on a partici29 pating security shall accrue and be guaranteed by the Adminis30 trator only through the date of payment on the guarantee. 

31 (C) CALL OF TRUST CERTIFICATE.—During the term of a trust 

32 certificate, the trust certificate may be called for redemption due 

33 to prepayment or default of all debentures or redemption, vol34 untary or involuntary, of all participating securities residing in the 

35 trust or pool. 

36 (c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 

37 and credit of the United States is pledged to the payment of all amounts 

38 that may be required to be paid under any guarantee of a trust certificate 

39 issued by the Administrator (or an agent of the Administrator) under this 

40 section. 

41 (d) FEES.— 


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1 (1) ADMINISTRATOR.—The Administrator shall not collect a fee for 

2 a guarantee under this section. 

3 (2) AGENT OF THE ADMINISTRATOR.—This subsection does not pre4 clude an agent of the Administrator from collecting a fee approved by 

5 the Administrator for performing the functions described in subsection 

6 (f)(2). 

7 (e) SUBROGATION; OWNERSHIP RIGHTS IN DEBENTURES AND PARTICI8 PATING SECURITIES.— 

9 (1) SUBROGATION.—If the Administrator pays a claim under a guar10 antee issued under this section, the Administrator shall be subrogated 

11 fully to the rights satisfied by the payment. 

12 (2) OWNERSHIP RIGHTS IN DEBENTURES AND PARTICIPATING SECU13 RITIES.—No Federal, State or local law shall preclude or limit the ex14 ercise by the Administrator of the Administrator’s ownership rights in 

15 the debentures or participating securities residing in a trust or pool 

16 against which trust certificates are issued. 

17 (f) CENTRAL REGISTRATION; REGULATION OF BROKERS AND DEAL18 ERS.— 

19 (1) CENTRAL REGISTRATION.—The Administrator shall provide for 

20 a central registration of all trust certificates sold under this section. 

21 (2) AGENT.— 

22 (A) IN GENERAL.—The Administrator shall contract with one or 

23 more agents to carry out on behalf of the Administrator the pool24 ing and the central registration functions of this section including, 

25 notwithstanding any other provision of law— 

26 (i) maintenance on behalf of and under the direction of the 

27 Administrator, such commercial bank accounts or investments 

28 in obligations of the United States as may be necessary to fa29 cilitate trusts or pools backed by debentures or participating 

30 securities guaranteed under this chapter; and 

31 (ii) the issuance of trust certificates to facilitate such 

32 poolings. 

33 (B) BOND OR INSURANCE.—An agent under subparagraph (A) 

34 shall provide a fidelity bond or insurance in such amounts as the 

35 Administrator determines to be necessary to fully protect the in36 terests of the Government. 

37 (3) DISCLOSURE.—The Administrator shall require a seller of a trust 

38 certificate issued under this section to disclose to the purchaser, before 

39 the sale, information on the terms, conditions, and yield of the trust 

40 certificate. 


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1 (4) REGULATION OF BROKERS AND DEALERS.—The Administrator 

2 may regulate brokers and dealers in trust certificates sold under this 

3 section. 

4 (5) EFFECT OF SUBSECTION.—This subsection does not preclude the 

5 use of a book-entry or other electronic form of registration for trust 

6 certificates. 

7 (g) PERIODIC ISSUANCE OF TRUST CERTIFICATES.—The Administrator 

8 shall issue trust certificates under this section— 

9 (1) at periodic intervals of not less than every 12 months; and 

10 (2) at such shorter intervals as the Administrator considers appro11 priate, taking into consideration the amount and number of trust cer12 tificates. 

13 § 30316. Regulations 

14 The Administrator may prescribe regulations governing the operations of 

15 licensees, and regulations to carry out this subtitle, in accordance with the 

16 purposes of this subtitle. 

17 § 30317. Unlawful acts and omissions 

18 (a) VIOLATION BY LICENSEE DEEMED VIOLATION BY PERSON PARTICI19 PATING.—If a licensee violates any provision of this subtitle (including a 

20 regulation issued under this subtitle) by reason of its failure to comply with 

21 the terms of the provision (or regulation) or by reason of its engaging in 

22 any act or practice that constitutes or will constitute a violation of the pro23 vision (or regulation), the violation shall also be a violation and an unlawful 

24 act on the part of any person who, directly or indirectly, authorizes, orders, 

25 participates in, or causes, brings about, counsels, aids, or abets in the com26 mission of any act, practice, or transaction that constitutes or will con27 stitute, in whole or in part, the violation. 

28 (b) BREACH OF FIDUCIARY DUTY.—It shall be unlawful for an officer, 

29 director, employee, agent, or other participant in the management or con30 duct of the affairs of a licensee to engage in any act or practice, or to omit 

31 any act, in breach of the fiduciary duty of the officer, director, employee, 

32 agent, or participant if, as a result of engaging in the act or practice or 

33 of the omission to act, the licensee suffers or is in imminent danger of suf34 fering financial loss or other damage. 

35 (c) DISQUALIFICATION OF OFFICERS AND EMPLOYEES FOR DISHONESTY, 

36 FRAUD, OR BREACH OF TRUST.—Except with the written consent of the 

37 Administrator, it shall be unlawful— 

38 (1) for any person to take office as an officer, director, or employee 

39 of a licensee, or to become an agent or participant in the conduct of 

40 the affairs or management of a licensee, if the person— 

41 (A) has been convicted of— 


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1 (i) a felony; or 

2 (ii) any other criminal offense involving dishonesty or 

3 breach of trust; or 

4 (B) has been found civilly liable in damages, or is permanently 

5 or temporarily enjoined by an order, judgment, or decree of a 

6 court of competent jurisdiction, by reason of any act or practice 

7 involving fraud or breach of trust; or 

8 (2) for any person to continue to serve in any of the above-described 

9 capacities, if the person, after November 6, 1966— 

10 (A) is convicted of— 

11 (i) a felony; or 

12 (ii) any other criminal offense involving dishonesty or 

13 breach of trust; or 

14 (B) is found civilly liable in damages, or is permanently or tem15 porarily enjoined by an order, judgment, or decree of a court of 

16 competent jurisdiction, by reason of any act or practice involving 

17 fraud or breach of trust. 

18 § 30318. Investigations; examinations; valuations 

19 (a) INVESTIGATION OF VIOLATIONS.— 

20 (1) IN GENERAL.—The Administrator may make such investigations 

21 as the Administrator considers necessary to determine whether a li22 censee or any other person has engaged or is about to engage in an 

23 act or practice that constitutes or will constitute a violation of any pro24 vision of this subtitle (including a regulation under this subtitle) or of 

25 an order issued under this subtitle. 

26 (2) STATEMENTS.—The Administrator shall permit any person to 

27 file with the Administrator a statement in writing, under oath or other28 wise as the Administrator shall determine, as to all the facts and cir29 cumstances concerning the matter to be investigated. 

30 (3) POWERS.—For the purpose of any investigation, the Adminis31 trator may administer oaths and affirmations, subpoena witnesses, 

32 compel the attendance of witnesses, take evidence, and require the pro33 duction of any records that are relevant to the inquiry. The attendance 

34 of witnesses and the production of any such records may be required 

35 from any place in the United States. 

36 (4) CONTUMACY OR REFUSAL TO OBEY ORDER OF THE ADMINIS37 TRATOR.— 

38 (A) IN GENERAL.—In case of contumacy by, or refusal to obey 

39 a subpoena issued to, any person (including a licensee), the Ad40 ministrator may invoke the aid of any court of the United States 

41 within the jurisdiction of which the investigation or proceeding is 


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1 carried on, or in which the person resides or carries on business, 

2 in requiring the attendance and testimony of witnesses and the 

3 production of records, and the court may issue an order requiring 

4 the person to appear before the Administrator, to produce records, 

5 or to give testimony touching the matter under investigation. 

6 (B) FAILURE TO OBEY COURT ORDER.—A failure to obey an 

7 order of the court may be punished by the court as a contempt 

8 of court. 

9 (C) PROCESS.—Process in a case under this paragraph may be 

10 served in the judicial district of which the person is an inhabitant 

11 or wherever the person may be found. 

12 (b) EXAMINATIONS OF AND REPORTS BY LICENSEES.— 

13 (1) IN GENERAL.—A licensee shall be subject to examinations made 

14 by direction of the Investment Division of the Administration, which 

15 may be conducted with the assistance of a private sector entity that 

16 has the qualifications to conduct and expertise in conducting such ex17 aminations. 

18 (2) EXAMINATION FEE.—The Administrator may assess against a li19 censee that is examined, as an examination fee, the cost of the exam20 ination (including compensation of the examiners), and the licensee 

21 shall pay the examination fee. 

22 (3) USE OF EXAMINATION FEES.—Examination fees collected under 

23 this subsection shall be deposited in the account for salaries and ex24 penses of the Administration, and are authorized to be appropriated 

25 solely to cover the costs of examinations and other program oversight 

26 activities. 

27 (4) REPORTS.— 

28 (A) IN GENERAL.—A licensee shall make such reports to the 

29 Administrator at such times and in such form as the Adminis30 trator may require. 

31 (B) EXEMPTION.—The Administrator may exempt from a re32 quirement to make a report a licensee that is registered under the 

33 Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) to the 

34 extent necessary to avoid duplication in reporting requirements. 

35 (C) VIOLATION.— 

36 (i) IN GENERAL.—Except as provided in clause (ii), a li37 censee that violates any regulation or written directive issued 

38 by the Administrator requiring the filing of any regular or 

39 special report under subparagraph (A) shall pay to the 

40 United States a civil penalty of not more than $100 for each 

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1 port, unless it is shown that the failure is due to reasonable 

2 cause and not due to willful neglect. 

3 (ii) EXEMPTION FROM REPORTING REQUIREMENTS.— 

4 (I) IN GENERAL.—If the Administrator determines 

5 that granting an exemption would not be inconsistent 

6 with the public interest or the protection of the Adminis7 tration, the Administrator may exempt a licensee from 

8 clause (i)— 

9 (aa) in whole or in part; and 

10 (bb) on such terms and conditions and for such 

11 period of time as the Administrator considers nec12 essary and appropriate. 

13 (II) PROCEDURE.—The Administrator may grant an 

14 exemption under subclause (I)— 

15 (aa) by regulation; or 

16 (bb) on application of an interested party, at any 

17 time previous to a violation described in clause (i), 

18 by order, after notice and opportunity for hearing. 

19 (iii) ALTERNATIVE REQUIREMENTS.—The Administrator 

20 may for purposes of this subparagraph make any alternative 

21 requirement that the Administrator considers to be appro22 priate to a situation. 

23 (iv) CIVIL ACTION.—The civil penalty provided for in this 

24 subparagraph may be recovered in a civil action brought by 

25 the Administrator. 

26 (5) SCOPE OF EXAMINATION.—An examination shall be conducted in 

27 such detail as to determine whether the licensee— 

28 (A) has engaged solely in lawful activities and those con29 templated by this chapter; 

30 (B) has engaged in prohibited conflicts of interest; 

31 (C) has acquired or exercised illegal control of an assisted small 

32 business; 

33 (D) has made investments in small business concerns for not 

34 less than one year; 

35 (E) has invested more than 20 percent of its capital in any indi36 vidual small business, if that restriction is applicable; 

37 (F) has engaged in relending, foreign investments, or passive in38 vestments; or 

39 (G) has charged an interest rate in excess of the maximum per40 mitted by law. 

41 (6) FREQUENCY OF EXAMINATION.— 


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1 (A) IN GENERAL.—A licensee shall be examined at least every 

2 2 years. 

3 (B) WAIVER.—The Administrator may waive an examination of 

4 a licensee— 

5 (i) for up to one additional year if, the Administrator de6 termines that such a delay would be appropriate, based on 

7 the amount of debentures being issued by the licensee and the 

8 repayment record of the licensee, the prior operating experi9 ence of the licensee, the contents and results of the last exam10 ination of the licensee, and the management expertise of the 

11 licensee; or 

12 (ii) if the licensee’s operations have been suspended while 

13 the licensee is involved in litigation or is in receivership. 

14 (c) VALUATIONS.— 

15 (1) FREQUENCY OF VALUATIONS.— 

16 (A) IN GENERAL.—A licensee shall submit to the Administrator 

17 a written valuation of the loans and investments of the licensee 

18 not less often than semiannually, or otherwise on the request of 

19 the Administrator, except that a licensee with no leverage out20 standing shall submit a valuation annually unless the Adminis21 trator determines otherwise. 

22 (B) MATERIAL ADVERSE CHANGES.—Not later than 30 days 

23 after the end of a fiscal quarter of a licensee during which a mate24 rial adverse change in the aggregate valuation of the loans and in25 vestments or operations of the licensee occurs, the licensee shall 

26 notify the Administrator in writing of the nature and extent of 

27 that change. 

28 (C) INDEPENDENT CERTIFICATION.— 

29 (i) IN GENERAL.—Not less than once during each fiscal 

30 year, a licensee shall submit to the Administrator the finan31 cial statements of the licensee, audited by an independent cer32 tified public accountant approved by the Administrator. 

33 (ii) AUDIT REQUIREMENTS.—An audit conducted under 

34 clause (i) shall include— 

35 (I) a review of the procedures and documentation used 

36 by the licensee in preparing the valuations required by 

37 this section; and 

38 (II) a statement by the independent certified public 

39 accountant that the valuations were prepared in con40 formity with the valuation criteria applicable to the li41 censee established in accordance with paragraph (2). 


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1 (2) VALUATION CRITERIA.—A valuation submitted under this sub2 section shall be prepared by the licensee in accordance with valuation 

3 criteria that— 

4 (A) shall be established or approved by the Administrator; and 

5 (B) shall include appropriate safeguards to ensure that the 

6 noncash assets of a licensee are not overvalued. 

7 § 30319. Revocation and suspension of licenses; cease and 

8 desist orders 

9 (a) GROUNDS FOR REVOCATION OR SUSPENSION.—The Administrator 

10 may revoke or suspend a license— 

11 (1) for a false statement knowingly made in a written statement re12 quired under this chapter (including a regulation under this chapter); 

13 (2) for failure, in a written statement required under this chapter 

14 (including a regulation under this chapter), to state a material fact 

15 necessary to make the statement not misleading in the light of the cir16 cumstances under which the statement is made; 

17 (3) for willful or repeated violation of, or willful or repeated failure 

18 to observe, any provision of this chapter (including a regulation under 

19 this chapter); or 

20 (4) for violation of, or failure to observe, a cease and desist order 

21 issued by the Administrator under this section. 

22 (b) GROUNDS FOR CEASE AND DESIST ORDER.—If a licensee or any 

23 other person has not complied with any provision of this subtitle (including 

24 a regulation issued under this subtitle) or is engaging or is about to engage 

25 in any act or practice that constitutes or will constitute a violation of this 

26 subtitle (including a regulation), the Administrator may— 

27 (1) order such licensee or other person— 

28 (A) to cease and desist from the action or failure to act; and 

29 (B) to take such action or to refrain from such action as the 

30 Administrator considers necessary to ensure compliance with this 

31 subtitle (including regulations); and 

32 (2) suspend the license of a licensee against which an order has been 

33 issued until the licensee complies with the order. 

34 (c) PROCEDURE.— 

35 (1) ORDER TO SHOW CAUSE.— 

36 (A) IN GENERAL.—Before revoking or suspending a license 

37 under subsection (a) or issuing a cease and desist order under 

38 subsection (b), the Administrator shall serve on the licensee and 

39 any other person involved an order to show cause why an order 

40 revoking or suspending the license or a cease and desist order 

41 should not be issued. 


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1 (B) CONTENTS.—An order to show cause shall— 

2 (i) contain a statement of the matters of fact and law as3 serted by the Administrator and the legal authority and juris4 diction under which a hearing is to be held; and 

5 (ii) state that a hearing will be held before the Adminis6 trator at a time and place stated in the order. 

7 (2) DETERMINATION.— 

8 (A) IN GENERAL.—If, after hearing (or waiver of hearing), the 

9 Administrator determines on the record that an order revoking or 

10 suspending the license or a cease and desist order should issue, 

11 the Administrator shall promptly issue such an order. 

12 (B) CONTENTS.—An order revoking or suspending a license or 

13 cease and desist order shall— 

14 (i) include a statement of the findings of the Administrator 

15 and the grounds and reasons for the order; and 

16 (ii) state the effective date of the order. 

17 (C) SERVICE.—The Administrator shall cause an order revoking 

18 or suspending a license or cease and desist order to be served on 

19 the licensee and any other person involved. 

20 (d) SUBPOENAS.— 

21 (1) IN GENERAL.—The Administrator may require by subpoena the 

22 attendance and testimony of witnesses and the production of all records 

23 relating to a hearing from any place in the United States. 

24 (2) FEES AND MILEAGE.—A witness summoned before the Adminis25 trator shall be paid by the party at whose instance the witness is called 

26 the same fees and mileage that are paid witnesses in the courts of the 

27 United States. 

28 (3) DISOBEDIENCE OF SUBPOENA.—In case of disobedience to a sub29 poena, the Administrator, or any party to a proceeding before the Ad30 ministrator, may invoke the aid of any court of the United States in 

31 requiring the attendance and testimony of a witness and the production 

32 of a record. 

33 (e) PETITION TO MODIFY OR SET ASIDE ORDER.— 

34 (1) FILING.— 

35 (A) PETITION BY RIGHT.—An order issued by the Adminis36 trator under this section shall be final and conclusive unless, with37 in 30 days after service of the order, the licensee or other person 

38 against which the order is issued appeals to the United States 

39 court of appeals for the circuit in which the licensee has its prin40 cipal place of business by filing with the clerk of the court a petiVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00344 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 tion praying that the Administrator’s order be set aside or modi2 fied in the manner stated in the petition. 

3 (B) PETITION BY LEAVE OF COURT.—After the expiration of 

4 the 30-day period described in subparagraph (A), a petition may 

5 be filed only by leave of court on a showing of reasonable grounds 

6 for failure to file the petition within the 30-day period. 

7 (2) TRANSCRIPT.—The clerk of the court shall immediately cause a 

8 copy of the petition to be delivered to the Administrator, and the Ad9 ministrator shall certify and file in the court a transcript of the record 

10 on which the order complained of was entered. If, before the transcript 

11 is filed, the Administrator amends or sets aside the order, in whole or 

12 in part, the petitioner may amend the petition within such time as the 

13 court may determine, on notice to the Administrator. 

14 (3) STAY OR SUSPENSION.—The filing of a petition for review shall 

15 not of itself stay or suspend the operation of the order of the Adminis16 trator, but the court of appeals may restrain or suspend, in whole or 

17 in part, the operation of the order pending the final hearing and deter18 mination of the petition. 

19 (4) COURT ACTION.—The court may affirm, modify, or set aside the 

20 order of the Administrator. 

21 (5) ADDITIONAL EVIDENCE.— 

22 (A) REOPENING OF HEARING.—If the court determines that the 

23 just and proper disposition of the case requires the taking of addi24 tional evidence, the court shall order the Administrator to reopen 

25 the hearing for the taking of such evidence, in such manner and 

26 on such terms and conditions as the court considers proper. 

27 (B) MODIFIED OR NEW FINDINGS.—The Administrator— 

28 (i) may modify the findings as to the facts, or make new 

29 findings, by reason of the additional evidence so taken; and 

30 (ii) shall file any modified or new findings and the amend31 ments, if any, of the order, with the record of such additional 

32 evidence. 

33 (6) LIMITATION ON CONSIDERATION OF OBJECTIONS.—No objection 

34 to an order of the Administrator shall be considered by the court unless 

35 the objection was urged before the Administrator or, if it was not so 

36 urged, unless there were reasonable grounds for failure to do so. 

37 (7) REVIEW OF JUDGMENT.—A judgment of the court affirming, 

38 modifying, or setting aside an order of the Administrator shall be sub39 ject only to review by the Supreme Court on certification or certiorari 

40 as provided in section 1254 of title 28. 

41 (f) ENFORCEMENT OF ORDER.— 


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1 (1) IN GENERAL.—If a licensee or other person against which an 

2 order is issued under this section fails to obey the order, the Adminis3 trator— 

4 (A) may apply to the United States court of appeals for the cir5 cuit in which the licensee has its principal place of business for 

6 the enforcement of the order; and 

7 (B) shall file a transcript of the record on which the order com8 plained of was entered. 

9 (2) NOTICE.—On filing of an application under paragraph (1), the 

10 court shall cause notice of the application to be served on the licensee 

11 or other person. 

12 (3) EVIDENCE, PROCEDURE, AND JURISDICTION.—The evidence to 

13 be considered, the procedure to be followed, and the jurisdiction of the 

14 court shall be the same as is provided in subsection (e) for an applica15 tion to set aside or modify an order. 

16 § 30320. Removal or suspension of, or prohibition of partici17 pation by, management officials 

18 (a) REMOVAL.— 

19 (1) NOTICE OF REMOVAL.—The Administrator may serve on a man20 agement official a written notice of the Administrator’s intention to re21 move the management official if, in the opinion of the Administrator— 

22 (A) the management official— 

23 (i) has willfully and knowingly committed a substantial vio24 lation of— 

25 (I) this subtitle (including a regulation issued under 

26 this subtitle); or 

27 (II) a cease and desist order that has become final; or 

28 (ii) has willfully and knowingly committed or engaged in an 

29 act, omission, or practice that constitutes a substantial breach 

30 of a fiduciary duty of the management official as a manage31 ment official; and 

32 (B) the violation or breach of fiduciary duty is one involving 

33 personal dishonesty on the part of the management official. 

34 (2) CONTENTS OF NOTICE.—A notice under paragraph (1) shall— 

35 (A) contain a statement of the facts constituting grounds for 

36 the notice; and 

37 (B) establish a time and place at which a hearing will be held 

38 on the proposed removal. 

39 (3) HEARING.— 

40 (A) TIMING.—A hearing on the notice shall be established for 

41 a date not earlier than 30 days nor later than 60 days after the 


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1 date of service of the notice under paragraph (2), unless an earlier 

2 or a later date is set by the Administrator at the request of— 

3 (i) the management official, for good cause; or 

4 (ii) the Attorney General. 

5 (B) CONSENT.—Unless the management official appears at a 

6 hearing under this paragraph in person or by an authorized rep7 resentative, the management official shall be deemed to have con8 sented to the issuance of an order of removal under paragraph (4). 

9 (4) ISSUANCE OF ORDER OF REMOVAL.— 

10 (A) IN GENERAL.—In the event of consent under paragraph 

11 (3)(B), or if on the record made at a hearing under this sub12 section the Administrator finds that any of the grounds specified 

13 in the notice of removal has been established, the Administrator 

14 may issue such orders of removal from office as the Administrator 

15 considers appropriate. 

16 (B) EFFECTIVENESS.—An order under subparagraph (A) 

17 shall— 

18 (i) become effective on the expiration of 30 days after the 

19 date of service on the management official and the licensee 

20 (except in the case of an order issued on consent as described 

21 in paragraph (3)(B), which shall become effective at the time 

22 specified in the order); and 

23 (ii) remain effective and enforceable, except to such extent 

24 as the order is stayed, modified, terminated, or set aside by 

25 action of the Administrator or a reviewing court in accord26 ance with this section. 

27 (b) SUSPENSION OR PROHIBITION OF PARTICIPATION.— 

28 (1) IN GENERAL.—The Administrator may, if the Administrator con29 siders it necessary for the protection of the licensee or the interests of 

30 the Administration, suspend from office or prohibit from further par31 ticipation in any manner in the management or conduct of the affairs 

32 of a licensee, or both, a management official described in subsection 

33 (a)(1) by written notice to that effect served on the management offi34 cial and the licensee. 

35 (2) EFFECTIVENESS.—A suspension or prohibition under paragraph 

36 (1)— 

37 (A) shall become effective on service of notice under paragraph 

38 (1); and 

39 (B) unless stayed by a court in proceedings under paragraph 

40 (3), shall remain in effect— 


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1 (i) until completion of the administrative proceedings pur2 suant to a notice of intention to remove served under sub3 section (a); and 

4 (ii) until such time as the Administrator dismisses the 

5 charges specified in the notice, or, if an order of removal or 

6 prohibition is issued against the management official, until 

7 the effective date of any such order. 

8 (3) JUDICIAL REVIEW.—Not later than 10 days after a management 

9 official is suspended from office or prohibited from participation in the 

10 management or conduct of the affairs of a licensee under paragraph 

11 (1), the management official may apply to the United States district 

12 court for the judicial district in which the principal place of business 

13 of the licensee is located, or the United States District Court for the 

14 District of Columbia, for a stay of the suspension or prohibition pend15 ing the completion of the administrative proceedings pursuant to a no16 tice of intention to remove served on the management official under 

17 subsection (a), and the court shall have jurisdiction to stay the suspen18 sion or prohibition. 

19 (c) SUSPENSION, OR PROHIBITION OF PARTICIPATION, ON CRIMINAL

20 CHARGES.— 

21 (1) IN GENERAL.—If a management official is charged, in an infor22 mation, indictment, or complaint authorized by a United States attor23 ney, with the commission of or participation in a felony involving dis24 honesty or breach of trust, the Administrator may, by written notice 

25 served on the management official, suspend the management official 

26 from office or prohibit the management official from further participa27 tion in any manner in the management or conduct of the affairs of the 

28 licensee, or both. 

29 (2) EFFECTIVENESS.—A suspension or prohibition under paragraph 

30 (1) shall remain in effect— 

31 (A) until the subject information, indictment, or complaint is fi32 nally disposed of; or 

33 (B) until it is terminated by the Administrator. 

34 (3) CONVICTION.—If a judgment of conviction with respect to an of35 fense described in paragraph (1) is entered against a management offi36 cial, at such time as the judgment is not subject to further appellate 

37 review, the Administrator may issue and serve on the management offi38 cial an order removing the management official from office, which re39 moval shall become effective on service of a copy of the order on the 

40 licensee. 


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1 (4) DISMISSAL OR OTHER DISPOSITION.—A finding of not guilty or 

2 other disposition of charges described in paragraph (1) shall not pre3 clude the Administrator from thereafter instituting proceedings to sus4 pend or remove the management official from office, or to prohibit the 

5 management official from participation in the management or conduct 

6 of the affairs of the licensee, or both, under subsection (a) or (b). 

7 (d) PROCEDURE.— 

8 (1) HEARING VENUE.—A hearing under this section shall be— 

9 (A) held in the Federal judicial district or in the territory in 

10 which the principal office of the licensee is located, unless the 

11 party afforded the hearing consents to another place; and 

12 (B) conducted in accordance with chapter 5 of title 5. 

13 (2) ISSUANCE OF ORDERS.—After a hearing under this section, and 

14 not later than 90 days after the Administrator notifies the parties that 

15 the case has been submitted for final decision, the Administrator 

16 shall— 

17 (A) render a decision in the matter (which shall include findings 

18 of fact on which the decision is predicated); and 

19 (B) serve on each party to the proceeding an order or orders 

20 consistent with this section. 

21 (3) MODIFICATION OF ORDER.—The Administrator may modify, ter22 minate, or set aside an order issued under this section— 

23 (A) at any time, on such notice, and in such manner as the Ad24 ministrator considers proper, unless a petition for review is timely 

25 filed in a court of appeals of the United States, as provided in 

26 paragraph (4)(B), and thereafter until the record in the pro27 ceeding has been filed in accordance with paragraph (4)(C); and 

28 (B) on such filing of the record, with permission of the court. 

29 (4) JUDICIAL REVIEW.— 

30 (A) IN GENERAL.—Judicial review of an order issued under this 

31 section shall be exclusively as provided in this subsection. 

32 (B) PETITION FOR REVIEW.—A party to a hearing under this 

33 section may obtain a review of an order issued under paragraph 

34 (2) (other than an order issued with the consent of the manage35 ment official concerned or an order issued under subsection (c)) 

36 by filing in the court of appeals of the United States for the cir37 cuit in which the principal office of the licensee is located, or in 

38 the United States Court of Appeals for the District of Columbia 

39 Circuit, not later than 30 days after the date of service of the 

40 order, a written petition praying that the order of the Adminis41 trator be modified, terminated, or set aside. 


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1 (C) NOTIFICATION TO THE ADMINISTRATOR.—A copy of a peti2 tion filed under subparagraph (B) shall be forthwith transmitted 

3 by the clerk of the court to the Administrator, and thereupon the 

4 Administrator shall file in the court the record in the proceeding, 

5 as provided in section 2112 of title 28. 

6 (D) COURT JURISDICTION.—On the filing of a petition under 

7 subparagraph (B)— 

8 (i) the court shall have jurisdiction, which, on the filing of 

9 the record under subparagraph (C), shall be exclusive, to af10 firm, modify, terminate, or set aside, in whole or in part, the 

11 order of the Administrator; 

12 (ii) review of the proceedings shall be had as provided in 

13 chapter 7 of title 5; and 

14 (iii) the judgment and decree of the court shall be final, ex15 cept that the judgment and decree shall be subject to review 

16 by the Supreme Court on certiorari as provided in section 

17 1254 of title 28. 

18 (E) JUDICIAL REVIEW NOT A STAY.—The commencement of 

19 proceedings for judicial review under this paragraph shall not, un20 less specifically ordered by the court, operate as a stay of any 

21 order issued by the Administrator under this section. 

22 § 30321. Direct civil enforcement actions 

23 (a) FORFEITURE OF RIGHTS, PRIVILEGES, AND FRANCHISES.— 

24 (1) IN GENERAL.—If a licensee violates or fails to comply with any 

25 provision of this subtitle (including a regulation prescribed under this 

26 subtitle), all of the licensee’s rights, privileges, and franchises derived 

27 from this subtitle may be forfeited. 

28 (2) CIVIL ACTION.—Before a licensee is declared dissolved, or its 

29 rights, privileges, and franchises forfeited, any noncompliance with or 

30 violation of this subtitle shall be determined by a court of the United 

31 States of competent jurisdiction in a civil action brought in the district, 

32 territory, or other place subject to the jurisdiction of the United States 

33 in which the principal office of the licensee is located. Any such civil 

34 action shall be brought by the United States at the instance of the Ad35 ministrator or the Attorney General. 

36 (b) INJUNCTIONS AND OTHER ORDERS.— 

37 (1) IN GENERAL.—If a licensee or any other person engages or is 

38 about to engage in an act or practice that constitutes or will constitute 

39 a violation of any provision of this subtitle (including a regulation 

40 under this subtitle) or of any order issued under this subtitle, the Ad41 ministrator may bring a civil action in a district court of the United 


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1 States or a United States court of any place subject to the jurisdiction 

2 of the United States for an order enjoining the act or practice, or for 

3 an order enforcing compliance with the provision, regulation, or order, 

4 and the court shall have jurisdiction over the civil action and, on a 

5 showing by the Administrator that the licensee or other person has en6 gaged or is about to engage in any such act or practice, a permanent 

7 or temporary injunction, restraining order, or other order shall be 

8 granted without bond. 

9 (2) JURISDICTION OVER LICENSEE AND ASSETS OF THE LI10 CENSEE.—In a civil action under subsection (a), the court may, to such 

11 extent as the court considers necessary, take exclusive jurisdiction of 

12 the licensee and the assets of the licensee, wherever located, and the 

13 court shall have jurisdiction to appoint a trustee or receiver to hold or 

14 administer the assets of the licensee under the direction of the court. 

15 (3) TRUSTEESHIP OR RECEIVERSHIP OVER LICENSEE.—On request 

16 of the Administrator, the court may appoint the Administrator to act 

17 as trustee or receiver of the licensee unless the court considers that 

18 such an appointment would be inequitable or otherwise inappropriate 

19 by reason of special circumstances involved in the civil action. 

20 § 30322. Jurisdiction; service of process 

21 A civil action or other proceeding brought under section 30318(b)(4)(C), 

22 30319, 30320, or 30321 of this title by the Administrator to enforce any 

23 liability or duty created by, or to enjoin any violation of, this subtitle, or 

24 any regulation or order promulgated under this subtitle shall be brought in 

25 the district in which the licensee maintains its principal office, and process 

26 in such cases may be served in any district in which the defendant main27 tains its principal office or transacts business, or wherever the defendant 

28 may be found. 

29 CHAPTER 305—NEW MARKETS VENTURE CAPITAL 

30 COMPANY PROGRAM 

Sec. 

30501. Definitions. 

30502. Establishment of program. 

30503. Approval of new markets venture capital companies. 

30504. Guarantee of new markets venture capital company debentures. 

30505. Trust certificates. 

30506. Fees. 

30507. Operational assistance grants. 

30508. Bank participation. 

30509. Reporting requirement. 

30510. Regulations. 

30511. Unlawful acts and omissions. 

30512. Examinations. 

30513. Removal or suspension of directors or officers. 

30514. Direct civil enforcement actions. 

31 § 30501. Definitions 

32 In this chapter: 


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1 (1) DEVELOPMENTAL VENTURE CAPITAL.— 

2 (A) IN GENERAL.—The term ‘‘developmental venture capital’’ 

3 means capital in the form of an equity capital investment in a 

4 smaller enterprise made with a primary objective of fostering eco5 nomic development in a low-income geographic area. 

6 (B) EQUITY CAPITAL.—In subparagraph (A), the term ‘‘equity 

7 capital’’ has the meaning given the term in section 30304(g)(1)(B) 

8 of this title. 

9 (2) ELIGIBLE COMPANY.—The term ‘‘eligible company’’ means a 

10 company that— 

11 (A) is a newly formed for-profit entity or a newly formed for12 profit subsidiary of an existing entity; 

13 (B) has a management team with experience in community de14 velopment financing or relevant venture capital financing; and 

15 (C) has a primary objective of economic development of one or 

16 more low-income geographic areas. 

17 (3) LOW-INCOME INDIVIDUAL.—The term ‘‘low-income individual’’ 

18 means an individual whose income (adjusted for family size) does not 

19 exceed— 

20 (A) in the case of an individual residing in a metropolitan area, 

21 80 percent of the median income of all individuals residing in the 

22 metropolitan area; and 

23 (B) in the case of an individual residing in a nonmetropolitan 

24 area, the greater of— 

25 (i) 80 percent of the median income of all individuals resid26 ing in the nonmetropolitan area; or 

27 (ii) 80 percent of the median income of all individuals re28 siding in all of the nonmetropolitan areas in the State in 

29 which the individual resides. 

30 (4) NEW MARKETS VENTURE CAPITAL COMPANY.—The term ‘‘new 

31 markets venture capital company’’ means a company that— 

32 (A) has been granted final approval by the Administrator under 

33 section 30503(c) of this title; and 

34 (B) has entered into a participation agreement with the Admin35 istrator. 

36 (5) OPERATIONAL ASSISTANCE.—The term ‘‘operational assistance’’ 

37 means management, marketing, and other technical assistance that as38 sists a smaller enterprise with business development. 

39 (6) PARTICIPATION AGREEMENT.—The term ‘‘participation agree40 ment’’ means a participation agreement under section 30503(b)(4)(D) 

41 of this title. 


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1 (7) PROGRAM.—The term ‘‘program’’ means the new markets ven2 ture capital company program. 

3 (8) STATE.—The term ‘‘State’’ means a State, the District of Co4 lumbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the 

5 Northern Mariana Islands, and any other commonwealth, territory, or 

6 possession of the United States. 

7 § 30502. Establishment of program 

8 (a) IN GENERAL.—The Administrator shall establish a developmental 

9 venture capital program to be known as the new markets venture capital 

10 company program— 

11 (1) with the purpose of promoting economic development and cre12 ating wealth and job opportunities in low-income geographic areas and 

13 among individuals living in low-income geographic areas by encouraging 

14 developmental venture capital investments in smaller enterprises pri15 marily located in low-income geographic areas; and 

16 (2) with the mission of addressing the unmet equity investment 

17 needs of smaller enterprises located in low-income geographic areas. 

18 (b) ACTIVITIES.—Under the program, the Administrator may— 

19 (1) enter into participation agreements with new markets venture 

20 capital companies under section 30503(b)(4)(D) of this title for the 

21 purposes described in subsection (a); 

22 (2) guarantee debentures issued by new markets venture capital 

23 companies under section 30504 of this title; and 

24 (3) make grants to new markets venture capital companies and spe25 cialized small business investment companies under section 30507 of 

26 this title. 

27 § 30503. Approval of new markets venture capital companies 

28 (a) APPLICATION.—To participate in the program as a new markets ven29 ture capital company, an eligible company shall submit to the Administrator 

30 an application that includes— 

31 (1) a business plan describing how the applicant intends to make 

32 successful developmental venture capital investments in identified low33 income geographic areas; 

34 (2) information regarding the community development finance or rel35 evant venture capital qualifications and general reputation of the appli36 cant’s management; 

37 (3) a description of how the applicant intends to work with commu38 nity organizations and to seek to address the unmet capital needs of 

39 the communities served; 

40 (4) a proposal describing how the applicant intends to use the grant 

41 funds provided under this chapter to provide operational assistance to 


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1 smaller enterprises financed by the applicant, including information re2 garding whether the applicant intends to use licensed professionals, 

3 when necessary, on the applicant’s staff or from an outside entity; 

4 (5) with respect to binding commitments to be made to the applicant 

5 under this chapter, an estimate of the ratio of cash to in-kind contribu6 tions; 

7 (6) a description of the criteria to be used to evaluate whether and 

8 to what extent the applicant meets the objectives of the program; 

9 (7) information regarding the management and financial strength of 

10 any parent firm, affiliated firm, or any other firm essential to the suc11 cess of the applicant’s business plan; and 

12 (8) such other information as the Administrator may require. 

13 (b) CONDITIONAL APPROVAL.— 

14 (1) IN GENERAL.—From among eligible companies submitting appli15 cations under subsection (a), the Administrator shall conditionally ap16 prove applicants to participate in the program. 

17 (2) SELECTION CRITERIA.—In conditionally approving eligible com18 panies under paragraph (1), the Administrator shall consider— 

19 (A) the likelihood that an applicant will meet the goal of its 

20 business plan; 

21 (B) the experience and background of an applicant’s manage22 ment team; 

23 (C) the need for developmental venture capital investments in 

24 the geographic areas in which an applicant intends to invest; 

25 (D) the extent to which an applicant will concentrate its activi26 ties on serving the geographic areas in which the applicant intends 

27 to invest; 

28 (E) the likelihood that an applicant will be able to satisfy the 

29 conditions under paragraph (4); 

30 (F) the extent to which the activities proposed by an applicant 

31 will expand economic opportunities in the geographic areas in 

32 which the applicant intends to invest; 

33 (G) the strength of the applicant’s proposal to provide oper34 ational assistance as the proposal relates to the ability of the ap35 plicant to meet applicable cash requirements and properly use in36 kind contributions, including the use of resources for the services 

37 of licensed professionals, when necessary, whether provided by em38 ployees or by contractors; and 

39 (H) any other factor that the Administrator considers appro40 priate. 


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1 (3) NATIONWIDE DISTRIBUTION.—The Administrator shall select ap2 plicants under paragraph (1) in a manner that promotes investment 

3 nationwide. 

4 (4) REQUIREMENTS FOR FINAL APPROVAL.— 

5 (A) SPECIFICATION OF DATE.—On granting conditional ap6 proval of an applicant, the Administrator shall specify a date, not 

7 to exceed the date that is 2 years after the date of conditional ap8 proval, by which the conditionally approved applicant shall satisfy 

9 the requirements stated in this paragraph. 

10 (B) CAPITAL REQUIREMENT.—A conditionally approved appli11 cant shall raise not less than $5,000,000 of private capital or 

12 binding capital commitments from one or more investors (other 

13 than Federal agencies) that meet criteria established by the Ad14 ministrator. 

15 (C) NONADMINISTRATION RESOURCES FOR OPERATIONAL AS16 SISTANCE.— 

17 (i) IN GENERAL.—To provide operational assistance to 

18 smaller enterprises expected to be financed by a conditionally 

19 approved applicant, the conditionally approved applicant— 

20 (I) shall have binding commitments (for contribution 

21 in cash or in kind)— 

22 (aa) from any sources other than the Adminis23 trator that meet criteria established by the Adminis24 trator; 

25 (bb) payable or available over a multiyear period 

26 that the Administrator considers appropriate (not to 

27 exceed 10 years); and 

28 (cc) in an amount that is not less than 30 percent 

29 of the total amount of capital and commitments 

30 raised under subparagraph (B); 

31 (II) shall have purchased from an insurance company 

32 acceptable to the Administrator, using funds (other than 

33 the funds raised under subparagraph (B)) from any 

34 source other than the Administrator, an annuity that 

35 yields cash payments over a multiyear period acceptable 

36 to the Administrator (not to exceed 10 years) in an 

37 amount that is not less than 30 percent of the total 

38 amount of capital and commitments raised under sub39 paragraph (B); or 

40 (III) shall have binding commitments (for contribu41 tions in cash or in kind) of the type described in subVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00355 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 clause (I) and shall have purchased an annuity of the 

2 type described in subclause (II), which in the aggregate 

3 make available, over a multiyear period acceptable to the 

4 Administrator (not to exceed 10 years), an amount that 

5 is not less than 30 percent of the total amount of capital 

6 and commitments raised under subparagraph (B). 

7 (ii) EXCEPTION.—On a showing of special circumstances 

8 and good cause, the Administrator may consider an applicant 

9 to satisfy the requirements of clause (i) if the applicant has— 

10 (I) a viable plan that reasonably projects the capacity 

11 of the applicant to raise the amount (in cash or in-kind) 

12 required under clause (i); and 

13 (II) binding commitments in an amount that is equal 

14 to not less than 20 percent of the amount required under 

15 clause (i). 

16 (iii) LIMITATION.—To comply with the requirements of 

17 clauses (i) and (ii), the amount of in-kind contributions made 

18 by a conditionally approved applicant shall not exceed 50 per19 cent of the total contributions made by the conditionally ap20 proved applicant. 

21 (D) PARTICIPATION AGREEMENT.—A conditionally approved ap22 plicant shall enter into a participation agreement with the Admin23 istrator that— 

24 (i) details the conditionally approved applicant’s operating 

25 plan and investment criteria; and 

26 (ii) requires the conditionally approved applicant, after 

27 final approval under subsection (c), to make investments in 

28 smaller enterprises at least 80 percent of which are located 

29 in low-income geographic areas. 

30 (c) FINAL APPROVAL.—The Administrator shall— 

31 (1) grant final approval to a conditionally approved applicant to op32 erate as a new markets venture capital company if the conditionally ap33 proved applicant satisfies the requirements of paragraph (4) of sub34 section (b) on or before the expiration of the date specified under sub35 paragraph (A) of that paragraph; or 

36 (2) if the conditionally approved applicant fails to satisfy those re37 quirements on or before the expiration of that date, revoke the condi38 tional approval granted under subsection (b). 


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1 § 30504. Guarantee of new markets venture capital company 

2 debentures 

3 (a) IN GENERAL.—To enable a new markets venture capital company to 

4 make developmental venture capital investments in smaller enterprises in a 

5 low-income geographic area, the Administrator may guarantee the timely 

6 payment of principal and interest, as scheduled, on debentures issued by the 

7 new markets venture capital company. 

8 (b) TERMS AND CONDITIONS.—The Administrator may make a guarantee 

9 under this section on such terms and conditions as the Administrator con10 siders appropriate, except that the term of any debenture guaranteed under 

11 this section shall not exceed 15 years. 

12 (c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 

13 and credit of the United States is pledged to pay all amounts that may be 

14 required to be paid under any guarantee under this chapter. 

15 (d) MAXIMUM AMOUNT OF GUARANTEE.— 

16 (1) IN GENERAL.—The Administrator may guarantee the debentures 

17 issued by a new markets venture capital company only to the extent 

18 that the total face amount of outstanding guaranteed debentures of the 

19 new markets venture capital company does not exceed 150 percent of 

20 the private capital of the new markets venture capital company, as de21 termined by the Administrator. 

22 (2) TREATMENT OF CERTAIN FEDERAL FUNDS.—For purposes of 

23 paragraph (1), private capital may include capital that is considered to 

24 be Federal funds (within the meaning of section 30101(15)(C)(iii) of 

25 this title) if the capital is contributed by an investor other than a Fed26 eral agency. 

27 § 30505. Trust certificates 

28 (a) ISSUANCE.— 

29 (1) IN GENERAL.—The Administrator, acting directly or through an 

30 agent, may issue trust certificates representing ownership of all or a 

31 fractional part of debentures issued by a new markets venture capital 

32 company and guaranteed by the Administrator under section 30504 of 

33 this title. 

34 (2) TRUST OR POOL.—Trust certificates issued under paragraph (1) 

35 shall be based on and backed by a trust or pool approved by the Ad36 ministrator and composed solely of guaranteed debentures. 

37 (b) GUARANTEE.— 

38 (1) IN GENERAL.—The Administrator may, under such terms and 

39 conditions as the Administrator considers appropriate, guarantee the 

40 timely payment of the principal of and interest on trust certificates 


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1 issued by the Administrator or an agent of the Administrator under 

2 this section. 

3 (2) LIMITATION.—A guarantee under this subsection shall be limited 

4 to the extent of principal and interest on the guaranteed debentures 

5 that compose the trust or pool. 

6 (3) PREPAYMENT OR DEFAULT.— 

7 (A) IN GENERAL.—In the event that a debenture in a trust or 

8 pool is prepaid, or in the event of default of such a debenture, the 

9 guarantee of timely payment of principal and interest on the trust 

10 certificates shall be reduced in proportion to the amount of prin11 cipal and interest that the prepaid debenture represents in the 

12 trust or pool. 

13 (B) INTEREST PERIOD.—Interest on a prepaid or defaulted de14 benture shall accrue and be guaranteed by the Administrator only 

15 through the date of payment of the guarantee. 

16 (C) CALL.—At any time during the term of a trust certificate, 

17 a trust certificate may be called for redemption due to prepayment 

18 or default of all debentures that compose the trust or pool. 

19 (c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 

20 and credit of the United States is pledged to pay all amounts that may be 

21 required to be paid under any guarantee of a trust certificate issued by the 

22 Administrator or an agent of the Administrator under this section. 

23 (d) FEES.—The Administrator shall not collect a fee for any guarantee 

24 of a trust certificate under this section, but an agent of the Administrator 

25 may collect a fee approved by the Administrator for the functions described 

26 in subsection (f)(2). 

27 (e) SUBROGATION AND OWNERSHIP RIGHTS.— 

28 (1) SUBROGATION.—If the Administrator pays a claim under a guar29 antee issued under this section, the Administrator shall be subrogated 

30 fully to the rights satisfied by the payment. 

31 (2) OWNERSHIP RIGHTS.—No Federal, State, or local law shall pre32 clude or limit the exercise by the Administrator of the ownership rights 

33 of the Administrator in the debentures residing in a trust or pool 

34 against which trust certificates are issued under this section. 

35 (f) MANAGEMENT AND ADMINISTRATION.— 

36 (1) REGISTRATION.—The Administrator may provide for a central 

37 registration of all trust certificates issued under this section. 

38 (2) CONTRACTING OF FUNCTIONS.— 

39 (A) IN GENERAL.—The Administrator may contract with one or 

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1 ing and the central registration functions provided for in this sec2 tion including, notwithstanding any other provision of law— 

3 (i) maintenance, on behalf of and under the direction of the 

4 Administrator, of such commercial bank accounts or invest5 ments in obligations of the United States as may be necessary 

6 to facilitate the creation of trusts or pools backed by deben7 tures guaranteed under section 30504 of this title; and 

8 (ii) the issuance of trust certificates to facilitate the cre9 ation of such trusts or pools. 

10 (B) FIDELITY BOND OR INSURANCE REQUIREMENT.—An agent 

11 performing functions on behalf of the Administrator under this 

12 paragraph shall provide a fidelity bond or insurance in such 

13 amounts as the Administrator determines to be necessary to fully 

14 protect the interests of the United States. 

15 (3) REGULATION OF BROKERS AND DEALERS.—The Administrator 

16 may regulate brokers and dealers in trust certificates issued under this 

17 section. 

18 (4) FORM OF REGISTRATION.—This subsection does not preclude the 

19 use of a book-entry or other electronic form of registration for trust 

20 certificates issued under this section. 

21 § 30506. Fees 

22 Except as provided in section 30505(d) of this title, the Administrator 

23 may charge such fees as the Administrator considers appropriate with re24 spect to any guarantee or grant issued under this chapter. 

25 § 30507. Operational assistance grants 

26 (a) IN GENERAL.— 

27 (1) AUTHORITY.—The Administrator may make a grant to a new 

28 markets venture capital company or specialized small business invest29 ment company to enable the new markets venture capital company or 

30 specialized small business investment company to provide operational 

31 assistance to smaller enterprises financed, or expected to be financed, 

32 by the new markets venture capital company or specialized small busi33 ness investment company. 

34 (2) TERMS.—A grant under this subsection shall be made over a 

35 multiyear period not to exceed 10 years, under such other terms as the 

36 Administrator may require. 

37 (3) SPECIALIZED SMALL BUSINESS INVESTMENT COMPANIES.— 

38 (A) SUBMISSION OF PLAN.—A specialized small business invest39 ment company shall be eligible for a grant under this section only 

40 if the specialized small business investment company submits to 


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1 the Administrator, in such form and manner as the Administrator 

2 may require, a plan for use of the grant. 

3 (B) USE OF FUNDS.—The proceeds of a grant made to a spe4 cialized small business investment company under this subsection 

5 shall be used by the specialized small business investment com6 pany only to provide operational assistance in connection with an 

7 equity investment made with capital raised after December 21, 

8 2000, in a smaller enterprise located in a low-income geographic 

9 area. 

10 (4) GRANT AMOUNT.— 

11 (A) NEW MARKETS VENTURE CAPITAL COMPANIES.—The 

12 amount of a grant made under this subsection to a new markets 

13 venture capital company shall be equal to the amount of resources 

14 (in cash or in kind) raised by the new markets venture capital 

15 company under section 30503(b)(4)(B) of this title. 

16 (B) SPECIALIZED SMALL BUSINESS INVESTMENT COMPANIES.— 

17 The amount of a grant made under this subsection to a specialized 

18 small business investment company shall be equal to the resources 

19 (in cash or in kind) raised by the entity in accordance with the 

20 requirements applicable to new markets venture capital companies 

21 under section 305053(b)(4)(C) of this title. 

22 (5) PRO RATA REDUCTIONS.—If the amount made available to carry 

23 out this section is insufficient for the Administrator to provide grants 

24 in the amounts provided for in paragraph (4), the Administrator shall 

25 make pro rata reductions in the amounts otherwise payable to each new 

26 markets venture capital company and specialized small business invest27 ment company under that paragraph. 

28 (b) SUPPLEMENTAL GRANTS.— 

29 (1) IN GENERAL.—The Administrator may make a supplemental 

30 grant to a new markets venture capital company or specialized small 

31 business investment company under such terms as the Administrator 

32 may require, to provide additional operational assistance to smaller en33 terprises financed, or expected to be financed, by the new markets ven34 ture capital company or specialized small business investment company. 

35 (2) MATCHING REQUIREMENT.—The Administrator may require, as 

36 a condition of a supplemental grant under this subsection, that the new 

37 markets venture capital company or specialized small business invest38 ment company receiving the grant provide from resources (in cash or 

39 in kind), other than those provided by the Administrator, a matching 

40 contribution equal to the amount of the supplemental grant. 


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1 (c) LIMITATION.—None of the assistance made available under this sec2 tion may be used for any overhead or general and administrative expense 

3 of a new markets venture capital company or a specialized small business 

4 investment company. 

5 § 30508. Bank participation 

6 (a) IN GENERAL.—Except as provided in subsection (b), a national bank, 

7 a member bank of the Federal Reserve System, and (to the extent permitted 

8 under applicable State law) an insured bank that is not a member of the 

9 Federal Reserve System may invest in a new markets venture capital com10 pany or in an entity established to invest solely in new markets venture cap11 ital companies. 

12 (b) LIMITATION.—A bank described in subsection (a) shall not make in13 vestments described in that subsection in a total amount that is greater 

14 than 5 percent of the capital and surplus of the bank. 

15 § 30509. Reporting requirement 

16 A new markets venture capital company that participates in the program 

17 shall provide the Administrator such information as the Administrator may 

18 require, including— 

19 (1) information relating to the measurement criteria that the new 

20 markets venture capital company proposed in its program application; 

21 and 

22 (2) in each case in which the new markets venture capital company 

23 makes, under this chapter, an investment in, or a loan or grant to, a 

24 business that is not located in a low-income geographic area, a report 

25 on the number and percentage of employees of the business who reside 

26 in a low-income geographic area. 

27 § 30510. Regulations 

28 The Administrator may issue such regulations as the Administrator con29 siders necessary to carry out this chapter. 

30 § 30511. Unlawful acts and omissions 

31 (a) PERSONS DEEMED TO COMMIT VIOLATION.—If a new markets ven32 ture capital company violates any provision of this subtitle (including a reg33 ulation issued under this subtitle) or of a participation agreement by reason 

34 of the new markets venture capital company’s failure to comply with terms 

35 of this subtitle (including a regulation) or of the participation agreement, 

36 or by reason of the new markets venture capital company’s engaging in any 

37 act or practice that constitutes or will constitute a violation of this subtitle 

38 (including a regulation) or of the participation agreement, the violation shall 

39 also be deemed to be a violation and an unlawful act committed by any per40 son that, directly or indirectly, authorizes, orders, participates in, causes, 

41 brings about, counsels, aids, or abets in the commission of the act, practice, 


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1 or transaction that constitutes or will constitute, in whole or in part, the 

2 violation. 

3 (b) BREACH OF FIDUCIARY DUTY.—It shall be unlawful for an officer, 

4 director, employee, agent, or other participant in the management or con5 duct of the affairs of a new markets venture capital company to engage in 

6 any act or practice, or to omit any act or practice, in breach of the person’s 

7 fiduciary duty as officer, director, employee, agent, or participant if, as a 

8 result of the act, practice, or omission, the new markets venture capital 

9 company suffers or is in imminent danger of suffering financial loss or other 

10 damage. 

11 (c) OTHER UNLAWFUL ACTS.—Except with the written consent of the 

12 Administrator, it shall be unlawful— 

13 (1) for any person to take office as an officer, director, or employee 

14 of a new markets venture capital company, or to become an agent or 

15 participant in the conduct of the affairs or management of a new mar16 kets venture capital company, if the person— 

17 (A) has been convicted of— 

18 (i) a felony; or 

19 (ii) any other criminal offense involving dishonesty or 

20 breach of trust; or 

21 (B) has been found civilly liable in damages, or has been perma22 nently or temporarily enjoined by an order, judgment, or decree 

23 of a court of competent jurisdiction, by reason of any act or prac24 tice involving fraud or breach of trust; or 

25 (2) for any person to continue to serve in any of the capacities de26 scribed in paragraph (1), if— 

27 (A) the person is convicted of— 

28 (i) a felony; or 

29 (ii) any other criminal offense involving dishonesty or 

30 breach of trust; or 

31 (B) the person is found civilly liable in damages, or is perma32 nently or temporarily enjoined by an order, judgment, or decree 

33 of a court of competent jurisdiction, by reason of any act or prac34 tice involving fraud or breach of trust. 

35 § 30512. Examinations 

36 (a) IN GENERAL.—A new markets venture capital company that partici37 pates in the program shall be subject to examinations made at the direction 

38 of the Investment Division of the Administration in accordance with this 

39 section and modeled after oversight developed for the small business invest40 ment company program. 


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1 (b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—An examination under 

2 this section may be conducted with the assistance of a private sector entity 

3 that has both the qualifications and the expertise necessary to conduct such 

4 an examination. 

5 (c) COSTS.— 

6 (1) IN GENERAL.—The Administrator may assess the cost of an ex7 amination under this section (including compensation of an examiner) 

8 against the new markets venture capital company examined. 

9 (2) PAYMENT.—A new markets venture capital company against 

10 which the Administrator assesses costs under this paragraph shall pay 

11 the costs. 

12 (d) DEPOSIT OF AMOUNTS.—Amounts collected under this section shall 

13 be deposited in the account for salaries and expenses of the Administration. 

14 § 30513. Removal or suspension of directors or officers 

15 Using the procedures for removing or suspending a director or an officer 

16 of a licensee under section 30320 of this title (to the extent that those pro17 cedures are not inconsistent with the requirements of this chapter), the Ad18 ministrator may remove or suspend a director or officer of a new markets 

19 venture capital company. 

20 § 30514. Direct civil enforcement actions 

21 (a) FORFEITURE OF RIGHTS AND PRIVILEGES.— 

22 (1) IN GENERAL.—With respect to a new markets venture capital 

23 company that violates or fails to comply with any of the provisions of 

24 this subtitle (including a regulation issued under this subtitle) or of 

25 any participation agreement, the Administrator may— 

26 (A) void the participation agreement between the Administrator 

27 and the new markets venture capital company; and 

28 (B) cause the new markets venture capital company to forfeit 

29 all of the rights and privileges derived by the new markets venture 

30 capital company from this subtitle. 

31 (2) ADJUDICATION OF NONCOMPLIANCE.— 

32 (A) IN GENERAL.—Before the Administrator may cause a new 

33 markets venture capital company to forfeit rights or privileges 

34 under paragraph (1), a court of the United States of competent 

35 jurisdiction shall find that the new markets venture capital com36 pany committed a violation, or failed to comply, in a civil action 

37 brought for that purpose in the district, territory, or other place 

38 subject to the jurisdiction of the United States in which the prin39 cipal office of the new markets venture capital company is located. 


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1 (B) PARTIES AUTHORIZED TO BRING CIVIL ACTION.—A civil ac2 tion brought by the United States under this subsection shall be 

3 brought by the Administrator or by the Attorney General. 

4 (b) INJUNCTIONS AND OTHER ORDERS.— 

5 (1) IN GENERAL.—If a new markets venture capital company or any 

6 other person engages or is about to engage in an act or practice that 

7 constitutes or will constitute a violation of any provision of this subtitle 

8 (including a regulation under this subtitle) or of any order issued under 

9 this subtitle, the Administrator may bring a civil action in a district 

10 court of the United States or a United States court of any place sub11 ject to the jurisdiction of the United States for an order enjoining the 

12 act or practice, or for an order enforcing compliance with the provision, 

13 regulation, or order, and the court shall have jurisdiction over the civil 

14 action and, on a showing by the Administrator that the new markets 

15 venture capital company or other person has engaged or is about to 

16 engage in any such act or practice, a permanent or temporary injunc17 tion, restraining order, or other order shall be granted without bond. 

18 (2) JURISDICTION OVER NEW MARKETS VENTURE CAPITAL COMPANY

19 AND ITS ASSETS.—In a civil action under paragraph (1), the court 

20 may, to such extent as the court considers necessary, take exclusive ju21 risdiction of the new markets venture capital company and the assets 

22 of the new markets venture capital company, wherever located, and the 

23 court shall have jurisdiction to appoint a trustee or receiver to hold or 

24 administer the assets of the new markets venture capital company 

25 under the direction of the court. 

26 (3) TRUSTEESHIP OR RECEIVERSHIP OVER NEW MARKETS VENTURE

27 CAPITAL COMPANY.—On request of the Administrator, the court may 

28 appoint the Administrator to act as trustee or receiver of the new mar29 kets venture capital company unless the court considers that such an 

30 appointment would be inequitable or otherwise inappropriate by reason 

31 of special circumstances involved in the civil action. 

32 CHAPTER 307—RENEWABLE FUEL CAPITAL 

33 INVESTMENT PILOT PROGRAM 

Sec. 

30701. Definitions. 

30702. Establishment of program. 

30703. Approval of renewable fuel capital investment companies. 

30704. Guarantee of renewable fuel capital investment company debentures. 

30705. Trust certificates. 

30706. Fees. 

30707. Operational assistance grants. 

30708. Bank participation. 

30709. Reporting requirement. 

30710. Regulations. 

30711. Examinations. 


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30712. Conflicts of interest; unlawful acts and omissions by officers, directors, employees, and 

agents; revocation and suspensions of licenses; cease and desist orders; injunctions 

and other orders. 

30713. Removal or suspension of directors or officers. 

30714. Termination. 

1 § 30701. Definitions 

2 In this chapter: 

3 (1) ELIGIBLE COMPANY.—The term ‘‘eligible company’’ means a 

4 company that— 

5 (A) is a newly formed for-profit entity or a newly formed for6 profit subsidiary of an existing entity; 

7 (B) has a management team with experience in alternative en8 ergy financing or relevant venture capital financing; and 

9 (C) has a primary objective of investment in smaller enterprises 

10 that research, manufacture, develop, produce, or bring to market 

11 goods, products, or services that generate or support the produc12 tion of renewable energy. 

13 (2) OPERATIONAL ASSISTANCE.—The term ‘‘operational assistance’’ 

14 means management, marketing, and other technical assistance that as15 sists a smaller enterprise with business development. 

16 (3) PARTICIPATION AGREEMENT.—The term ‘‘participation agree17 ment’’ means a participation agreement under section 30703(b)(4)(D) 

18 of this title. 

19 (4) PROGRAM.—The term ‘‘program’’ means the renewable fuel cap20 ital investment pilot program. 

21 (5) RENEWABLE ENERGY.—The term ‘renewable energy’ means en22 ergy derived from resources that are regenerative or that cannot be de23 pleted, including solar, wind, ethanol, and biodiesel fuels. 

24 (6) RENEWABLE FUEL CAPITAL INVESTMENT COMPANY.—The term 

25 ‘‘renewable fuel capital investment company’’ means a company— 

26 (A) that— 

27 (i) has been granted final approval by the Administrator 

28 under section 30703(e) of this title; and 

29 (ii) has entered into a participation agreement with the Ad30 ministrator; or 

31 (B) that has received conditional approval under section 

32 30703(b) of this title. 

33 (7) STATE.—The term ‘‘State’’ means a State, the District of Co34 lumbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the 

35 Northern Mariana Islands, and any other commonwealth, territory, or 

36 possession of the United States. 


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1 (8) VENTURE CAPITAL.—The term ‘‘venture capital’’ means capital 

2 in the form of equity capital (as defined in section 30304(g)(1)(B) of 

3 this title) investments. 

4 § 30702. Establishment of program 

5 (a) IN GENERAL.—The Administrator shall establish a renewable fuel 

6 capital investment program— 

7 (1) with the purpose of promoting the research, development, manu8 facture, production, and bringing to market of goods, products, or serv9 ices that generate or support the production of renewable energy by en10 couraging venture capital investments in smaller enterprises primarily 

11 engaged such activities; and 

12 (2) with the mission of addressing the unmet equity investment 

13 needs of smaller enterprises engaged in researching, developing, manu14 facturing, producing, and bringing to market goods, products, or serv15 ices that generate or support the production of renewable energy. 

16 (b) ACTIVITIES.—Under the program, the Administrator may— 

17 (1) enter into participation agreements with renewable fuel capital 

18 investment companies under section 30703(b)(4)(D) of this title for the 

19 purposes described in subsection (a); 

20 (2) guarantee debentures issued by renewable fuel capital investment 

21 companies under section 30704 of this title; and 

22 (3) make grants to renewable fuel investment capital companies 

23 under section 30707 of this title. 

24 § 30703. Approval of renewable fuel capital investment com25 panies 

26 (a) APPLICATION.—An eligible company desiring to be designated as a re27 newable fuel capital investment company shall submit to the Administrator 

28 an application that includes— 

29 (1) a business plan describing how the applicant intends to make 

30 successful venture capital investments in smaller enterprises primarily 

31 engaged in the research, manufacture, development, production, or 

32 bringing to market of goods, products, or services that generate or sup33 port the production of renewable energy; 

34 (2) information regarding the relevant venture capital qualifications 

35 and general reputation of the applicant’s management; 

36 (3) a description of how the applicant intends to seek to address the 

37 unmet capital needs of the smaller enterprises served; 

38 (4) a proposal describing how the applicant intends to use the grant 

39 funds provided under this chapter to provide operational assistance to 

40 smaller enterprises financed by the applicant, including information re41 garding whether the applicant has employees with appropriate profesVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00366 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 sional licenses or will contract with another entity when the services of 

2 such an individual are necessary; 

3 (5) with respect to binding commitments to be made to the applicant 

4 under this chapter, an estimate of the ratio of cash to in-kind contribu5 tions; 

6 (6) a description of whether and to what extent the applicant meets 

7 the criteria under subsection (b)(2) and the objectives of the program; 

8 (7) information regarding the management and financial strength of 

9 any parent firm, affiliated firm, or any other firm essential to the suc10 cess of the applicant’s business plan; and 

11 (8) such other information as the Administrator may require. 

12 (b) CONDITIONAL APPROVAL.— 

13 (1) IN GENERAL.—From among eligible companies submitting appli14 cations under subsection (a), the Administrator shall conditionally ap15 prove applicants to operate as renewable fuel capital investment compa16 nies. 

17 (2) SELECTION CRITERIA.—In conditionally approving companies 

18 under paragraph (1), the Administrator shall consider— 

19 (A) the likelihood that an applicant will meet the goal of its 

20 business plan; 

21 (B) the experience and background of an applicant’s manage22 ment team; 

23 (C) the need for venture capital investments in the geographic 

24 areas in which an applicant intends to invest; 

25 (D) the extent to which an applicant will concentrate its activi26 ties on serving the geographic areas in which the applicant intends 

27 to invest; 

28 (E) the likelihood that an applicant will be able to satisfy the 

29 conditions under paragraph (4); 

30 (F) the extent to which the activities proposed by the applicant 

31 will expand economic opportunities in the geographic areas in 

32 which the company intends to invest; 

33 (G) the strength of the applicant’s proposal to provide oper34 ational assistance as the proposal relates to the ability of the ap35 plicant to meet applicable cash requirements and properly use in36 kind contributions, including the use of resources for the services 

37 of licensed professionals, when necessary, whether provided by em38 ployees or by contractors; and 

39 (H) any other factor that the Administrator considers appro40 priate. 


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1 (3) NATIONWIDE DISTRIBUTION.—From among eligible companies 

2 submitting applications under subsection (a), the Administrator shall 

3 consider the selection criteria under paragraph (2) and shall, to the 

4 maximum extent practicable, approve at least one applicant from each 

5 geographic region of the Administration. 

6 (4) REQUIREMENTS FOR FINAL APPROVAL.— 

7 (A) IN GENERAL.—On granting conditional approval of an ap8 plicant, the Administrator shall grant each conditionally approved 

9 applicant 2 years to satisfy the requirements stated in this para10 graph. 

11 (B) CAPITAL REQUIREMENT.—A conditionally approved appli12 cant shall raise not less than $3,000,000 of private capital or 

13 binding capital commitments from one or more investors (other 

14 than Federal agencies) that meet criteria established by the Ad15 ministrator. 

16 (C) NONADMINISTRATION RESOURCES FOR OPERATIONAL AS17 SISTANCE.— 

18 (i) IN GENERAL.—To provide operational assistance to 

19 smaller enterprises expected to be financed by the applicant, 

20 a conditionally approved applicant shall have binding commit21 ments (for contribution in cash or in-kind)— 

22 (I) from any source other than the Administrator that 

23 meet criteria established by the Administrator; and 

24 (II) payable or available over a multiyear period that 

25 the Administrator considers appropriate (not to exceed 

26 10 years). 

27 (ii) EXCEPTION.—On a showing of special circumstances 

28 and good cause, the Administrator may consider an applicant 

29 to satisfy the requirements of clause (i) if the applicant has— 

30 (I) a viable plan that reasonably projects the capacity 

31 of the applicant to raise the amount (in cash or in-kind) 

32 required under clause (i); and 

33 (II) binding commitments in an amount that is equal 

34 to not less than 20 percent of the amount required under 

35 clause (i). 

36 (iii) LIMITATION.—To comply with the requirements of 

37 clauses (i) and (ii), the amount of in-kind contributions made 

38 by a conditionally approved applicant shall not exceed 50 per39 cent of the total contributions made by the conditionally ap40 proved applicant. 


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1 (D) PARTICIPATION AGREEMENT.—A conditionally approved ap2 plicant shall enter into a participation agreement with the Admin3 istrator that— 

4 (i) details the conditionally approved applicant’s operating 

5 plan and investment criteria; and 

6 (ii) requires the conditionally approved applicant, after 

7 final approval under subsection (c), to make investments in 

8 smaller enterprises primarily engaged in researching, manu9 facturing, developing, producing, or bringing to market goods, 

10 products, or services that generate or support the production 

11 of renewable energy. 

12 (c) FINAL APPROVAL.—The Administrator shall, with respect to each ap13 plicant conditionally approved under subsection (c)— 

14 (1) grant final approval to the conditionally approved applicant to 

15 operate as a renewable fuel capital investment company if the condi16 tionally approved applicant satisfies the requirements of paragraph (4) 

17 of subsection (b) on or before the expiration of the time period de18 scribed in that subsection; or 

19 (2) if the conditionally approved applicant fails to satisfy those re20 quirements on or before the expiration of that time period, revoke the 

21 conditional approval granted under subsection (b). 

22 § 30704. Guarantee of renewable fuel capital investment 

23 company debentures 

24 (a) IN GENERAL.—To enable a renewable fuel capital investment com25 pany to make venture capital investments in smaller enterprises engaged in 

26 the research, development, manufacture, production, and bringing to market 

27 of goods, products, or services that generate or support the production of 

28 renewable energy, the Administrator may guarantee the timely payment of 

29 principal and interest, as scheduled, on debentures issued by the renewable 

30 fuel capital investment company. 

31 (b) TERMS AND CONDITIONS.—The Administrator may make a guarantee 

32 under this section on such terms and conditions as the Administrator con33 siders appropriate, except that— 

34 (1) the term of any debenture guaranteed under this section shall 

35 not exceed 15 years; and 

36 (2) a debenture guaranteed under this section— 

37 (A) shall carry no front-end or annual fees; 

38 (B) shall be issued at a discount; 

39 (C) shall require no interest payments during the 5-year period 

40 beginning on the date on which the debenture is issued; 


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1 (D) shall be prepayable without penalty after the end of the 

2 one-year period beginning on the date on which the debenture is 

3 issued; and 

4 (E) shall require semiannual interest payments after the period 

5 described in subparagraph (C). 

6 (c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 

7 and credit of the United States is pledged to pay all amounts that may be 

8 required to be paid under any guarantee under this chapter. 

9 (d) MAXIMUM AMOUNT OF GUARANTEE.— 

10 (1) IN GENERAL.—The Administrator may guarantee the debentures 

11 issued by a renewable fuel capital investment company only to the ex12 tent that the total face amount of outstanding guaranteed debentures 

13 of the renewable fuel capital investment company does not exceed 150 

14 percent of the private capital of the renewable fuel capital investment 

15 company, as determined by the Administrator. 

16 (2) TREATMENT OF CERTAIN FEDERAL FUNDS.—For purposes of 

17 paragraph (1), private capital may include capital that is considered to 

18 be Federal funds (within the meaning of section 30101(15)(C)(iii) of 

19 this title) if the capital is contributed by an investor other than a Fed20 eral agency. 

21 § 30705. Trust certificates 

22 (a) ISSUANCE.— 

23 (1) IN GENERAL.—The Administrator, acting directly or through an 

24 agent, may issue trust certificates representing ownership of all or a 

25 fractional part of debentures issued by a renewable fuel capital invest26 ment company and guaranteed by the Administrator under section 

27 30704 of this title. 

28 (2) TRUST OR POOL.—Trust certificates issued under paragraph (1) 

29 shall be based on and backed by a trust or pool approved by the Ad30 ministrator and composed solely of guaranteed debentures. 

31 (b) GUARANTEE.— 

32 (1) IN GENERAL.—The Administrator may, under such terms and 

33 conditions as the Administrator considers appropriate, guarantee the 

34 timely payment of the principal of and interest on trust certificates 

35 issued by the Administrator or an agent of the Administrator under 

36 this section. 

37 (2) LIMITATION.—A guarantee under this subsection shall be limited 

38 to the extent of principal and interest on the guaranteed debentures 

39 that compose the trust or pool. 

40 (3) PREPAYMENT OR DEFAULT.— 


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1 (A) IN GENERAL.—In the event that a debenture in a trust or 

2 pool is prepaid, or in the event of default of such a debenture, the 

3 guarantee of timely payment of principal and interest on the trust 

4 certificates shall be reduced in proportion to the amount of prin5 cipal and interest that the prepaid debenture represents in the 

6 trust or pool. 

7 (B) INTEREST PERIOD.—Interest on a prepaid or defaulted de8 benture shall accrue and be guaranteed by the Administrator only 

9 through the date of payment of the guarantee. 

10 (C) CALL.—At any time during the term of a trust certificate, 

11 a trust certificate may be called for redemption due to prepayment 

12 or default of all debentures that compose the trust or pool. 

13 (c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 

14 and credit of the United States is pledged to pay all amounts that may be 

15 required to be paid under any guarantee of a trust certificate issued by the 

16 Administrator or an agent of the Administrator under this section. 

17 (d) FEES.—The Administrator shall not collect a fee for any guarantee 

18 of a trust certificate under this section, but an agent of the Administrator 

19 may collect a fee approved by the Administrator for the functions described 

20 in subsection (f)(2). 

21 (e) SUBROGATION AND OWNERSHIP RIGHTS.— 

22 (1) SUBROGATION.—If the Administrator pays a claim under a guar23 antee issued under this section, the Administrator shall be subrogated 

24 fully to the rights satisfied by the payment. 

25 (2) OWNERSHIP RIGHTS.—No Federal, State, or local law shall pre26 clude or limit the exercise by the Administrator of the ownership rights 

27 of the Administrator in the debentures residing in a trust or pool 

28 against which trust certificates are issued under this section. 

29 (f) MANAGEMENT AND ADMINISTRATION.— 

30 (1) REGISTRATION.—The Administrator may provide for a central 

31 registration of all trust certificates issued under this section. 

32 (2) CONTRACTING OF FUNCTIONS.— 

33 (A) IN GENERAL.—The Administrator may contract with one or 

34 more agents to carry out on behalf of the Administrator the pool35 ing and the central registration functions provided for in this sec36 tion including, notwithstanding any other provision of law— 

37 (i) maintenance, on behalf of and under the direction of the 

38 Administrator, of such commercial bank accounts or invest39 ments in obligations of the United States as may be necessary 

40 to facilitate the creation of trusts or pools backed by deben41 tures guaranteed under section 30704 of this title; and 


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1 (ii) the issuance of trust certificates to facilitate the cre2 ation of such trusts or pools. 

3 (B) FIDELITY BOND OR INSURANCE REQUIREMENT.—An agent 

4 performing functions on behalf of the Administrator under this 

5 paragraph shall provide a fidelity bond or insurance in such 

6 amounts as the Administrator determines to be necessary to fully 

7 protect the interests of the United States. 

8 (3) REGULATION OF BROKERS AND DEALERS.—The Administrator 

9 may regulate brokers and dealers in trust certificates issued under this 

10 section. 

11 (4) FORM OF REGISTRATION.—This subsection does not preclude the 

12 use of a book-entry or other electronic form of registration for trust 

13 certificates issued under this section. 

14 § 30706. Fees 

15 (a) IN GENERAL.—Except as provided in section 30705(d) of this title, 

16 the Administrator may charge such fees as the Administrator considers ap17 propriate with respect to any guarantee or grant issued under this chapter, 

18 in an amount established annually by the Administrator, as necessary to re19 duce to zero the cost (as defined in section 502 of the Federal Credit Re20 form Act of 1990 (2 U.S.C. 661a)) to the Administrator of purchasing and 

21 guaranteeing debentures under this chapter, which amounts shall be paid 

22 to and retained by the Administrator. 

23 (b) OFFSET.—The Administrator may, as provided by subsection (c), off24 set fees charged and collected under subsection (a). 

25 (c) FEE CONTRIBUTION.— 

26 (1) IN GENERAL.—To the extent that amounts are made available 

27 to the Administrator for the purpose of fee contributions, the Adminis28 trator shall contribute to fees paid by the renewable fuel capital invest29 ment companies under subsection (a). 

30 (2) ANNUAL ADJUSTMENT.—Each fee contribution under paragraph 

31 (1) shall be effective for one fiscal year and shall be adjusted as nec32 essary for each fiscal year thereafter to ensure that amounts under 

33 paragraph (1) are fully used. The fee contribution for a fiscal year 

34 shall be based on the outstanding commitments made and the guaran35 tees and grants that the Administrator projects will be made during 

36 the fiscal year, given the program level authorized by law for that fiscal 

37 year and any other factors that the Administrator considers appro38 priate. 

39 § 30707. Operational assistance grants 

40 (a) IN GENERAL.— 


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1 (1) AUTHORITY.—The Administrator may make a grant to a renew2 able fuel capital investment company to enable the renewable fuel cap3 ital investment company to provide operational assistance to smaller 

4 enterprises financed, or expected to be financed, by the renewable fuel 

5 capital investment company. 

6 (2) TERMS.—A grant under this subsection shall be made over a 

7 multiyear period not to exceed 10 years, under such other terms as the 

8 Administrator may require. 

9 (3) GRANT AMOUNT.—The amount of a grant made under this sub10 section to a renewable fuel capital investment company shall be equal 

11 to the lesser of— 

12 (A) 10 percent of the resources (in cash or in kind) raised by 

13 the renewable fuel capital investment company under section 

14 30703(b)(4)(B) of this title; or 

15 (B) $1,000,000. 

16 (4) PRO RATA REDUCTIONS.—If the amount made available to carry 

17 out this section is insufficient for the Administrator to provide grants 

18 in the amounts provided for in paragraph (3), the Administrator shall 

19 make pro rata reductions in the amounts otherwise payable to each re20 newable fuel capital investment company under that paragraph. 

21 (5) GRANTS TO CONDITIONALLY APPROVED COMPANIES.— 

22 (A) IN GENERAL.—Subject to subparagraphs (B) and (C), on 

23 the request of a renewable fuel capital investment company condi24 tionally approved under section 30703(b) of this title, the Admin25 istrator shall make a grant to the renewable fuel capital invest26 ment company under this subsection. 

27 (B) REPAYMENT BY RENEWABLE FUEL CAPITAL INVESTMENT

28 COMPANIES NOT FINALLY APPROVED.—If a renewable fuel capital 

29 investment company receives a grant under this paragraph and 

30 does not enter into a participation agreement for final approval, 

31 the renewable fuel capital investment company shall, subject to 

32 controlling Federal law, repay the amount of the grant to the Ad33 ministrator. 

34 (C) DEDUCTION OF GRANT TO APPROVED COMPANY.—If a re35 newable fuel capital investment company receives a grant under 

36 this paragraph and receives final approval under section 30703(c) 

37 of this title, the Administrator shall deduct the amount of the 

38 grant from the total grant amount that the renewable fuel capital 

39 investment company receives for operational assistance. 


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1 (D) AMOUNT OF GRANT.—No renewable fuel capital investment 

2 company may receive a grant of more than $100,000 under this 

3 paragraph. 

4 (b) SUPPLEMENTAL GRANTS.— 

5 (1) IN GENERAL.—The Administrator may make a supplemental 

6 grant to a renewable fuel capital investment company under such terms 

7 as the Administrator may require, to provide additional operational as8 sistance to smaller enterprises financed, or expected to be financed, by 

9 the renewable fuel capital investment company. 

10 (2) MATCHING REQUIREMENT.—The Administrator may require, as 

11 a condition of a supplemental grant under this subsection, that the re12 newable fuel capital investment company receiving the grant provide 

13 from resources (in cash or in kind), other than those provided by the 

14 Administrator, a matching contribution equal to the amount of the sup15 plemental grant. 

16 (c) LIMITATION.—None of the assistance made available under this sec17 tion may be used for any overhead or general and administrative expense 

18 of a renewable fuel capital investment company. 

19 § 30708. Bank participation 

20 (a) IN GENERAL.—Except as provided in subsection (b), a national bank, 

21 a member bank of the Federal Reserve System, and (to the extent permitted 

22 under applicable State law) an insured bank that is not a member of the 

23 Federal Reserve System may invest in any renewable fuel capital investment 

24 company or in any entity established to invest solely in renewable fuel cap25 ital investment companies. 

26 (b) LIMITATION.—A bank described in subsection (a) shall not make in27 vestments described in that subsection in a total amount that is greater 

28 than 5 percent of the capital and surplus of the bank. 

29 § 30709. Reporting requirement 

30 A renewable fuel capital investment company that participates in the pro31 gram shall provide the Administrator such information as the Administrator 

32 may require, including— 

33 (1) information relating to the measurement criteria that the renew34 able fuel capital investment company proposed in its program applica35 tion; and 

36 (2) in each case in which the renewable fuel capital investment com37 pany makes, under this chapter, an investment in, or a loan or a grant 

38 to, a business that is not primarily engaged in the research, develop39 ment, manufacture, or bringing to market or renewable energy sources, 

40 a report on the nature, origin, and revenues of the business in which 

41 investments are made. 


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1 § 30710. Regulations 

2 The Administrator may issue such regulations as the Administrator con3 siders necessary to carry out this chapter. 

4 § 30711. Examinations 

5 (a) IN GENERAL.—A renewable fuel capital investment company that par6 ticipates in the program shall be subject to examinations made at the direc7 tion of the Investment Division of the Administration in accordance with 

8 this section and modeled after oversight developed for the small business in9 vestment company program. 

10 (b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—An examination under 

11 this section may be conducted with the assistance of a private sector entity 

12 that has both the qualifications and the expertise necessary to conduct such 

13 an examination. 

14 (c) COSTS.— 

15 (1) IN GENERAL.—The Administrator may assess the cost of an ex16 amination under this section (including compensation of an examiner) 

17 against the renewable fuel capital investment company examined. 

18 (2) PAYMENT.—A renewable fuel capital investment company 

19 against which the Administrator assesses costs under this paragraph 

20 shall pay the costs. 

21 (d) DEPOSIT OF AMOUNTS.—Amounts collected under this section shall 

22 be deposited in the account for salaries and expenses of the Administration. 

23 § 30712. Conflicts of interest; unlawful acts and omissions; 

24 revocation and suspensions of licenses; cease and 

25 desist orders; injunctions and other orders 

26 (a) ACTIONS AND PROCEDURES UNDER OTHER PROVISIONS.—To the ex27 tent that the actions and procedures described in sections 30313, 30317, 

28 30319, and 30321(b) of this title are not inconsistent with the requirements 

29 of this chapter, the Administrator may take those actions under those proce30 dures in carrying out this chapter. 

31 (b) APPLICABILITY OF REQUIREMENTS UNDER OTHER PROVISIONS.—To 

32 the extent that the requirements described in sections 30313, 30317, 30319, 

33 and 30321(b) of this title are not inconsistent with the requirements of this 

34 chapter, an officer, director, employee, agent, or other participant in the 

35 management or conduct of the affairs of a renewable fuel capital investment 

36 company shall be subject to the requirements of sections 30313, 30317, 

37 30319, and 30321(b) of this title. 

38 § 30713. Removal or suspension of directors or officers 

39 Using the procedures for removing or suspending a director or an officer 

40 of a licensee under section 30320 of this title (to the extent that those pro41 cedures are not inconsistent with the requirements of this chapter), the AdVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00375 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 ministrator may remove or suspend a director or officer of a renewable fuel 

2 capital investment company. 

3 § 30714. Termination 

4 The program shall terminate at the end of the second full fiscal year after 

5 the date on which the Administrator establishes the program. 

6 DIVISION C—SURETY BOND GUARANTEE 

7 PROGRAM 

8 CHAPTER 321—SURETY BOND GUARANTEE PROGRAM 

Sec. 

32101. Definitions. 

32102. Surety bond guarantees and indemnification agreements. 

32103. Surety bond guarantee fund. 

9 § 32101. Definitions 

10 In this chapter: 

11 (1) BID BOND.—The term ‘‘bid bond’’ means a bond conditioned on 

12 the bidder on a contract— 

13 (A) entering into the contract, if the bidder receives the award 

14 of the contract; and 

15 (B) furnishing the prescribed payment bond and performance 

16 bond. 

17 (2) BOND.—Except in paragraphs (1), (7), and (8), the term ‘‘bond’’ 

18 means— 

19 (A) a bid bond; 

20 (B) a payment bond; 

21 (C) a performance bond; and 

22 (D) a bond that is ancillary to a bid bond, payment bond, or 

23 performance bond. 

24 (3) GUARANTEE.—The term ‘‘guarantee’’ means a guarantee of a 

25 bond issued under section 32102(a) of this title. 

26 (4) INDEMNIFICATION AGREEMENT.—The term ‘‘indemnification 

27 agreement’’ means an agreement entered into between the Adminis28 trator and a participating surety under section 32102(b) of this title. 

29 (5) OBLIGEE.—The term ‘‘obligee’’ means— 

30 (A) in the case of a bid bond, the person requesting bids for 

31 the performance of a contract; or 

32 (B) in the case of a payment bond or performance bond, the 

33 person that has contracted with a principal for the completion of 

34 the contract and to which the obligation of the surety runs in the 

35 event of a breach by the principal of a condition of a payment 

36 bond or performance bond. 

37 (6) PARTICIPATING SURETY.— 


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1 (A) IN GENERAL.—The term ‘‘participating surety’’ means a 

2 surety to which a guarantee or commitment to guarantee is issued 

3 under section 32102(a)(1) of this title. 

4 (B) INCLUSION.—The term ‘‘participating surety’’ includes a 

5 preferred surety. 

6 (7) PAYMENT BOND.—The term ‘‘payment bond’’ means a bond con7 ditioned on the payment by the principal of money to persons under 

8 contract with the principal. 

9 (8) PERFORMANCE BOND.—The term ‘‘performance bond’’ means a 

10 bond conditioned on the completion by the principal of a contract in 

11 accordance with the terms of the contract. 

12 (9) PREFERRED SURETY.—The term ‘‘preferred surety’’ means a 

13 participating surety that is a participant in the preferred surety bond 

14 guarantee program. 

15 (10) PREFERRED SURETY BOND GUARANTEE PROGRAM.—The term 

16 ‘‘preferred surety bond guarantee program’’ means the program under 

17 section 32102(a)(4) of this title. 

18 (11) PRIME CONTRACTOR.—The term ‘‘prime contractor’’ means the 

19 person with whom the obligee has contracted to perform the contract. 

20 (12) PRINCIPAL.— 

21 (A) IN GENERAL.—The term ‘‘principal’’ means— 

22 (i) in the case of a bid bond, a person that bids for the 

23 award of a contract; or 

24 (ii) the person— 

25 (I) that is primarily liable to complete a contract for 

26 the obligee or to make a payment to another person in 

27 respect of the contract; and 

28 (II) for whose performance of the person’s obligation 

29 the surety is bound under the terms of a payment bond 

30 or performance bond. 

31 (B) PRIME CONTRACTOR OR SUBCONTRACTOR.—A principal 

32 may be a prime contractor or a subcontractor. 

33 (13) PROGRAM.—The term ‘‘program’’ means the surety bond guar34 antee program. 

35 (14) SUBCONTRACTOR.—The term ‘‘subcontractor’’ means a person 

36 that contracts with a prime contractor or with another subcontractor 

37 to perform a contract. 

38 (15) SURETY.—The term ‘‘surety’’ means a person that— 

39 (A) under the terms of a bid bond, undertakes to pay a sum 

40 of money to the obligee if the principal breaches the conditions of 

41 the bond; 


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1 (B) under the terms of a performance bond, undertakes to incur 

2 the cost of fulfilling the terms of a contract if the principal 

3 breaches the conditions of the contract; 

4 (C) under the terms of a payment bond, undertakes to make 

5 payment to all persons supplying labor and material in the pros6 ecution of the work provided for in the contract if the principal 

7 fails to make prompt payment; or 

8 (D) is an agent, independent agent, underwriter, or any other 

9 person authorized to act on behalf of a person described in sub10 paragraph (A), (B), or (C). 

11 § 32102. Surety bond guarantees and indemnification agree12 ments 

13 (a) GUARANTEE OF SURETY AGAINST LOSS FROM PRINCIPAL’S BREACH

14 OF BOND.— 

15 (1) IN GENERAL.—The Administrator may, on such terms and con16 ditions as the Administrator may prescribe, guarantee and enter into 

17 commitments to guarantee a surety against loss resulting from a 

18 breach of the terms of a bond by a principal on any total work order 

19 or contract amount that at the time of bond execution does not exceed 

20 $2,000,000. 

21 (2) TERMS AND CONDITIONS.—The terms and conditions of guaran22 tees and commitments under paragraph (1) may vary from surety to 

23 surety on the basis of the Administrator’s experience with the par24 ticular surety. 

25 (3) ELIGIBILITY.—A guarantee of a bond shall not be issued under 

26 paragraph (1) unless— 

27 (A) the person that would be principal under the bond is a small 

28 business concern; 

29 (B) the bond is required for the person to bid on a contract or 

30 to serve as a prime contractor or subcontractor on a contract; 

31 (C) the person is not able to obtain the bond on reasonable 

32 terms and conditions without a guarantee under this section; and 

33 (D)(i) there is a reasonable expectation that the principal will 

34 perform the covenants and conditions of the contract with respect 

35 to which the bond is required; and 

36 (ii) the terms and conditions of the bond are reasonable in the 

37 light of the risks involved and the extent of the surety’s participa38 tion. 

39 (4) PREFERRED SURETY BOND GUARANTEE PROGRAM.— 

40 (A) IN GENERAL.—The Administrator may authorize a surety, 

41 without further approval by the Administrator, to issue, monitor, 


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1 and service bonds that are subject to a guarantee under paragraph 

2 (1). 

3 (B) ACTION BY THE ADMINISTRATOR.—The Administrator shall 

4 promptly act on an application from a surety to participate in the 

5 preferred surety bond guarantee program, in accordance with cri6 teria and procedures established in regulations under subsection 

7 (d). 

8 (C) REDUCTION OF ALLOTMENT; TERMINATION.—The Adminis9 trator may reduce the allotment of bond guarantee authority or 

10 terminate the participation of a preferred surety based on the rate 

11 of participation of the preferred surety during the 4 most recent 

12 fiscal year quarters compared with the median rate of participa13 tion by the other preferred sureties. 

14 (b) INDEMNIFICATION OF PARTICIPATING SURETY AGAINST LOSS FROM

15 AVOIDING BREACH.— 

16 (1) IN GENERAL.—In connection with the issuance of a guarantee 

17 to a surety, the Administrator may enter into an indemnification agree18 ment with a participating surety to indemnify the participating surety 

19 against a loss sustained by the participating surety in avoiding or at20 tempting to avoid a breach of the terms of a bond guaranteed by the 

21 Administrator under subsection (a). 

22 (2) DETERMINATION.—Before making any payment under this sub23 section, the Administrator shall determine that a breach of the terms 

24 of the bond was imminent. 

25 (3) APPROVAL.—A participating surety shall obtain approval from 

26 the Administrator before making any payments under this subsection 

27 unless the participating surety is a preferred surety. 

28 (4) LIMITATION ON AMOUNT OF PAYMENT.— 

29 (A) IN GENERAL.—Subject to subparagraph (B), no payment by 

30 the Administrator under this subsection shall exceed 10 percent of 

31 the contract price unless the Administrator determines that a 

32 greater payment should be made as a result of a finding by the 

33 Administrator that the participating surety’s loss sustained in 

34 avoiding or attempting to avoid the breach was necessary and rea35 sonable. 

36 (B) MAXIMUM AMOUNT.—In no event shall the Administrator 

37 pay a participating surety under this subsection an amount ex38 ceeding the guaranteed share of the bond available to the partici39 pating surety under subsection (a). 


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1 (c) AMOUNT OF LIABILITY OF THE ADMINISTRATOR.—A guarantee or in2 demnification agreement shall obligate the Administrator to pay to the par3 ticipating surety— 

4 (1) in the case of a preferred surety, an amount not to exceed 70 

5 percent of the amount of the loss incurred and paid by the preferred 

6 surety; or 

7 (2) in the case of a participating surety other than a preferred sur8 ety— 

9 (A) an amount not to exceed 90 percent of the amount of the 

10 loss incurred and paid by the participating surety (but in no event 

11 may the Administrator make a duplicate payment under sub12 section (b) or any other provision of this section); or 

13 (B) the amount that is equal to 90 percent of the loss incurred 

14 and paid by the participating surety, if— 

15 (i) the total amount of the contract at the time of execution 

16 of the bond or bonds is $100,000 or less; or 

17 (ii) the bond was issued to a small business concern owned 

18 and controlled by socially and economically disadvantaged in19 dividuals or to a qualified HUBZone small business concern. 

20 (d) REGULATIONS.— 

21 (1) IN GENERAL.—The Administrator may prescribe regulations for 

22 participating sureties. 

23 (2) CONTENTS.—The regulations under paragraph (1) shall require 

24 a participating surety to meet standards established by the Adminis25 trator for underwriting, claim practices, and loss ratios. 

26 (e) REIMBURSEMENT OF SURETY.— 

27 (1) IN GENERAL.—Except as provided in paragraph (2), the Admin28 istrator shall reimburse a participating surety as provided in a guar29 antee or indemnification agreement. 

30 (2) NO LIABILITY.—The Administrator shall be relieved of all liabil31 ity under a guarantee or indemnification agreement if— 

32 (A) the participating surety obtained the guarantee or indem33 nification agreement, or applied for reimbursement, by fraud or 

34 material misrepresentation; 

35 (B) the total contract amount at the time of execution of the 

36 bond or bonds exceeds $2,000,000; 

37 (C) the participating surety has breached a material term or 

38 condition of the guarantee or indemnification agreement; or 

39 (D) the participating surety has substantially violated the regu40 lations prescribed under subsection (d). 


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1 (f) REIMBURSEMENT PROCEDURE.—The Administrator may, on such 

2 terms and conditions as the Administrator may prescribe, establish a proce3 dure for reimbursing a participating surety for the paid losses of the partici4 pating surety billed each month, based on prior monthly payments to the 

5 participating surety, with subsequent adjustments after such reimburse6 ment. 

7 (g) REPORTING BY PARTICIPATING SURETIES; AUDITS.— 

8 (1) REPORTING BY PARTICIPATING SURETIES.—A participating sur9 ety shall submit reports to the Administrator at such times and in such 

10 form as the Administrator may require. 

11 (2) AUDITS.— 

12 (A) IN GENERAL.—The Administrator may at all reasonable 

13 times audit, in the offices of a participating surety, all records rel14 evant to the Administration’s guarantee, commitments to guar15 antee, and indemnification agreements issued to or entered into 

16 with the participating surety under this section. 

17 (B) PREFERRED SURETY BOND GUARANTEE PROGRAM PARTICI18 PANTS.—A preferred surety shall be audited at least once every 

19 3 years by examiners selected and approved by the Administrator. 

20 (h) ADMINISTRATIVE PROVISIONS.—The Administrator shall— 

21 (1) administer the program on a prudent and economically justifiable 

22 basis; and 

23 (2) establish such fees for small business concerns and premiums for 

24 participating sureties as the Administrator considers reasonable and 

25 necessary, to be payable at such times and under such conditions as 

26 the Administrator may determine. 

27 § 32103. Surety bond guarantee fund 

28 (a) IN GENERAL.—There is created in the Treasury a separate fund for 

29 guarantees, which shall be available to the Administrator without fiscal year 

30 limitation as a revolving fund for the purposes of the program. 

31 (b) DEPOSIT OF AMOUNTS RECEIVED BY THE ADMINISTRATOR.—All 

32 amounts received by the Administrator (including any money, property, or 

33 assets derived by the Administrator from operations in connection with the 

34 program) shall be deposited in the fund. 

35 (c) USE OF FUND.—All expenses and payments, excluding administrative 

36 expenses, pursuant to operations of the Administrator under the program 

37 shall be paid from the fund. 

38 (d) APPROPRIATIONS.—Such sums as may be appropriated to the Fund 

39 to carry out the programs authorized by this chapter shall be without fiscal 

40 year limitation. 


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1 DIVISION D—CERTIFIED DEVELOPMENT 

2 COMPANY PROGRAM 

3 CHAPTER 331—CERTIFIED DEVELOPMENT COMPANY 

4 PROGRAM 

Sec. 

33101. Definitions. 

33102. Establishment of program. 

33103. Debenture guarantees. 

33104. Private debenture sales. 

33105. Pooling of debentures. 

33106. Prohibition of acceptance of funding with certain conditions, priorities, restrictions, 

or requirements. 

33107. Accredited lenders program. 

33108. Premier certified lenders program. 

33109. Foreclosure and liquidation of loans. 

5 § 33101. Definitions 

6 In this chapter: 

7 (1) ACCREDITED LENDER.—The term ‘‘accredited lender’’ means a 

8 qualified development company that is designated as an accredited 

9 lender under section 33107 of this title. 

10 (2) CERTIFIED DEVELOPMENT COMPANY.—The term ‘‘certified de11 velopment company’’ means a qualified development company that the 

12 Administrator certifies as meeting criteria established under this chap13 ter to receive assistance under the program. 

14 (3) COMMERCIAL LOAN.—The term ‘‘commercial loan’’ means a loan 

15 from a private source. 

16 (4) DEVELOPMENT COMPANY.—The term ‘‘development company’’ 

17 means an enterprise that is incorporated under State law with the au18 thority to promote and assist the growth and development of small 

19 business concerns in the area covered by the operations of the enter20 prise. 

21 (5) GUARANTEED DEBENTURE.—The term ‘‘guaranteed debenture’’ 

22 means a debenture that is guaranteed by the Administrator under the 

23 program. 

24 (6) PREMIER CERTIFIED LENDER.—The term ‘‘premier certified 

25 lender’’ means a certified development company that is designated as 

26 a premier certified lender under section 33108 of this title. 

27 (7) PROGRAM.—The term ‘‘program’’ means the certified develop28 ment company program. 

29 (8) PROJECT.—The term ‘‘project’’ means a project described in sec30 tion 33103(a)(1) of this title. 

31 (9) QUALIFIED DEVELOPMENT COMPANY.— 

32 (A) IN GENERAL.—The term ‘‘qualified development company’’ 

33 means a development company that, as determined by the Admin34 istrator, has— 


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1 (i) a full-time professional staff; 

2 (ii) professional management ability (including adequate 

3 accounting, legal, and business-servicing abilities); and 

4 (iii) a board of directors, or membership, that meets on a 

5 regular basis to make management decisions for the develop6 ment company, including decisions relating to the making and 

7 servicing of loans by the development company. 

8 (B) DEVELOPMENT COMPANIES IN A RURAL AREA.—A develop9 ment company in a rural area that does not satisfy the require10 ments of clauses (i) and (ii) of subparagraph (A) shall be deemed 

11 to satisfy those requirements if the development company con12 tracts with a certified development company that does satisfy 

13 those requirements and is located in the same general area to pro14 vide the services described in those clauses. 

15 (10) SMALL MANUFACTURER.—The term ‘‘small manufacturer’’ 

16 means a small business concern— 

17 (A) the primary business of which is classified in sector 31, 32, 

18 or 33 of the North American Industry Classification System; and 

19 (B) all of the production facilities of which are located in the 

20 United States. 

21 § 33102. Establishment of program 

22 There is established within the Administration a certified development 

23 company program for the purpose of fostering economic development and 

24 creating and preserving job opportunities in both urban and rural areas by 

25 providing long-term financing for small business concerns. 

26 § 33103. Debenture guarantees 

27 (a) IN GENERAL.— 

28 (1) AUTHORITY.—The Administrator may guarantee the timely pay29 ment of all principal and interest as scheduled on a debenture issued 

30 by a certified development company the proceeds of which are used to 

31 make a loan to a small business concern to be used for a project for 

32 a sound business purpose, approved by the Administrator, of plant ac33 quisition, construction, conversion, or expansion (including land acqui34 sition). 

35 (2) LIMITATION.—The Administrator shall not guarantee a deben36 ture for the purposes of making a loan described in paragraph (1) un37 less necessary funds for making the loan are not available to the cer38 tified development company from a private source on reasonable terms. 

39 (3) TERMS AND CONDITIONS.—A debenture guarantee may be made 

40 on such terms and conditions as the Administrator may by regulation 

41 determine to be appropriate. 


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1 (4) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full 

2 faith and credit of the United States is pledged to the payment of all 

3 amounts guaranteed under this subsection. 

4 (5) SUBORDINATION.—A guaranteed debenture may be subordinated 

5 by the Administrator to any other debenture, promissory note, or other 

6 debt or obligation of the certified development company that issues the 

7 debenture. 

8 (b) ELIGIBILITY FOR ASSISTANCE.— 

9 (1) ECONOMIC DEVELOPMENT OBJECTIVES.— 

10 (A) DEFINITIONS.—In subclauses (IX) and (X) of subpara11 graph (B)(iii), terms have the meanings given the terms under the 

12 Leadership in Energy and Environmental Design standard for 

13 green building certification, as determined by the Administrator. 

14 (B) ELIGIBILITY.—To be eligible for assistance under the pro15 gram, a certified development company shall demonstrate that the 

16 project to be funded with the proceeds of a guaranteed debenture 

17 is directed toward at least one of the following economic develop18 ment objectives: 

19 (i) JOB CREATION OR RETENTION OBJECTIVE.—The cre20 ation of job opportunities within 2 years after completion of 

21 the project, or the retention of jobs attributable to the 

22 project, as provided in paragraph (3). 

23 (ii) COMMUNITY ECONOMIC IMPROVEMENT OBJECTIVE.— 

24 Improvement of the economy of the local community, such as 

25 stimulating other business development in the community, 

26 bringing new income into the area, or assisting the commu27 nity in diversifying and stabilizing its economy. 

28 (iii) PUBLIC POLICY OBJECTIVE.—The achievement of one 

29 or more of the following public policy objectives: 

30 (I) Business district revitalization. 

31 (II) Expansion of exports. 

32 (III) Expansion of minority business development or 

33 women-owned business development. 

34 (IV) Rural development. 

35 (V) Expansion of small business concerns owned and 

36 controlled by veterans, especially small business concerns 

37 owned and controlled by service-disabled veterans. 

38 (VI) Enhancement of economic competition, including 

39 the advancement of technology, plan retooling, conver40 sion to robotics, and competition with imports. 


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1 (VII) Changes necessitated by Federal budget cut2 backs, including cutbacks in defense-related industries. 

3 (VIII) Business restructuring arising from Federally 

4 mandated standards or policies affecting the environment 

5 or the safety and health of employees. 

6 (IX) Reduction of energy consumption by at least 10 

7 percent. 

8 (X) Increased use of sustainable design, including— 

9 (aa) designs that reduce the use of greenhouse 

10 gas emitting fossil fuels; and 

11 (bb) low-impact designs to produce buildings that 

12 reduce the use of nonrenewable resources and mini13 mize environmental impact. 

14 (XI) Plant, equipment, and process upgrades of re15 newable energy sources such as— 

16 (aa) the small-scale production of energy for indi17 vidual buildings or communities consumption, com18 monly known as micropower; and 

19 (bb) renewable fuels producers, including biodiesel 

20 and ethanol producers. 

21 (2) COMMUNITY ECONOMIC IMPROVEMENT OBJECTIVE; PUBLIC POL22 ICY OBJECTIVE.—If eligibility is based on the criteria stated in clause 

23 (ii) or (iii) of paragraph (1)(B), the project need not meet the job cre24 ation or job preservation criteria developed by the Administrator if the 

25 overall portfolio of the development company meets or exceeds those job 

26 creation or retention criteria. 

27 (3) JOB CREATION OR RETENTION OBJECTIVE.— 

28 (A) PROJECT STANDARD.—A project meets the job creation or 

29 retention objective under paragraph (1)(B)(i)) if the project cre30 ates or retains— 

31 (i) one job for every $50,000 guaranteed by the Adminis32 trator; or 

33 (ii) in the case of a project of a small manufacturer, one 

34 job for every $100,000 guaranteed by the Administrator. 

35 (B) PORTFOLIO STANDARD.—A project need not meet the 

36 project standard under subparagraph (A) if— 

37 (i) eligibility of the project is based on the community eco38 nomic improvement objective under paragraph (1)(B)(ii) or 

39 one or more of the public policy objectives under paragraph 

40 (1)(B)(iii); and 


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1 (ii) after the loan is made for the project, the certified de2 velopment company’s portfolio of outstanding guaranteed de3 bentures, excluding guaranteed debentures for loans to small 

4 manufacturers, creates or retains— 

5 (I) one job for every $50,000 guaranteed by the Ad6 ministrator; or 

7 (II) in the case of a project in Alaska, Hawaii, a 

8 State-designated enterprise zone, an empowerment zone, 

9 an enterprise community, or labor surplus area, as deter10 mined by the Secretary of Labor, or in any other area 

11 designated by the Administrator, one job for every 

12 $75,000 guaranteed by the Administrator. 

13 (4) WAIVER OF REQUIREMENTS.— 

14 (A) IN GENERAL.—Under regulations prescribed by the Admin15 istrator, the Administrator may waive, on a case-by-case basis or 

16 by regulation, any requirement of paragraph (3) (other than the 

17 requirement that a calculation under paragraph (3)(B)(ii)(II) ex18 clude debentures for loans to small manufacturers). 

19 (B) DOLLAR AMOUNTS.—The Administrator may not, in con20 nection with any waiver under subparagraph (A), adopt any dollar 

21 amount that is lower than a dollar amount specified in paragraph 

22 (3). 

23 (c) CRITERIA FOR ASSISTANCE.— 

24 (1) IN GENERAL.—A certified development company shall meet cri25 teria established by the Administrator, including such an extent of par26 ticipation to be required or amount of paid-in capital to be used in each 

27 instance as the Administrator determines to be reasonable. 

28 (2) SMALL BUSINESS CONCERN FUNDS.—In the case of any project 

29 of a small business concern financed under the program, the small 

30 business concern (or its owners, stockholders, or affiliates) receiving as31 sistance through a body authorized by this chapter shall provide— 

32 (A) at least 15 percent of the total financed cost of the project 

33 if the small business concern has been in operation for a period 

34 of 2 years or less or if the project involves the construction of a 

35 limited-purpose or single-purpose building or other structure; 

36 (B) at least 20 percent of the total financed cost of the project 

37 if the project involves both of the conditions described in subpara38 graph (A); or 

39 (C) an amount specified by the certified development company, 

40 which shall be at least 10 percent of the total financed cost of the 


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1 project, if the project involves neither of the conditions described 

2 in subparagraph (A). 

3 (3) THIRD-PARTY FUNDS.— 

4 (A) THIRD-PARTY SOURCES.—Third-party funds for a project of 

5 a small business concern financed under the program may be de6 rived, in whole or in part, from— 

7 (i) a State or local government; 

8 (ii) a bank or other financial institution; 

9 (iii) a foundation or other nonprofit institution; or 

10 (iv) the small business concern (or its owners, stockholders, 

11 or affiliates). 

12 (B) THIRD-PARTY FUNDING REQUIREMENT.—Not less than 50 

13 percent of the total financed cost of a project described in sub14 paragraph (A) of (B) of paragraph (2) shall come from one or 

15 more third-party sources described in clauses (i), (ii), and (iii) of 

16 subparagraph (A). 

17 (C) SELLER FINANCING.—Financing provided by a seller of 

18 property to a small business concern for a project may be used 

19 to meet the requirements of this paragraph if the seller subordi20 nates the interest of the seller in the property to the debenture 

21 guaranteed by the Administrator. 

22 (4) COLLATERAL.— 

23 (A) IN GENERAL.—The collateral provided by a small business 

24 concern— 

25 (i) shall generally include a subordinate lien position on the 

26 property being financed under the program; and 

27 (ii) is only one of the factors to be evaluated in the credit 

28 determination. 

29 (B) ADDITIONAL COLLATERAL.—Additional collateral shall be 

30 required only if the Administrator determines, on a case-by-case 

31 basis, that additional security is necessary to protect the interest 

32 of the Government. 

33 (C) APPRAISALS.—With respect to commercial real property 

34 provided by a small business concern as collateral, an appraisal of 

35 the property by a State-licensed or State-certified appraiser— 

36 (i) shall be required by the Administrator before disburse37 ment of the loan if the estimated value of the property is 

38 more than $250,000; and 

39 (ii) may be required by the Administrator or the certified 

40 development company before disbursement of the loan, if— 


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1 (I) the estimated value of the property is $250,000 or 

2 less; and 

3 (II) an appraisal is necessary for appropriate evalua4 tion of creditworthiness. 

5 (5) LEASING.— 

6 (A) IN GENERAL.—In the case of a project to construct a new 

7 facility for a small business concern, up to 33 percent of the total 

8 project may be leased, if reasonable projections of growth dem9 onstrate that the small business concern— 

10 (i) will need additional space within 3 years after the date 

11 of completion of the facility; and 

12 (ii) will fully utilize the additional space within 10 years 

13 after the date of completion of the facility. 

14 (B) LIMITATION ON LEASING.—In addition to any portion of a 

15 project of a small business concern permitted to be leased under 

16 subparagraph (A), not to exceed 20 percent of the project may be 

17 leased by the small business concern to one or more other tenants 

18 if the small business occupies permanently and uses not less than 

19 a total of 60 percent of the space in the project after the execution 

20 of any leases authorized under this section. 

21 (6) OWNERSHIP REQUIREMENTS.— 

22 (A) OWNERSHIP BY SPOUSE UNDER COMMUNITY PROPERTY

23 LAW.—Ownership requirements to determine the eligibility of a 

24 small business concern that applies for assistance under the pro25 gram shall be determined without regard to any ownership interest 

26 of a spouse arising solely from the application of the community 

27 property law of a State for purposes of determining marital inter28 ests. 

29 (B) OWNERSHIP BY RELATIVES.— 

30 (i) IN GENERAL.—The Administrator shall not decline to 

31 issue a debenture guarantee for a project of a small business 

32 concern on the ground that the ownership interests of the 

33 small business concern and the ownership interests of the 

34 property to be financed with the proceeds of a loan made with 

35 the proceeds of the guaranteed debenture are not identical be36 cause one or more of the classes of relatives described in 

37 clause (ii) have an ownership interest in the small business 

38 concern or the property if the Administrator determines, on 

39 a case-by-case basis, that the ownership interest, the guar40 antee, and the proceeds of the loan will substantially benefit 

41 the small business concern. 


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1 (ii) CLASSES OF RELATIVES.—The classes of relatives re2 ferred to in clause (i) are father, mother, son, daughter, wife, 

3 husband, brother, or sister. 

4 (d) DEBENTURE AMOUNT AND INTEREST.— 

5 (1) MAXIMUM DEBENTURE AMOUNT.—The amount of a guaranteed 

6 debenture shall not exceed the aggregate amount of the loans to be 

7 made from the proceeds of the guaranteed debenture (other than any 

8 excess attributable to the administrative costs of the loans). 

9 (2) MINIMUM INTEREST RATE.—The interest rate on a guaranteed 

10 debenture shall be not less than the rate of interest determined by the 

11 Secretary of the Treasury for purposes of section 30304(b) of this title. 

12 (e) LOAN APPROVAL, AMOUNT, AND INTEREST RATE.— 

13 (1) APPROVAL BY THE ADMINISTRATOR.—The Administrator shall 

14 approve each loan made with the proceeds of a guaranteed debenture. 

15 (2) MAXIMUM LOAN AMOUNT.— 

16 (A) PERCENTAGE OF PROJECT COST.—The amount of a loan 

17 made with the proceeds of a guaranteed debenture shall not exceed 

18 the amount that is equal to 50 percent of the cost of the project 

19 with respect to which the loan is made. 

20 (B) DOLLAR AMOUNT.— 

21 (i) IN GENERAL.—Except as provided in clause (ii), the 

22 amount of a loan made with the proceeds of a guaranteed de23 benture shall not exceed $1,500,000. 

24 (ii) EXCEPTIONS.— 

25 (I) PUBLIC POLICY OBJECTIVES.—The amount of a 

26 loan for a project directed toward one or more of the 

27 public policy objectives described in subsection 

28 (b)(1)(B)(iii) shall not exceed $2,000,000. 

29 (II) SMALL MANUFACTURERS.—The amount of a loan 

30 to a small manufacturer shall not exceed $4,000,000. 

31 (III) REDUCTION OF ENERGY CONSUMPTION.—The 

32 amount of a loan for a project that reduces the bor33 rower’s energy consumption by at least 10 percent shall 

34 not exceed $4,000,000. 

35 (IV) GENERATION OF RENEWABLE ENERGY OR RE36 NEWABLE FUEL.—The amount of a loan for a project 

37 that generates renewable energy or renewable fuel (such 

38 as biodiesel or ethanol production) shall not exceed 

39 $4,000,000. 

40 (f) COMMERCIAL LOAN INTEREST RATE.— 


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1 (1) PURPOSE.—The purpose of this subsection is to facilitate the or2 derly and necessary flow of long-term loans from certified development 

3 companies to small business concerns. 

4 (2) MAXIMUM INTEREST RATE.—Notwithstanding the provisions of 

5 the constitution or laws of any State limiting the rate or amount of 

6 interest that may be charged, taken, received, or reserved, the max7 imum legal rate of interest on any commercial loan that funds any por8 tion of the cost of the project financed under the program that is not 

9 funded by a guaranteed debenture shall be a rate established by the 

10 Administrator under paragraph (3). 

11 (3) ESTABLISHMENT BY THE ADMINISTRATOR.—The Administrator 

12 shall establish and publish quarterly a maximum legal interest rate for 

13 any commercial loan that funds any portion of the cost of a project 

14 financed under the program that is not funded by a guaranteed deben15 ture. 

16 (g) FEES AND CHARGES.— 

17 (1) LOAN FEES.— 

18 (A) IN GENERAL.—With respect to each loan made with the 

19 proceeds of a guaranteed debenture, the Administrator shall assess 

20 and collect a fee, which shall be payable by the borrowing small 

21 business concern, in an amount established annually by the Ad22 ministrator. 

23 (B) AMOUNT.— 

24 (i) IN GENERAL.—Except as provided in clause (ii), the 

25 amount of a loan fee shall not exceed the lesser of— 

26 (I) 0.9375 percent per year of the outstanding balance 

27 of the loan; or 

28 (II) the minimum amount necessary to reduce to zero 

29 the cost (as defined in section 502 of the Federal Credit 

30 Reform Act of 1990 (2 U.S.C. 661a)) to the Adminis31 trator of purchasing and guaranteeing debentures under 

32 the program. 

33 (ii) EXCEPTION.— 

34 (I) IN GENERAL.—In the case of a loan made during 

35 the 2-year period beginning on October 1, 2002, the 

36 amount of a loan fee shall be 50 percent of the amount 

37 established under clause (i), for the life of the loan. 

38 (II) LIMITATION.—Subclause (I) shall be effective only 

39 to the extent that funds are made available under appro40 priations Acts, which funds shall be used by the Admin41 istrator to offset the cost (as defined in section 502 of 


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1 the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 

2 of that subclause. 

3 (C) USE OF PROCEEDS.—The Administrator shall use the pro4 ceeds of loan fees collected to offset the cost (as defined in section 

5 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 

6 to the Administrator of making guarantees under the program. 

7 (2) ADMINISTRATIVE EXPENSE CHARGES.—The Administrator may 

8 impose a charge for administrative expenses with respect to a guaran9 teed debenture. 

10 (3) PARTICIPATION FEES.— 

11 (A) IN GENERAL.—The Administrator shall collect a one-time 

12 fee in an amount equal to 50 basis points on the total participa13 tion in a project by an entity described in clause (i), (ii), or (iii) 

14 of subsection (c)(3)(A) if the participation will occupy a senior 

15 credit position to that of the certified development company. 

16 (B) USE OF PROCEEDS.—All proceeds of the participation fee 

17 shall be used to offset the cost (as defined in section 502 of the 

18 Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) to the Ad19 ministrator of making guarantees under the program. 

20 (4) CERTIFIED DEVELOPMENT COMPANY FEES.— 

21 (A) IN GENERAL.—The Administrator shall collect annually 

22 from a certified development company a fee of 0.125 percent of 

23 the outstanding principal balance of any guaranteed debenture ap24 proved by the Administrator on or after October 1, 1996. 

25 (B) DERIVATION.—The fee under subparagraph (A) shall be de26 rived from the servicing fees collected by the certified development 

27 company pursuant to regulation and not from any additional fee 

28 imposed on a small business concern. 

29 (C) USE OF PROCEEDS.—All proceeds of the certified develop30 ment company fee shall be used to offset the cost (as defined in 

31 section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 

32 661a)) to the Administrator of making guarantees under the pro33 gram. 

34 (5) APPLICABILITY.—The fees authorized by this subsection apply to 

35 financings approved by the Administrator on or after October 1, 1996. 

36 (h) CALCULATION OF SUBSIDY RATE.—All fees, interest, and profits re37 ceived and retained by the Administrator under the program shall be in38 cluded in the calculations made by the Director of the Office of Manage39 ment and Budget to offset the cost (as defined in section 502 of the Federal 

40 Credit Reform Act of 1990 (2 U.S.C. 661a)) to the Administrator of pur41 chasing and guaranteeing debentures under the program. 


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1 (i) REQUIRED ACTIONS ON DEFAULT.— 

2 (1) INITIAL ACTIONS.—Not later than the 45th day after the date 

3 on which a payment on a loan funded through a guaranteed debenture 

4 is due and not received, the Administrator shall— 

5 (A) take all necessary steps to bring the loan current; or 

6 (B) implement a formal written deferral agreement. 

7 (2) PURCHASE OR ACCELERATION OF DEBENTURE.—Not later than 

8 the 65th day after the date on which a payment on a loan described 

9 in paragraph (1) is due and not received, and absent a formal written 

10 deferral agreement, the Administrator shall take all necessary steps to 

11 purchase or accelerate the guaranteed debenture. 

12 (3) PREPAYMENT PENALTIES.—With respect to the portion of a 

13 project derived from funds described in subsection (c)(3), the Adminis14 tration— 

15 (A) shall negotiate the elimination of any prepayment penalties 

16 or late fees on a defaulted loan made before September 30, 1996; 

17 (B) shall not pay any prepayment penalty or late fee on the de18 fault-based purchase of a loan issued after September 30, 1996; 

19 and 

20 (C) for any project financed after September 30, 1996, shall not 

21 pay any default interest rate higher than the interest rate on the 

22 note prior to the date of default. 

23 § 33104. Private debenture sales 

24 (a) IN GENERAL.—Notwithstanding any other law (including a regula25 tion), all guaranteed debentures shall be sold to investors, publicly or by pri26 vate placement. 

27 (b) FEDERAL FINANCING BANK.—Nothing in any provision of law au28 thorizes the Federal Financing Bank to acquire— 

29 (1) any obligation the payment of principal or interest on which at 

30 any time has been guaranteed in whole or in part under the program 

31 that is being sold under subsection (a); 

32 (2) any obligation that is an interest in an obligation described in 

33 paragraph (1); or 

34 (3) any obligation that is secured by, or substantially all of the value 

35 of which is attributable to, an obligation described in paragraph (1) or 

36 (2). 

37 § 33105. Pooling of debentures 

38 (a) ISSUANCE.— 

39 (1) IN GENERAL.—The Administrator may issue trust certificates 

40 representing ownership of all or a fractional part of a guaranteed de41 benture. 


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1 (2) TRUST OR POOL.—A trust certificate issued under paragraph (1) 

2 shall be based on and backed by a trust or pool approved by the Ad3 ministrator and composed solely of guaranteed debentures. 

4 (b) GUARANTEE.— 

5 (1) IN GENERAL.—The Administrator may, on such terms and con6 ditions as the Administrator considers appropriate, guarantee the time7 ly payment of the principal of and interest on trust certificates issued 

8 by the Administrator (or an agent of the Administrator) for purposes 

9 of this section. 

10 (2) LIMITATION.—A guarantee shall be limited to the extent of prin11 cipal and interest on the guaranteed debentures that compose the trust 

12 or pool. 

13 (3) PREPAYMENT ON REDEMPTION.— 

14 (A) REDUCTION OF GUARANTEE.—If a guaranteed debenture in 

15 a trust or pool is prepaid, voluntarily or in the event of default, 

16 the guarantee of timely payment of principal and interest on the 

17 trust certificates shall be reduced in proportion to the amount of 

18 principal and interest that the prepaid guaranteed debenture rep19 resents in the trust or pool. 

20 (B) LIMITATION ON GUARANTEE OF INTEREST.—Interest on a 

21 prepaid or defaulted guaranteed debenture shall accrue and be 

22 guaranteed by the Administrator only through the date of pay23 ment on the guarantee. 

24 (C) CALL OF TRUST CERTIFICATE.—During the term of a trust 

25 certificate, the trust certificate may be called for redemption due 

26 to prepayment or default of all guaranteed debentures constituting 

27 the trust or pool. 

28 (c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 

29 and credit of the United States is pledged to the payment of all amounts 

30 that may be required to be paid under any guarantee of a trust certificate 

31 issued by the Administrator (or an agent of the Administrator) under this 

32 section. 

33 (d) FEES.— 

34 (1) ADMINISTRATOR.—The Administrator shall not collect any fee 

35 for a guarantee under this section. 

36 (2) AGENT OF THE ADMINISTRATOR.—This subsection does not pre37 clude an agent of the Administrator from collecting a fee approved by 

38 the Administrator for performing the functions described in subsection 

39 (f)(2). 

40 (e) SUBROGATION RIGHTS; OWNERSHIP RIGHTS IN GUARANTEED DE41 BENTURES.— 


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1 (1) SUBROGATION.—If the Administrator pays a claim under a guar2 antee issued under this section, the Administrator shall be subrogated 

3 fully to the rights satisfied by the payment. 

4 (2) OWNERSHIP RIGHTS IN GUARANTEED DEBENTURES.—No Fed5 eral, State, or local law shall preclude or limit the exercise by the Ad6 ministrator of the Administrator’s ownership rights in the guaranteed 

7 debentures constituting the trust or pool against which the trust certifi8 cates are issued. 

9 (f) CENTRAL REGISTRATION; REGULATION OF BROKERS AND DEAL10 ERS.— 

11 (1) CENTRAL REGISTRATION.—The Administrator shall provide for 

12 a central registration of all trust certificates sold pursuant to this sec13 tion. 

14 (2) AGENT.— 

15 (A) IN GENERAL.—The Administrator shall contract with an 

16 agent to carry out on behalf of the Administrator— 

17 (i) the central registration functions under this section; and 

18 (ii) the issuance of trust certificates to facilitate poolings. 

19 (B) BOND OR INSURANCE.—The agent under subparagraph (A) 

20 shall provide a fidelity bond or insurance in such amounts as the 

21 Administrator determines to be necessary to fully protect the in22 terests of the Government. 

23 (3) DISCLOSURE.—The Administrator shall require a seller to dis24 close to a purchaser of a trust certificate issued under this section, be25 fore the sale, information on the terms, conditions, and yield of the 

26 trust certificate. 

27 (4) REGULATION OF BROKERS AND DEALERS.—The Administrator 

28 may regulate brokers and dealers in trust certificates sold under this 

29 section. 

30 (5) FORM OF REGISTRATION.—This subsection does not preclude the 

31 use of a book-entry or other electronic form of registration for trust 

32 certificates. 

33 § 33106. Prohibition of acceptance of funding with certain 

34 conditions, priorities, restrictions, or requirements 

35 Notwithstanding any other provision of law, a certified development com36 pany shall not accept funding from any source (including a Federal agency) 

37 if the funding— 

38 (1) includes any condition, priority, or restriction on the type of 

39 small business concern to which the certified development company 

40 may provide financial assistance under the program; or 


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1 (2) includes any condition or imposes any requirement, directly or 

2 indirectly, on any recipient of assistance under the program. 

3 § 33107. Accredited lenders program 

4 (a) ESTABLISHMENT OF PROGRAM.—The Administrator may establish as 

5 part of the program an accredited development company program for quali6 fied development companies that meet the requirements of subsection (b). 

7 (b) REQUIREMENTS.—The Administrator may designate a qualified devel8 opment company as an accredited lender if the qualified development com9 pany— 

10 (1) has been an active participant in the program for not less than 

11 the preceding 12 months; 

12 (2) has well-trained, qualified personnel who are knowledgeable in 

13 the Administration’s lending policies and procedures for the program; 

14 (3) has the ability to process, close, and service financing for plant 

15 and equipment under the program; 

16 (4) has a loss rate on the qualified development company’s deben17 tures that is reasonable and acceptable to the Administrator; 

18 (5) has a history of submitting to the Administrator complete and 

19 accurate debenture guarantee application packages; and 

20 (6) has demonstrated the ability to serve small business credit needs 

21 for financing plant and equipment through the program. 

22 (c) EXPEDITED PROCESSING OF LOAN APPLICATIONS.—The Adminis23 trator shall develop an expedited procedure for processing a loan application 

24 or servicing action submitted by an accredited lender. 

25 (d) SUSPENSION OR REVOCATION OF DESIGNATION.— 

26 (1) IN GENERAL.—The Administrator may suspend or revoke the 

27 designation of a qualified development company as an accredited lender 

28 if the Administrator determines that— 

29 (A) the qualified development company has not continued to 

30 meet the criteria for eligibility under subsection (b); or 

31 (B) the qualified development company has failed to adhere to 

32 the Administrator’s regulations or is violating any other applicable 

33 provision of law. 

34 (2) EFFECT.—A suspension or revocation under paragraph (1) shall 

35 not affect any outstanding debenture guarantee. 

36 § 33108. Premier certified lenders program 

37 (a) ESTABLISHMENT OF PROGRAM.—The Administrator may establish as 

38 part of the program a premier certified lenders program for certified devel39 opment companies that meet the requirements of subsection (b). 

40 (b) REQUIREMENTS.— 


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1 (1) APPLICATION.—To be eligible to participate in the premier cer2 tified lenders program, a certified development company shall submit 

3 to the Administrator an application at such time, in such manner, and 

4 containing such information as the Administrator may require. 

5 (2) DESIGNATION.—The Administrator may designate a certified de6 velopment company as a premier certified lender if— 

7 (A) the certified development company is an active certified de8 velopment company in good standing; 

9 (B) the certified development company has been an active par10 ticipant in the accredited lenders program during the entire 12- 

11 month period preceding the date on which the certified develop12 ment company submits an application under paragraph (1); 

13 (C) the certified development company has a history of— 

14 (i) submitting to the Administrator adequately analyzed de15 benture guarantee application packages; and 

16 (ii) properly closing loans under the program and servicing 

17 its loan portfolio; 

18 (D) the certified development company agrees to assume and to 

19 reimburse the Administrator— 

20 (i) for 10 percent of any loss sustained by the Adminis21 trator as a result of default by the certified development com22 pany in the payment of principal or interest on a guaranteed 

23 debenture issued by the certified development company; or 

24 (ii) for 15 percent of the loss, if the loss is attributable to 

25 a guaranteed debenture issued by the certified development 

26 company during any period for which an election is in effect 

27 under subsection (c)(8) for the certified development com28 pany; and 

29 (E) the Administrator determines, with respect to the certified 

30 development company, that the loss reserve established under sub31 section (c) is sufficient for the certified development company to 

32 meet its obligations to protect the Federal Government from risk 

33 of loss. 

34 (3) WAIVER OF REQUIREMENT.—The Administrator may waive the 

35 requirement of paragraph (2)(B) with respect to a certified develop36 ment company if the certified development company is qualified to par37 ticipate in the accredited lenders program. 

38 (4) APPLICABILITY OF CRITERIA AFTER DESIGNATION.—The Admin39 istrator may revoke the designation of a certified development company 

40 as a premier certified lender under this section at any time, if the Ad41 ministrator determines that the certified development company does not 


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1 meet any requirement described in subparagraphs (A) to (E) of para2 graph (2). 

3 (c) LOSS RESERVE.— 

4 (1) IN GENERAL.—A premier certified lender shall establish a loss 

5 reserve for financing approved under this section. 

6 (2) AMOUNT.—The amount of a loss reserve under paragraph (1) 

7 shall be 10 percent of the amount of the premier certified lender’s ex8 posure, as determined under subsection (b)(2)(D). 

9 (3) ASSETS.—A loss reserve under paragraph (1) shall be comprised 

10 of— 

11 (A) segregated funds on deposit in one or more accounts with 

12 one or more federally insured depository institutions selected by 

13 the premier certified lender, subject to a collateral assignment in 

14 favor of, and in a format acceptable to, the Administrator; 

15 (B) one or more irrevocable letters of credit, with a collateral 

16 assignment in favor of, and a commercially reasonable format ac17 ceptable to, the Administrator; or 

18 (C) any combination of the assets described in subparagraphs 

19 (A) and (B). 

20 (4) CONTRIBUTIONS.—A premier certified lender shall make con21 tributions to a loss reserve under paragraph (1) in the following 

22 amounts and at the following intervals: 

23 (A) 50 percent when a debenture is closed. 

24 (B) 25 percent additional not later than one year after a deben25 ture is closed. 

26 (C) 25 percent additional not later than 2 years after a deben27 ture is closed. 

28 (5) REIMBURSEMENT OF THE ADMINISTRATOR FOR LOSS.—If a loss 

29 is sustained by the Administrator, any portion of the loss reserve, and 

30 other funds provided by the premier certified lender as necessary, may 

31 be used to reimburse the Administrator for the premier certified lend32 er’s share of the loss as provided in subsection (b)(2)(D) of this sec33 tion. 

34 (6) REPLACEMENT OF USED FUNDS.—If a premier certified lender 

35 uses funds in its loss reserve, the premier certified lender shall replace 

36 an equivalent amount of funds in the loss reserve not later than 30 

37 days after the date of the use. 

38 (7) WITHDRAWALS.— 

39 (A) IN GENERAL.—The Administrator shall allow a premier cer40 tified lender to withdraw from its loss reserve amounts attrib41 utable to any debenture that is repaid. 


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1 (B) TEMPORARY REDUCTION BASED ON OUTSTANDING BAL2 ANCE.— 

3 (i) IN GENERAL.—Notwithstanding subparagraph (A), dur4 ing the 2-year period beginning on August 26, 2004, the Ad5 ministrator shall allow a premier certified lender to withdraw 

6 from its loss reserve such amounts as are in excess of one 

7 percent of the aggregate outstanding balances of debentures 

8 to which the loss reserve relates. 

9 (ii) APPLICABILITY.—Clause (i) does not apply with respect 

10 to a debenture before 100 percent of the contribution de11 scribed in paragraph (4) with respect to the debenture is 

12 made. 

13 (8) ALTERNATIVE LOSS RESERVE.— 

14 (A) DEFINITIONS.—In this paragraph: 

15 (i) CALENDAR QUARTER.—The term ‘‘calendar quarter’’ 

16 means— 

17 (I) the period that begins on January 1 and ends on 

18 March 31 of a year; 

19 (II) the period that begins on April 1 and ends on 

20 June 30 of a year; 

21 (III) the period that begins on July 1 and ends on 

22 September 30 of a year; and 

23 (IV) the period that begins on October 1 and ends on 

24 December 31 of a year. 

25 (ii) ELIGIBLE CALENDAR QUARTER.—The term ‘‘eligible 

26 calendar quarter’’ means— 

27 (I) the first calendar quarter that begins after August 

28 26, 2004; and 

29 (II) each of the 7 succeeding calendar quarters. 

30 (iii) PCLP LOAN.—The term ‘‘PCLP loan’’ means a loan 

31 guaranteed under this section. 

32 (iv) QUALIFIED HIGH LOSS RESERVE PCL.—The term 

33 ‘‘qualified high loss reserve PCL’’ means, with respect to any 

34 calendar year, a premier certified lender that the Adminis35 trator designates as a qualified high loss reserve PCL for that 

36 year under subparagraph (B). 

37 (v) QUALIFIED INDEPENDENT AUDITOR.—The term ‘‘quali38 fied independent auditor’’, with respect to any year, means an 

39 auditor that— 

40 (I) is compensated by a qualified high loss reserve 

41 PCL; 


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1 (II) is independent of the qualified high loss reserve 

2 PCL; and 

3 (III) was approved by the Administrator during the 

4 preceding year. 

5 (vi) SPECIFIED RISK MANAGEMENT BENCHMARK.—The 

6 term ‘‘specified risk management benchmark’’ means the fol7 lowing rates, as determined by the Administrator: 

8 (I) Currency rate. 

9 (II) Delinquency rate. 

10 (III) Default rate. 

11 (IV) Liquidation rate. 

12 (V) Loss rate. 

13 (B) DESIGNATION OF QUALIFIED HIGH LOSS RESERVE PCLs.— 

14 The Administrator may designate a premier certified lender as a 

15 qualified high loss reserve PCL if the Administrator determines 

16 that— 

17 (i) the amount of the loss reserve of the premier certified 

18 lender is not less than $100,000; 

19 (ii) the premier certified lender has established and is using 

20 an appropriate and effective process for analyzing the risk of 

21 loss associated with its portfolio of PCLP loans and for grad22 ing each PCLP loan made by the premier certified lender on 

23 the basis of the risk of loss associated with the loan; and 

24 (iii)(I) the premier certified lender meets or exceeds 4 or 

25 more of the specified risk management benchmarks as of the 

26 most recent assessment by the Administrator; or 

27 (II) the Administrator issues a waiver with respect to the 

28 requirement of subclause (I). 

29 (C) ELECTION.—With respect to any eligible calendar quarter, 

30 a qualified high loss reserve PCL may elect to have the require31 ments of this paragraph apply in lieu of the requirements of para32 graphs (2) and (4) for that eligible calendar quarter. 

33 (D) CONTRIBUTIONS.— 

34 (i) ORDINARY RULES INAPPLICABLE.—Except as provided 

35 under clause (ii) and paragraph (6), a qualified high loss re36 serve PCL that makes the election described in subparagraph 

37 (C) with respect to an eligible calendar quarter shall not be 

38 required to make contributions to its loss reserve during that 

39 eligible calendar quarter. 

40 (ii) CONTRIBUTION BASED ON LOSS.—A qualified high loss 

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1 graph (C) with respect to an eligible calendar quarter shall, 

2 before the last day of that eligible calendar quarter, make 

3 such contributions to its loss reserve as are necessary to en4 sure that the amount of the loss reserve of the qualified high 

5 loss reserve PCL is— 

6 (I) not less than $100,000; and 

7 (II) sufficient, as determined by a qualified inde8 pendent auditor, for the qualified high loss reserve PCL 

9 to meet its obligations to protect the Federal Govern10 ment from risk of loss. 

11 (iii) CERTIFICATION.—Before the end of any eligible cal12 endar quarter for which an election is in effect under sub13 paragraph (C), the head of the qualified high loss reserve 

14 PCL shall submit to the Administrator a certification that 

15 the loss reserve of the qualified high loss reserve PCL is suffi16 cient to meet the qualified high loss reserve PCL’s obligation 

17 to protect the Federal Government from risk of loss. The cer18 tification shall be in such form and submitted in such manner 

19 as the Administrator may require and shall be signed by the 

20 head of the qualified high loss reserve PCL and the auditor 

21 making the determination under clause (ii)(II). 

22 (E) WITHDRAWALS.— 

23 (i) ORDINARY RULE INAPPLICABLE.—Paragraph (7) shall 

24 not apply with respect to any qualified high loss reserve PCL 

25 for any calendar quarter for which an election is in effect 

26 under subparagraph (C). 

27 (ii) EXCESS FUNDS.—At the end of each calendar quarter 

28 for which an election is in effect under subparagraph (C), the 

29 Administrator shall allow the qualified high loss reserve PCL 

30 to withdraw from its loss reserve the excess of the amount of 

31 the loss reserve over the greater of— 

32 (I) $100,000; or 

33 (II) the amount that is determined under subpara34 graph (D)(ii)(II) to be sufficient to meet the PCL’s obli35 gation to protect the Federal Government from risk of 

36 loss. 

37 (F) RECONTRIBUTION.— 

38 (i) IN GENERAL.—If the requirements of this paragraph 

39 apply to a qualified high loss reserve PCL for any eligible cal40 endar quarter and cease to apply to that qualified high loss 

41 reserve PCL for any subsequent eligible calendar quarter, the 


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1 qualified high loss reserve PCL shall make a contribution to 

2 its loss reserve in such amount as the Administrator may de3 termine, subject to clause (ii). 

4 (ii) AMOUNT.—The amount determined under clause (i) 

5 shall not exceed the amount that would result in the total 

6 amount in the loss reserve being equal to the amount that 

7 would have been in the loss reserve had this paragraph never 

8 applied to the qualified high loss reserve PCL. 

9 (iii) FORM.—The Administrator may require that a con10 tribution under clause (i) be made as a single payment or as 

11 a series of payments. 

12 (G) RISK MANAGEMENT.— 

13 (i) IN GENERAL.—If a qualified high loss reserve PCL fails 

14 to meet the requirement of subparagraph (B)(iii) during any 

15 period for which an election is in effect under subparagraph 

16 (C) and the failure continues for 180 days— 

17 (I) the requirements of paragraphs (2), (4), and (7) 

18 shall apply to the qualified high loss reserve PCL as of 

19 the end of that 180-day period; and 

20 (II) the qualified high loss reserve PCL shall make the 

21 contribution to its loss reserve described in subparagraph 

22 (F). 

23 (ii) WAIVER.—The Administrator may waive the require24 ments of clause (i). 

25 (H) REGULATIONS.— 

26 (i) IN GENERAL.—The Administrator shall prescribe regu27 lations to carry out this paragraph. 

28 (ii) CONTENTS.—The regulations shall include provisions 

29 relating to— 

30 (I) the approval of auditors under subparagraph 

31 (A)(v); and 

32 (II) the designation of qualified high loss reserve 

33 PCLs under subparagraph (B), including the determina34 tion of whether a process for analyzing risk of loss is ap35 propriate and effective for purposes of subparagraph 

36 (B)(ii). 

37 (d) SALE OF CERTAIN DEFAULTED LOANS.— 

38 (1) NOTICE.— 

39 (A) IN GENERAL.—If, on default in repayment, the Adminis40 trator acquires a loan guaranteed under this section and identifies 

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1 chased loans or other financings, the Administrator shall give 

2 prior notice of the inclusion of the loan in the bulk asset sale to 

3 any certified development company that has a contingent liability 

4 under this section. 

5 (B) TIMING.—The notice shall be given to the certified develop6 ment company as soon as possible after the financing is identified, 

7 but not less than 90 days before the date on which the Adminis8 trator first makes any records on the financing available for exam9 ination by prospective purchasers prior to its offering in a package 

10 of loans for bulk sale. 

11 (2) LIMITATION.—The Administration shall not offer a loan de12 scribed in paragraph (1) as part of a bulk sale unless the Adminis13 trator— 

14 (A) provides prospective purchasers with the opportunity to ex15 amine the Administrator’s records with respect to the loan; and 

16 (B) provides the notice required by paragraph (1). 

17 (e) LOAN APPROVAL AUTHORITY.— 

18 (1) IN GENERAL.—Notwithstanding section 33103(e)(1) of this title, 

19 and subject to such terms and conditions as the Administrator may es20 tablish, the Administrator may— 

21 (A) permit a premier certified lender to approve, authorize, 

22 close, service, foreclose, litigate (except that the Administrator 

23 may monitor the conduct of any such litigation to which a premier 

24 certified lender is a party), and liquidate loans that are funded 

25 with the proceeds of a debenture issued by the premier certified 

26 lender; and 

27 (B) authorize the guarantee of such a debenture. 

28 (2) SCOPE OF REVIEW.—The approval of a loan by a premier cer29 tified lender shall be subject to final approval as to eligibility of any 

30 guarantee by the Administrator under section 33103 of this title, but 

31 such final approval shall not include review of decisions by the lender 

32 involving creditworthiness, loan closing, or compliance with legal re33 quirements imposed by law (including a regulation). 

34 (f) REVIEW.— 

35 (1) IN GENERAL.—After the issuance and sale of debentures under 

36 this section, the Administrator, at intervals of not greater than 12 

37 months, shall review the financings made by each premier certified 

38 lender. 

39 (2) MATTERS TO BE REVIEWED.—A review shall include a premier 

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1 bility requirements for each financing approved under the premier cer2 tified lenders program. 

3 (3) CONSIDERATION OF FINDINGS.—The Administrator shall con4 sider the findings of the review in carrying out subsection (g), but the 

5 review shall not affect any outstanding debenture guarantee. 

6 (g) SUSPENSION OR REVOCATION.— 

7 (1) IN GENERAL.—The designation of a certified development com8 pany as a premier certified lender may be suspended or revoked if the 

9 Administrator determines that the certified development company— 

10 (A) has not continued to meet the criteria for eligibility under 

11 subsection (b); 

12 (B) has not established or maintained the loss reserve required 

13 under subsection (c); 

14 (C) is failing to adhere to the Administrator’s regulations; or 

15 (D) is violating any other applicable provision of law. 

16 (2) EFFECT OF SUSPENSION OR REVOCATION.—A suspension or rev17 ocation under this subsection shall not affect any outstanding deben18 ture guarantee. 

19 (h) PROGRAM GOALS.—A certified development company that is des20 ignated as a premier certified lender shall establish a goal of processing a 

21 minimum of not less than 50 percent of the loan applications that the cer22 tified development company receives for assistance under the premier cer23 tified lenders program. 

24 § 33109. Foreclosure and liquidation of loans 

25 (a) DELEGATION OF AUTHORITY.—The Administrator shall delegate to a 

26 qualified development company that meets the eligibility requirements of 

27 subsection (b)(1) the authority to foreclose and liquidate, or to otherwise 

28 treat in accordance with this section, defaulted loans in its portfolio that 

29 are funded with the proceeds of guaranteed debentures. 

30 (b) ELIGIBILITY FOR DELEGATION.— 

31 (1) REQUIREMENTS.—A qualified development company shall be eli32 gible for a delegation of authority under subsection (a) if— 

33 (A) the qualified development company— 

34 (i) participated in the loan liquidation pilot program under 

35 section 204 of the Small Business Programs Improvement 

36 Act of 1996 (15 U.S.C. 695 note; 110 Stat. 3009–736), as 

37 in effect on the day before promulgation of final regulations 

38 by the Administrator implementing this section; 

39 (ii) is participating in the premier certified lenders pro40 gram; or 


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1 (iii) during the 3 fiscal years immediately prior to seeking 

2 such a delegation, has made an average of not less than 10 

3 loans per year that are funded with the proceeds of guaran4 teed debentures; and 

5 (B) the qualified development company— 

6 (i) has one or more employees— 

7 (I) who have not less than 2 years of substantive deci8 sionmaking experience in administering the liquidation 

9 and workout of problem loans secured in a manner sub10 stantially similar to loans funded with the proceeds of 

11 guaranteed debentures; and 

12 (II) who have completed a training program on loan 

13 liquidation developed by the Administrator in conjunction 

14 with qualified development companies that meet the re15 quirements of this paragraph; or 

16 (ii) submits to the Administrator documentation dem17 onstrating that the qualified development company has con18 tracted with a qualified third party to perform any liquidation 

19 activities and secures the approval of the contract by the Ad20 ministrator with respect to the qualifications of the contractor 

21 and the terms and conditions of liquidation activities. 

22 (2) CONFIRMATION.— 

23 (A) EXAMINATION.—On request, the Administrator shall exam24 ine the qualifications of a qualified development company de25 scribed in subsection (a) to determine whether the qualified devel26 opment company is eligible for the delegation of authority under 

27 subsection (a). 

28 (B) DETERMINATION OF INELIGIBILITY.—If the Administrator 

29 determines that a qualified development company is not eligible, 

30 the Administrator shall provide the qualified development company 

31 with the reasons for ineligibility. 

32 (c) SCOPE OF DELEGATED AUTHORITY.— 

33 (1) IN GENERAL.—A qualified development company to which the 

34 Administrator delegates authority under subsection (a) may, with re35 spect to any loan described in subsection (a)— 

36 (A) perform all liquidation and foreclosure functions, including 

37 the purchase in accordance with this subsection of any other in38 debtedness secured by the property securing the loan, in a reason39 able and sound manner according to commercially accepted prac40 tices, pursuant to a liquidation plan approved in advance by the 

41 Administrator under paragraph (2)(A); 


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1 (B) litigate any matter relating to the performance of the func2 tions described in subparagraph (A), except that the Adminis3 trator may— 

4 (i) defend or bring any claim if— 

5 (I) the outcome of the litigation may adversely affect 

6 the Administrator’s management of the program; or 

7 (II) the Administrator is entitled to legal remedies not 

8 available to a qualified development company, and those 

9 remedies will benefit the Administrator or the qualified 

10 development company; or 

11 (ii) oversee the conduct of any such litigation; and 

12 (C) take other appropriate actions to mitigate loan losses in lieu 

13 of total liquidation or foreclosures, including the restructuring of 

14 a loan in accordance with prudent loan servicing practices and 

15 pursuant to a workout plan approved in advance by the Adminis16 trator under paragraph (2)(C). 

17 (2) APPROVAL BY THE ADMINISTRATOR.— 

18 (A) LIQUIDATION PLAN.— 

19 (i) SUBMISSION.—Before carrying out functions described 

20 in paragraph (1)(A), a qualified development company shall 

21 submit to the Administrator a proposed liquidation plan. 

22 (ii) ACTION BY THE ADMINISTRATOR ON PROPOSED LIQ23 UIDATION PLAN.— 

24 (I) TIMING.—Not later than 15 business days after a 

25 liquidation plan is received by the Administrator under 

26 clause (i), the Administrator shall approve or reject the 

27 liquidation plan. 

28 (II) NOTICE OF NO DECISION.—With respect to any 

29 liquidation plan that cannot be approved or denied with30 in the 15-day period required by subclause (I), the Ad31 ministrator shall within that period provide in accord32 ance with subparagraph (E) notice to the qualified devel33 opment company that submitted the liquidation plan. 

34 (iii) ROUTINE ACTIONS.—In carrying out functions de35 scribed in paragraph (1)(A), a qualified development company 

36 may undertake routine actions not addressed in a liquidation 

37 plan without obtaining additional approval from the Adminis38 trator. 

39 (B) PURCHASE OF INDEBTEDNESS.— 

40 (i) IN GENERAL.—In carrying out functions described in 

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1 mit to the Administrator a request for written approval before 

2 committing the Administrator to the purchase of any other 

3 indebtedness secured by the property securing a defaulted 

4 loan. 

5 (ii) ACTION BY THE ADMINISTRATOR ON REQUEST.— 

6 (I) TIMING.—Not later than 15 business days after re7 ceiving a request under clause (i), the Administrator 

8 shall approve or deny the request. 

9 (II) NOTICE OF NO DECISION.—With respect to any 

10 request that cannot be approved or denied within the 15- 

11 day period required by subclause (I), the Administrator 

12 shall within that period provide in accordance with sub13 paragraph (E) notice to the qualified development com14 pany that submitted the request. 

15 (C) WORKOUT PLAN.— 

16 (i) IN GENERAL.—In carrying out functions described in 

17 paragraph (1)(C), a qualified development company shall sub18 mit to the Administrator a proposed workout plan. 

19 (ii) ACTION BY THE ADMINISTRATOR ON PROPOSED WORK20 OUT PLAN.— 

21 (I) TIMING.—Not later than 15 business days after a 

22 workout plan is received by the Administrator under 

23 clause (i), the Administrator shall approve or reject the 

24 workout plan. 

25 (II) NOTICE OF NO DECISION.—With respect to any 

26 workout plan that cannot be approved or denied within 

27 the 15-day period required by subclause (I), the Admin28 istrator shall, within that period, provide in accordance 

29 with subparagraph (E) notice to the qualified develop30 ment company that submitted the workout plan. 

31 (D) COMPROMISE OF INDEBTEDNESS.—In carrying out func32 tions described in paragraph (1)(A), a qualified development com33 pany may— 

34 (i) consider an offer made by an obligor to compromise the 

35 debt for less than the full amount owing; and 

36 (ii) pursuant to such an offer, release any obligor or other 

37 party contingently liable, if the qualified development com38 pany secures the written approval of the Administrator. 

39 (E) CONTENTS OF NOTICE OF NO DECISION.—A notice provided 

40 by the Administrator under subparagraph (A)(ii)(II), (B)(ii)(II), 

41 or (C)(ii)(II)— 


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1 (i) shall be in writing; 

2 (ii) shall state the specific reason for the Administrator’s 

3 inability to act on a liquidation plan, request, or workout 

4 plan; 

5 (iii) shall include an estimate of the additional time re6 quired by the Administrator to act on the liquidation plan, re7 quest, or workout plan; and 

8 (iv) if the Administrator cannot act because insufficient in9 formation or documentation was provided by the qualified de10 velopment company that submitted the liquidation plan, re11 quest, or workout plan, shall specify the nature of such addi12 tional information or documentation. 

13 (3) CONFLICT OF INTEREST.—In carrying out functions described in 

14 paragraph (1), a qualified development company shall take no action 

15 that would result in an actual or apparent conflict of interest between 

16 the qualified development company (or any employee of the qualified 

17 development company) and any third party lender, associate of a third 

18 party lender, or any other person participating in a liquidation, fore19 closure, or loss mitigation action. 

20 (d) SUSPENSION OR REVOCATION OF AUTHORITY.—The Administrator 

21 may revoke or suspend a delegation of authority under this section to a 

22 qualified development company if the Administration determines that the 

23 qualified development company— 

24 (1) does not meet the requirements of subsection (b)(1); 

25 (2) has violated any applicable regulation of the Administrator or 

26 any other applicable law; or 

27 (3) fails to comply with any reporting requirement that may be es28 tablished by the Administrator relating to the carrying out of functions 

29 described in this section. 

30 Subtitle IV—Miscellaneous 

31 CHAPTER 401—PRIME PROGRAM 

Sec. 

40101. Definitions. 

40102. Establishment of program. 

40103. Uses of assistance. 

40104. Allocation of assistance; subgrants. 

40105. Matching requirement. 

40106. Applications for assistance. 

40107. Recordkeeping. 

40108. Implementation. 

40109. Authorization of appropriations. 

32 § 40101. Definitions 

33 In this chapter: 

34 (1) CAPACITY BUILDING SERVICE.—The term ‘‘capacity building 

35 service’’ means a service provided to an organization that is, or that 


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1 is in the process of becoming, a microenterprise development organiza2 tion or program, for the purpose of enhancing its ability to provide 

3 training and services to disadvantaged entrepreneurs. 

4 (2) COLLABORATIVE.—The term ‘‘collaborative’’ means 2 or more 

5 nonprofit entities that agree to act jointly as a qualified organization 

6 under the program. 

7 (3) DISADVANTAGED ENTREPRENEUR.—The term ‘‘disadvantaged 

8 entrepreneur’’ means a microentrepreneur that is— 

9 (A) a low-income person; 

10 (B) a very low-income person; or 

11 (C) an entrepreneur that lacks adequate access to capital or 

12 other resources essential for business success, or is economically 

13 disadvantaged, as determined by the Administrator. 

14 (4) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the meaning given 

15 the term in section 103 of the Community Development Banking and 

16 Financial Institutions Act of 1994 (12 U.S.C. 4702). 

17 (5) INTERMEDIARY.—The term ‘‘intermediary’’ means a private, 

18 nonprofit entity that seeks to serve qualified organizations. 

19 (6) LOW-INCOME PERSON.—The term ‘‘low-income person’’ has the 

20 meaning given the term in section 103 of the Community Development 

21 Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702). 

22 (7) MICROENTERPRISE.—The term ‘‘microenterprise’’ means a sole 

23 proprietorship, partnership, or corporation that— 

24 (A) has fewer than 5 employees; and 

25 (B) generally lacks access to conventional loans, equity, or other 

26 banking services. 

27 (8) MICROENTERPRISE DEVELOPMENT ORGANIZATION OR PRO28 GRAM.—The term ‘‘microenterprise development organization or pro29 gram’’ means a nonprofit entity (including a community development 

30 corporation or other nonprofit development organization or a social 

31 service organization), or a program administered by such an entity, 

32 that provides services to disadvantaged entrepreneurs. 

33 (9) MICROENTREPRENEUR.—The term ‘‘microentrepreneur’’ means 

34 the owner or developer of a microenterprise. 

35 (10) PROGRAM.—The term ‘‘program’’ means the PRIME program. 

36 (11) QUALIFIED ORGANIZATION.—The term ‘‘qualified organization’’ 

37 means— 

38 (A) a nonprofit microenterprise development organization or 

39 program (or a group or collaborative thereof) that has a dem40 onstrated record of delivering microenterprise services to disadvan41 taged entrepreneurs; 


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1 (B) an intermediary; 

2 (C) a microenterprise development organization or program that 

3 is accountable to a local community, working in conjunction with 

4 a State or local government or Indian tribe; or 

5 (D) an Indian tribe acting on its own, if the Indian tribe cer6 tifies that no private organization or program referred to in this 

7 paragraph exists within its jurisdiction. 

8 (12) TRAINING AND TECHNICAL ASSISTANCE.—The term ‘‘training 

9 and technical assistance’’ means service and support provided to a dis10 advantaged entrepreneur, such as assistance for the purpose of enhanc11 ing business planning, marketing, management, financial management 

12 skills, and assistance for the purpose of accessing financial services. 

13 (13) VERY LOW-INCOME PERSON.—The term ‘‘very low-income per14 son’’ means a person having an income, adjusted for family size, of not 

15 more than 150 percent of the poverty line (as defined in section 673 

16 of the Community Services Block Grant Act (42 U.S.C. 9902), includ17 ing any revision required by that section). 

18 § 40102. Establishment of program 

19 The Administrator shall establish a microenterprise technical assistance 

20 and capacity building grant program, to be known as the program for in21 vestment in microenterprise or the PRIME program, to provide assistance 

22 in the form of grants to qualified organizations in accordance with this 

23 chapter. 

24 § 40103. Uses of assistance 

25 A qualified organization shall use a grant made under the program— 

26 (1) to provide training and technical assistance to disadvantaged en27 trepreneurs; 

28 (2) to provide training and capacity building services to microenter29 prise development organizations and programs and groups of such or30 ganizations to assist the organizations and programs in developing mi31 croenterprise training and services; 

32 (3) to aid in researching and developing the best practices in the 

33 field of microenterprise and technical assistance programs for disadvan34 taged entrepreneurs; and 

35 (4) for such other activities as the Administrator determines are con36 sistent with the purposes of the program. 

37 § 40104. Allocation of assistance; subgrants 

38 (a) ALLOCATION OF ASSISTANCE.— 

39 (1) IN GENERAL.—The Administrator shall allocate assistance under 

40 the program to ensure that— 


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1 (A) activities described in section 40103(1) of this title are 

2 funded using not less than 75 percent of amounts made available 

3 for such assistance; and 

4 (B) activities described in section 40103(2) of this title are 

5 funded using not less than 15 percent of amounts made available 

6 for such assistance. 

7 (2) LIMIT ON INDIVIDUAL ASSISTANCE.—No single person may re8 ceive more than 10 percent of the total funds appropriated for the pro9 gram in a single fiscal year. 

10 (b) TARGETED ASSISTANCE.—The Administrator shall ensure that not 

11 less than 50 percent of the grants made under the program are used to ben12 efit very low-income persons, including those residing on Indian reserva13 tions. 

14 (c) SUBGRANTS.— 

15 (1) IN GENERAL.—A qualified organization receiving assistance 

16 under the program may provide grants using that assistance to quali17 fied small and emerging microenterprise organizations and programs, 

18 subject to such regulations as the Administrator determines to be ap19 propriate. 

20 (2) LIMIT ON ADMINISTRATIVE EXPENSES.—Not more than 7.5 per21 cent of the amount of assistance received by a qualified organization 

22 under the program may be used for administrative expenses in connec23 tion with the making of subgrants under paragraph (1). 

24 (d) DIVERSITY.—In making grants under the program, the Administrator 

25 shall ensure that grant recipients include both large and small microenter26 prise organizations, serving urban, rural, and Indian tribal communities 

27 with diverse populations. 

28 (e) PROHIBITION OF PREFERENTIAL CONSIDERATION OF CERTAIN SBA 

29 PROGRAM PARTICIPANTS.—In making grants under the program, the Ad30 ministrator shall ensure that any application made by a qualified organiza31 tion that is a participant in the microloan program does not receive pref32 erential consideration over applications from other qualified organizations 

33 that are not participants in the microloan program. 

34 § 40105. Matching requirement 

35 (a) IN GENERAL.—Financial assistance under the program shall be 

36 matched with funds from sources other than the Federal Government in the 

37 amount of not less than 50 cents for each dollar provided by the Adminis38 tration. 

39 (b) SOURCES OF MATCHING FUNDS.—Fees, grants, gifts, funds from 

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1 vate sources may be used to comply with the matching requirement under 

2 subsection (a). 

3 (c) EXCEPTION.— 

4 (1) IN GENERAL.—In the case of an applicant for assistance under 

5 the program with severe constraints on available sources of matching 

6 funds, the Administrator may reduce or eliminate the matching re7 quirement under subsection (a). 

8 (2) LIMITATION.—Not more than 10 percent of the total funds made 

9 available to carry out the program for any fiscal year may be excepted 

10 under paragraph (1) from the matching requirement under subsection 

11 (a). 

12 § 40106. Applications for assistance 

13 An application for assistance under the program shall be submitted in 

14 such form and in accordance with such procedures as the Administrator 

15 shall establish. 

16 § 40107. Recordkeeping 

17 The requirements of section 115 of the Community Development Banking 

18 and Financial Institutions Act of 1994 (12 U.S.C. 4714) shall apply to a 

19 qualified organization receiving assistance from the Administrator under the 

20 program as if the qualified organization were a community development fi21 nancial institution receiving assistance from the Fund under subtitle A of 

22 that Act (12 U.S.C. 4701 et seq.). 

23 § 40108. Implementation 

24 The Administrator shall by regulation establish such requirements as are 

25 necessary to carry out this chapter. 

26 § 40109. Authorization of appropriations 

27 There are authorized to be appropriated to the Administrator to carry out 

28 this chapter— 

29 (1) $15,000,000 for fiscal year 2000; 

30 (2) $15,000,000 for fiscal year 2001; 

31 (3) $15,000,000 for fiscal year 2002; and 

32 (4) $15,000,000 for fiscal year 2003. 

33 CHAPTER 403—WOMEN’S BUSINESS ENTERPRISE 

34 DEVELOPMENT 

Sec. 

40301. Definitions. 

40302. Establishment of the Interagency Committee. 

40303. Duties of the Interagency Committee. 

40304. Membership of the Interagency Committee. 

40305. Reports from the Interagency Committee. 

40306. Establishment of the National Women’s Business Council. 

40307. Duties of the Council. 

40308. Membership and staff of the Council. 

40309. Studies and other research. 

40310. Authorization of appropriations. 


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1 § 40301. Definitions 

2 In this chapter: 

3 (1) CONTROL.—The term ‘‘control’’ means to exercise the power to 

4 make policy decisions concerning a business. 

5 (2) COUNCIL.—The term ‘‘Council’’ means the National Women’s 

6 Business Council established under section 40306 of this title. 

7 (3) INTERAGENCY COMMITTEE.—The term ‘‘Interagency Committee’’ 

8 means the Interagency Committee on Women’s Business Enterprise es9 tablished under section 40302 of this title. 

10 (4) OPERATE.—The term ‘‘operate’’ means to be actively involved in 

11 the day-to-day management of a business. 

12 (5) WOMEN’S BUSINESS ENTERPRISE.—The term ‘‘women’s business 

13 enterprise’’ means— 

14 (A) a business or businesses owned by a woman or a group of 

15 women; or 

16 (B) the establishment, maintenance, or development of a busi17 ness or businesses by a woman or a group of women. 

18 (6) WOMEN-OWNED BUSINESS.—The term ‘‘women-owned business’’ 

19 means a small business— 

20 (A) that a woman or a group of women controls and operates; 

21 and 

22 (B) of which not less than 51 percent is owned by a woman or 

23 a group of women. 

24 § 40302. Establishment of the Interagency Committee 

25 There is established an interagency committee to be known as the Inter26 agency Committee on Women’s Business Enterprise. 

27 § 40303. Duties of the Interagency Committee 

28 (a) IN GENERAL.—The Interagency Committee shall— 

29 (1) monitor, coordinate, and promote the plans, programs, and oper30 ations of the Federal agencies that may contribute to the establishment 

31 and growth of women’s business enterprises; 

32 (2) develop and promote new public sector initiatives, policies, pro33 grams, and plans designed to foster women’s business enterprises; 

34 (3) review, monitor, and coordinate plans and programs, developed 

35 in the public sector, that affect the ability of women-owned businesses 

36 to obtain capital and credit; and 

37 (4) promote and assist, as appropriate, in the development of surveys 

38 of women-owned businesses. 

39 (b) MEETINGS.— 


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1 (1) IN GENERAL.—The Interagency Committee shall meet not less 

2 than biannually at such times as the Interagency Committee deter3 mines to be necessary to perform the duties under subsection (a). 

4 (2) QUORUM.—A majority of the members of the Interagency Com5 mittee shall constitute a quorum for the approval of recommendations 

6 or reports issued under this section. 

7 (c) INTERACTION WITH COUNCIL.— 

8 (1) CONSULTATION.—In performing its duties under subsection (a), 

9 the Interagency Committee shall consult with the Council. 

10 (2) JOINT MEETINGS.—The Interagency Committee— 

11 (A) shall meet jointly with the Council not less frequently than 

12 biannually; and 

13 (B) may meet jointly with the Council more frequently at the 

14 discretion of the chairperson of the Interagency Committee and 

15 the chairperson of the Council. 

16 (3) CHAIRPERSON.—The chairperson of the Interagency Committee 

17 shall serve as chairperson of any joint meeting of the Interagency Com18 mittee and the Council. 

19 § 40304. Membership of the Interagency Committee 

20 (a) IN GENERAL.— 

21 (1) PARTICIPANTS.—The Interagency Committee shall be composed 

22 of one representative from each of the following: 

23 (A) The Department of Commerce. 

24 (B) The Department of Defense. 

25 (C) The Department of Health and Human Services. 

26 (D) The Department of Labor. 

27 (E) The Administration. 

28 (F) The Department of Transportation. 

29 (G) The Department of the Treasury. 

30 (H) The General Services Administration. 

31 (I) The Board of Governors of the Federal Reserve. 

32 (J) The Executive staff of the President engaged in policy33 making activities. 

34 (2) APPOINTMENTS.— 

35 (A) IN GENERAL.—Except as provided in subparagraph (B), the 

36 head of each entity listed in paragraph (1) shall designate a rep37 resentative who— 

38 (i) shall be a policymaking official within the entity; and 

39 (ii) shall report directly to the head of the entity on the 

40 status of the activities of the Interagency Committee. 


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1 (B) SMALL BUSINESS ADMINISTRATION.—With respect to the 

2 Administration, the representative shall be the Assistant Adminis3 trator of the Office of Women’s Business Ownership, who shall— 

4 (i) serve as the vice chairperson of the Interagency Com5 mittee; 

6 (ii) report directly to the Administrator on the status of the 

7 activities on the Interagency Committee; and 

8 (iii) serve as the Interagency Committee Liaison to the 

9 Council. 

10 (3) OTHER PARTICIPATION.—Representatives of the Federal Govern11 ment not listed in paragraph (1) may participate in the meetings and 

12 functions of the Interagency Committee on a temporary basis as needed 

13 to carry out specific Interagency Committee goals. 

14 (b) APPOINTMENT OF CHAIRPERSON.—The President, in consultation 

15 with the Administrator, shall appoint one of the members of the Interagency 

16 Committee to serve as chairperson. 

17 (c) NONCOMPENSATION.—A member of the Interagency Committee shall 

18 serve without additional pay for such membership. 

19 (d) DETAIL OF FEDERAL EMPLOYEES.—On request by the chairperson 

20 of the Interagency Committee, the head of any Federal agency may detail 

21 any of the personnel of the Federal agency to assist the Interagency Com22 mittee in carrying out its duties under this chapter without regard to sec23 tion 3341 of title 5. 

24 § 40305. Reports from the Interagency Committee 

25 The Interagency Committee, through the Administrator, shall annually 

26 submit to the President, the Committee on Small Business and Entrepre27 neurship of the Senate, and the Committee on Small Business of the House 

28 of Representatives a report that contains— 

29 (1) a detailed description of the activities of the Interagency Com30 mittee, including a verbatim report on the status of progress of the 

31 Interagency Committee in meeting its responsibilities and duties under 

32 section 40303(a) of this title; 

33 (2) the findings and conclusions of the Interagency Committee; and 

34 (3) the Interagency Committee’s recommendations for such legisla35 tion and administrative actions as the Interagency Committee considers 

36 appropriate to promote the development of small business concerns 

37 owned and controlled by women. 


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1 § 40306. Establishment of the National Women’s Business 

2 Council 

3 There is established a council to be known as the National Women’s 

4 Business Council, which shall serve as an independent source of advice and 

5 policy recommendations to— 

6 (1) the Interagency Committee; 

7 (2) the Administrator (through the Assistant Administrator of the 

8 Office of Women’s Business Ownership); 

9 (3) Congress; and 

10 (4) the President. 

11 § 40307. Duties of the Council 

12 (a) IN GENERAL.—The Council shall advise and consult with the Inter13 agency Committee on matters relating to the activities, functions, and poli14 cies of the Interagency Committee, as provided in this chapter. 

15 (b) MEETINGS.— 

16 (1) IN GENERAL.—The Council— 

17 (A) shall meet jointly with the Interagency Committee as pro18 vided in section 40303(c) of this title; and 

19 (B) shall meet separately at such times as the Council considers 

20 necessary. 

21 (2) QUORUM.—A majority of the members of the Council shall con22 stitute a quorum for the approval of recommendations or reports issued 

23 under this section. 

24 (c) RECOMMENDATIONS AND REPORTS.—The Council shall— 

25 (1) make annual recommendations for consideration by the Inter26 agency Committee; and 

27 (2) provide reports and make such other recommendations as the 

28 Council considers appropriate to— 

29 (A) the Interagency Committee; 

30 (B) the President; 

31 (C) the Administrator (through the Assistant Administrator of 

32 the Office of Women’s Business Ownership); and 

33 (D) the Committee on Small Business and Entrepreneurship of 

34 the Senate and the Committee on Small Business of the House 

35 of Representatives. 

36 (d) OTHER DUTIES.—The Council shall— 

37 (1) review, coordinate, and monitor plans and programs developed in 

38 the public and private sectors that affect the ability of women-owned 

39 business enterprises to obtain capital and credit; 

40 (2) promote and assist in the development of a women’s business 

41 census and other surveys of women-owned businesses; 


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1 (3) monitor and promote the plans, programs, and operations of 

2 Federal agencies that may contribute to the establishment and growth 

3 of women’s business enterprise; 

4 (4) develop and promote new initiatives, policies, programs, and 

5 plans designed to foster women’s business enterprises; 

6 (5) advise and consult with the Interagency Committee in the design 

7 of a comprehensive plan for a joint public-private sector effort to facili8 tate growth and development of women’s business enterprises; and 

9 (6) not later than 90 days after the last day of each fiscal year, sub10 mit to the President, the Committee on Small Business and Entrepre11 neurship of the Senate, and the Committee on Small Business of the 

12 House of Representatives, a report that contains— 

13 (A) a detailed description of the activities of the Council, includ14 ing a status report on the Council’s progress toward meeting its 

15 duties under this subsection and subsection (a); 

16 (B) the findings, conclusions, and recommendations of the 

17 Council; and 

18 (C) the Council’s recommendations for such legislation and ad19 ministrative actions as the Council considers appropriate to pro20 mote the development of small business concerns owned and con21 trolled by women. 

22 (e) FORM OF INFORMATION.—The information described in subpara23 graphs (A) to (C) of subsection (d)(6) shall be reported in a report under 

24 subsection (d) verbatim, with any separate additional, concurring, or dis25 senting views of the Administrator. 

26 § 40308. Membership and staff of the Council 

27 (a) CHAIRPERSON.— 

28 (1) IN GENERAL.—The President shall appoint an individual to 

29 serve as chairperson of the Council, in consultation with the Adminis30 trator. 

31 (2) QUALIFICATIONS.—The chairperson of the Council shall be a 

32 prominent business woman who is qualified to head the Council by vir33 tue of her education, training, and experience. 

34 (b) OTHER MEMBERS.—The Administrator shall, after receiving the rec35 ommendations of the Chairman and the Ranking Member of the Committee 

36 on Small Business and Entrepreneurship of the Senate and the Committee 

37 on Small Business of the House of Representatives, appoint, in consultation 

38 with the chairperson of the Council, 14 members of the Council, of whom— 

39 (1) 4 shall be— 

40 (A) owners of small business concerns; and 

41 (B) members of the same political party as the President; 


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1 (2) 4 shall— 

2 (A) be owners of small business concerns; and 

3 (B) not be members of the same political party as the Presi4 dent; and 

5 (3) 6 shall be representatives of women’s business organizations, in6 cluding representatives of women’s business center sites. 

7 (c) DIVERSITY.—In appointing members of the Council, the Adminis8 trator shall, to the extent possible, ensure that the members appointed re9 flect geographic (including both urban and rural areas), racial, economic, 

10 and public-private sectoral diversity. 

11 (d) TERMS.—A member of the Council shall be appointed for a term of 

12 3 years. 

13 (e) OTHER FEDERAL SERVICE.—If, after appointment to the Council, a 

14 member of the Council becomes an officer or employee of the Federal Gov15 ernment, the member may continue as a member of the Council for not 

16 longer than the 30-day period beginning on the date on which the member 

17 becomes such an officer or employee. 

18 (f) VACANCIES.— 

19 (1) IN GENERAL.—A vacancy on the Council shall be filled not later 

20 than 30 days after the date on which the vacancy occurs, in the man21 ner in which the original appointment was made, and shall be subject 

22 to any conditions that applied to the original appointment. 

23 (2) UNEXPIRED TERM.—An individual chosen to fill a vacancy shall 

24 be appointed for the unexpired term of the member replaced. 

25 (g) REIMBURSEMENTS.—A member of the Council shall serve without pay 

26 for such membership, except that a member shall be entitled to reimburse27 ment for travel, subsistence, and other necessary expenses incurred by the 

28 member in carrying out the functions of the Council, in the same manner 

29 as a person serving on an advisory committee under section 10315 of this 

30 title. 

31 (h) EXECUTIVE DIRECTOR AND ADDITIONAL EMPLOYEES.— 

32 (1) EXECUTIVE DIRECTOR.—The Administrator, in consultation with 

33 the chairperson of the Council, shall appoint an executive director of 

34 the Council. 

35 (2) ADDITIONAL EMPLOYEES.—On recommendation by the executive 

36 director, the chairperson of the Council may appoint and fix the pay 

37 of 4 additional employees of the Council, at a rate of pay not to exceed 

38 the maximum rate of pay payable for a position at GS–15 of the Gen39 eral Schedule. 

40 (3) APPROPRIATIONS.—An appointment under paragraph (1) or (2) 

41 shall be subject to the appropriation of funds. 


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1 (i) RATES OF PAY.—The executive director and staff of the Council may 

2 be appointed without regard to the provisions of title 5 governing appoint3 ments in the competitive service, and except as provided in subsection (e), 

4 may be paid without regard to the provisions of chapter 51 and subchapter 

5 III of chapter 53 of that title relating to classification and General Schedule 

6 pay rates, except that the executive director may not receive pay in excess 

7 of the annual rate of basic pay payable for a position at ES–3 of the Senior 

8 Executive Pay Schedule under section 5382 of title 5. 

9 § 40309. Studies and other research 

10 (a) IN GENERAL.—The Council may conduct such studies and other re11 search relating to the award of Federal prime contracts and subcontracts 

12 to women-owned businesses, to access to credit and investment capital by 

13 women entrepreneurs, or to other issues relating to women-owned busi14 nesses, as the Council determines to be appropriate. 

15 (b) CONTRACT AUTHORITY.—In conducting any study or other research 

16 under this section, the Council may contract with one or more public or pri17 vate entities. 

18 § 40310. Authorization of appropriations 

19 (a) IN GENERAL.—There is authorized to be appropriated to carry out 

20 this chapter $1,000,000 for each of fiscal years 2001 through 2003, of 

21 which $550,000 shall be available in each such fiscal year to carry out sec22 tion 40309 of this title. 

23 (b) BUDGET REVIEW.—No amount made available under this section for 

24 any fiscal year may be obligated or expended by the Council before the date 

25 on which the Council reviews and approves the operating budget of the 

26 Council to carry out the responsibilities of the Council for that fiscal year. 

27 CHAPTER 451—MISCELLANEOUS 

Sec. 

45101. Small business economic policy. 

45102. Small Business Manufacturing Task Force. 

45103. Test program for negotiation of comprehensive small business subcontracting plans. 

45104. Coordination of Federal assistance for small business concerns adversely affected by 

NAFTA. 

45105. Disaster aid to major sources of employment. 

45106. Background check policy; fingerprinting. 

45107. Expedited resolution of contract dispute matters. 

45108. Small Business Procurement Advisory Council. 

45109. Small business energy efficiency. 

45110. Information regarding, and marketing of, programs for veterans and reservists. 

45111. Outreach regarding health insurance options available to children. 

28 § 45101. Small business economic policy 

29 (a) DECLARATION OF SMALL BUSINESS POLICY.— 

30 (1) PRESERVATION AND PROMOTION OF COMPETITIVE FREE ENTER31 PRISE SYSTEM.—For the purpose of preserving and promoting a com32 petitive free enterprise economic system, Congress declares that it is 

33 the continuing policy and responsibility of the Federal Government to 


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1 use all practical means and to take such actions as are necessary, con2 sistent with its needs and obligations and other essential considerations 

3 of national policy, to implement and coordinate all Federal agency poli4 cies, programs, and activities to— 

5 (A) foster the economic interests of small businesses; 

6 (B) ensure the existence of a competitive economic climate con7 ducive to the development, growth, and expansion of small busi8 nesses; 

9 (C) establish incentives to ensure that adequate capital and 

10 other resources at competitive prices are available to small busi11 nesses; 

12 (D) reduce the concentration of economic resources and expand 

13 competition; and 

14 (E) provide an opportunity for entrepreneurship, inventiveness, 

15 and the creation and growth of small businesses. 

16 (2) AVAILABILITY OF ADEQUATE CAPITAL TO SMALL BUSINESSES.— 

17 Congress declares that the Federal Government is committed to a pol18 icy of utilizing all reasonable means, consistent with the overall eco19 nomic policy goals of the Nation and the preservation of the competi20 tive free enterprise system of the Nation, to establish private sector in21 centives that will help ensure that adequate capital at competitive 

22 prices is available to small businesses. 

23 (b) PROMOTION OF INVESTMENT.—To fulfill the policy stated in sub24 section (a), each Federal agency shall use all reasonable means to coordi25 nate, create, and sustain policies and programs that promote investment in 

26 small businesses, including the investments that expand employment oppor27 tunities and foster the effective and efficient use of human and natural re28 sources in the national economy. 

29 (c) REPORT ON SMALL BUSINESS AND COMPETITION.— 

30 (1) IN GENERAL.—Not later than January 20 of each year, the 

31 President shall submit to the Committee on Small Business and Entre32 preneurship of the Senate and the Committee on Small Business of the 

33 House of Representatives a report on small business and competition. 

34 (2) CONTENTS.—A report under paragraph (1) shall— 

35 (A) examine the current role of small business in the economy 

36 on an industry-by-industry basis; 

37 (B) present current and historical data on production, employ38 ment, investment, population, job creation and retention, annual 

39 business failures, annual business startups, and other economic 

40 variables for small business in the economy as a whole and for 

41 small business in each sector of the economy, with, to the extent 


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1 practicable, specific statistics divided as to urban, suburban, and 

2 rural areas; 

3 (C) identify economic trends that may affect the small business 

4 sector and the state of competition; 

5 (D)(i) examine the effects on small business and competition of 

6 policies, programs, and activities, including— 

7 (I) the Internal Revenue Code of 1986 (26 U.S.C. 1 et 

8 seq.); 

9 (II) the Employee Retirement Income Security Act of 1974 

10 (29 U.S.C. 1001 et seq.); 

11 (III) the Securities Act of 1933 (15 U.S.C. 77a et seq.); 

12 and 

13 (IV) the Securities Exchange Act of 1934 (15 U.S.C. 78a 

14 et seq.); 

15 (ii) identify problems generated by such policies, programs, and 

16 activities; and 

17 (iii) recommend legislative and administrative solutions to such 

18 problems; 

19 (E) recommend a program for carrying out the policy declared 

20 in subsection (a), including such recommendations for legislation 

21 as the President considers necessary or desirable; and 

22 (F) include an appendix that discloses, for each Federal agen23 cy— 

24 (i) the total dollar value of all Federal contracts (including 

25 subcontracts) exceeding $10,000 in amount; and 

26 (ii) the dollar amount of those contracts awarded to— 

27 (I) small businesses; 

28 (II) minority-owned businesses; 

29 (III) female-owned businesses; and 

30 (IV) veteran-owned businesses. 

31 (3) DETAILING OF INFORMATION.—The information required to be 

32 contained in the report under paragraph (1) shall separately detail the 

33 portions of the information that are relevant to— 

34 (A) small business concerns owned and controlled by socially 

35 and economically disadvantaged individuals, by gender; 

36 (B) small business concerns owned and controlled by women; 

37 (C) qualified HUBZone small business concerns; and 

38 (D) small business concerns owned and controlled by veterans 

39 and small business concerns owned and controlled by service-dis40 abled veterans. 


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1 (4) SUPPLEMENTARY REPORTS.—The President may from time to 

2 time submit to the Committee on Small Business and Entrepreneurship 

3 of the Senate and the Committee on Small Business of the House of 

4 Representatives reports supplementary to a report under paragraph (1) 

5 that includes such supplementary or revised recommendations as the 

6 President considers necessary or desirable to achieve the policy declared 

7 in subsection (a). 

8 § 45102. Small Business Manufacturing Task Force 

9 (a) ESTABLISHMENT.—The Administrator shall establish a Small Busi10 ness Manufacturing Task Force (referred to in this section as the ‘‘Task 

11 Force’’) to address the concerns of small manufacturers. 

12 (b) CHAIR.—The Administrator shall assign a member of the Task Force 

13 to serve as chair of the Task Force. 

14 (c) DUTIES.—The Task Force shall— 

15 (1) evaluate and identify whether programs and services are suffi16 cient to serve the needs of small manufacturers; 

17 (2) actively promote the programs and services of the Administration 

18 that serve small manufacturers; and 

19 (3) identify and study the unique conditions facing small manufac20 turers and develop and propose policy initiatives to support and assist 

21 small manufacturers. 

22 (d) MEETINGS.— 

23 (1) FREQUENCY.—The Task Force shall meet not less than 4 times 

24 a year, and more frequently if necessary to perform its duties. 

25 (2) QUORUM.—A majority of the members of the Task Force shall 

26 constitute a quorum to approve recommendations or reports. 

27 (e) PERSONNEL MATTERS.— 

28 (1) COMPENSATION OF MEMBERS.—A member of the Task Force 

29 shall serve without compensation in addition to that received for serv30 ices rendered as an officer or employee of the United States. 

31 (2) DETAIL OF SBA EMPLOYEES.—Any employee of the Administra32 tion may be detailed to the Task Force without reimbursement and 

33 without interruption or loss of civil service status or privilege. 

34 (f) REPORT.—The Task Force shall annually submit a report containing 

35 the findings and recommendations of the Task Force to— 

36 (1) the President; 

37 (2) the Committee on Small Business and Entrepreneurship of the 

38 Senate; and 

39 (3) the Committee on Small Business of the House of Representa40 tives. 


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1 § 45103. Test program for negotiation of comprehensive 

2 small business subcontracting plans 

3 (a) TEST PROGRAM.— 

4 (1) IN GENERAL.—The Secretary of Defense shall establish a test 

5 program under which contracting activities in the military departments 

6 and the defense agencies are authorized to undertake one or more dem7 onstration projects to determine whether the negotiation and adminis8 tration of comprehensive subcontracting plans will reduce administra9 tive burdens on contractors while enhancing opportunities provided 

10 under Department of Defense contracts for small business concerns 

11 and small business concerns owned and controlled by socially and eco12 nomically disadvantaged individuals. 

13 (2) BROAD RANGE OF SUPPLIES AND SERVICES.—In selecting the 

14 contracting activities to undertake demonstration projects, the Sec15 retary of Defense shall take such action as is necessary to ensure that 

16 a broad range of the supplies and services acquired by the Department 

17 of Defense are included in the test program. 

18 (3) CONSULTATION; PUBLIC COMMENT.—In developing the test pro19 gram, the Secretary of Defense shall— 

20 (A) consult with the Administrator; and 

21 (B) provide an opportunity for public comment on the test pro22 gram. 

23 (b) COMPREHENSIVE SMALL BUSINESS SUBCONTRACTING PLAN.— 

24 (1) IN GENERAL.—In a demonstration project under the test pro25 gram, the Secretary of a military department or head of a defense 

26 agency shall negotiate, monitor, and enforce compliance with a com27 prehensive subcontracting plan with a Department of Defense con28 tractor described in paragraph (3). 

29 (2) SCOPE.—The comprehensive subcontracting plan of a con30 tractor— 

31 (A) shall apply to the entire business organization of the con32 tractor or to one or more of the contractor’s divisions or operating 

33 elements, as specified in the subcontracting plan; and 

34 (B) shall cover each Department of Defense contract that is en35 tered into by the contractor and each subcontract that is entered 

36 into by the contractor as the subcontractor under a Department 

37 of Defense contract. 

38 (3) DEPARTMENT OF DEFENSE CONTRACTOR.—A Department of 

39 Defense contractor referred to in paragraph (1) is, with respect to a 

40 comprehensive subcontracting plan negotiated in any fiscal year, a 

41 business concern that, during the immediately preceding fiscal year, 


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1 furnished the Department of Defense with goods or services (including 

2 professional services, research and development services, and construc3 tion services) under at least 3 Department of Defense contracts having 

4 an aggregate value of at least $5,000,000. 

5 (c) WAIVER OF CERTAIN SUBCONTRACTING PLAN REQUIREMENTS.—A 

6 Department of Defense contractor is not required to negotiate or submit a 

7 subcontracting plan under section 24302(a) or 24303(c) of this title with 

8 respect to a Department of Defense contract if— 

9 (1) the contractor has negotiated a comprehensive subcontracting 

10 plan under the test program that includes the matters specified in sec11 tion 24303(d) of this title; 

12 (2) such matters have been determined to be acceptable by the Sec13 retary of the military department or head of a Defense Agency negoti14 ating the comprehensive subcontracting plan; and 

15 (3) the comprehensive subcontracting plan applies to the contract. 

16 (d) FAILURE TO MAKE A GOOD FAITH EFFORT TO COMPLY WITH A

17 COMPANY-WIDE SUBCONTRACTING PLAN.—A contractor that has nego18 tiated a comprehensive subcontracting plan under the test program shall be 

19 subject to section 24305 of this title regarding the assessment of liquidated 

20 damages for failure to make a good faith effort to comply with its company21 wide plan and the goals specified in the plan. 

22 (e) TERMINATION.—The test program shall terminate on September 30, 

23 2010. 

24 § 45104. Coordination of Federal assistance for small busi25 ness concerns adversely affected by NAFTA 

26 The Administrator shall coordinate Federal assistance to provide coun27 seling to small business concerns adversely affected by the North American 

28 Free Trade Agreement. 

29 § 45105. Disaster aid to major sources of employment 

30 (a) IN GENERAL.—The Administrator may provide any nonagricultural 

31 enterprise that has constituted a major source of employment in an area 

32 suffering a major disaster and that is no longer in substantial operation as 

33 a result of the disaster a loan in such amount as is necessary to enable the 

34 enterprise to resume operations in order to assist in restoring the economic 

35 viability of the disaster area. 

36 (b) LOAN AMOUNT.—A loan under this section shall be made without re37 gard to any limitation on the amount of a loan that may otherwise be im38 posed by any other provision of law (including a regulation). 

39 (c) ADDITIONAL ASSISTANCE.—Assistance under this section shall be in 

40 addition to any other Federal disaster assistance, except that such other asVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00423 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 sistance may be adjusted or modified to the extent that the Under Secretary 

2 of Emergency Preparedness and Response considers appropriate. 

3 (d) INTEREST.—A loan made under this section shall bear interest at a 

4 rate determined by the Secretary of the Treasury, taking into consideration 

5 the current average market yield on outstanding marketable obligations of 

6 the United States with remaining periods to maturity of 10 to 12 years, 

7 reduced by not to exceed 2 percent per year. In no event shall a loan made 

8 under this section bear interest at a rate in excess of 6 percent per year. 

9 (e) DEFERRAL OF PAYMENT OF PRINCIPAL AND INTEREST.—The Presi10 dent, if the President considers it necessary, may defer payments of prin11 cipal and interest on a loan under this section for a period not to exceed 

12 3 years after the date of the loan. Any such deferred payments shall bear 

13 interest at the rate determined under subsection (d). 

14 § 45106. Background check policy; fingerprinting 

15 The Administrator shall not require fingerprints to be obtained for back16 ground check purposes from any participant in any Administration program 

17 who is serving on a voluntary basis and without compensation unless the 

18 Administrator has reasonable grounds to believe that the participant’s 

19 record or background is such as to make the participant ineligible to partici20 pate in the program. 

21 § 45107. Expedited resolution of contract dispute matters 

22 (a) REQUIRED FAR PROVISION.—The Federal Acquisition Regulation 

23 shall include provisions that require a contracting officer— 

24 (1) to make every reasonable effort to respond in writing within 30 

25 days to any written request made to a contracting officer with respect 

26 to a matter relating to the administration of a contract that is received 

27 from a small business concern; and 

28 (2) if the contracting officer is unable to reply within the 30-day pe29 riod, to transmit to the contractor within that period a written notifica30 tion of a specific date by which the contracting officer expects to re31 spond. 

32 (b) APPLICABILITY.—The provision required under subsection (a) shall 

33 not apply to a request for a contracting officer’s decision under the Contract 

34 Disputes Act of 1978 (41 U.S.C. 601 et seq.). 

35 (c) EFFECT OF SECTION.—This section does not create any right under 

36 the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.). 

37 § 45108. Small Business Procurement Advisory Council 

38 (a) ESTABLISHMENT.—There is established an interagency council to be 

39 known as the Small Business Procurement Advisory Council (referred to in 

40 this section as the ‘‘Council’’). 

41 (b) DUTIES.—The duties of the Council are— 


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1 (1) to develop positions on proposed procurement regulations affect2 ing the small business community; and 

3 (2) to submit comments reflecting such positions to appropriate reg4 ulatory authorities. 

5 (c) MEMBERSHIP.—The Council shall be composed of the following mem6 bers: 

7 (1) The Administrator (or the designee of the Administrator). 

8 (2) The Director of the Minority Business Development Agency. 

9 (3) The head of each office of small and disadvantaged business uti10 lization established under section 25109 of this title for each procuring 

11 agency. 

12 (d) CHAIRMAN.—The Council shall be chaired by the Administrator. 

13 (e) MEETINGS.—The Council shall meet at the call of the chairman as 

14 necessary to consider proposed procurement regulations affecting the small 

15 business community. 

16 (f) CONSIDERATION OF COUNCIL COMMENTS.—The Federal Acquisition 

17 Regulatory Council and other appropriate regulatory authorities shall con18 sider comments submitted in a timely manner under subsection (b)(2). 

19 § 45109. Small business energy efficiency 

20 (a) DEFINITIONS.—In this section: 

21 (1) DISABILITY.—The term ‘‘disability’’ has the meaning given the 

22 term in section 3 of the Americans with Disabilities Act of 1990 (42 

23 U.S.C. 12102). 

24 (2) EFFICIENCY PROGRAM.—the term ‘‘efficiency program’’ means 

25 the small business energy efficiency program established under sub26 section (c). 

27 (3) ELECTRIC UTILITY.—The term ‘‘electric utility’’ has the meaning 

28 given the term in section 3 of the Public Utility Regulatory Policies 

29 Act of 1978 (16 U.S.C. 2602). 

30 (4) GOVERNMENTWIDE PROGRAM.—The term ‘‘Governmentwide pro31 gram’’ means the program established under subsection (b). 

32 (5) HIGH-PERFORMANCE GREEN BUILDING.—The term ‘‘high-per33 formance green building’’ has the meaning given the term in section 

34 401 of the Energy Independence and Security Act of 2007 (42 U.S.C. 

35 17061). 

36 (6) ON-BILL FINANCING.—The term ‘‘on-bill financing’’ means a low 

37 interest or no interest financing agreement between a small business 

38 concern and an electric utility for the purchase or installation of equip39 ment under which— 


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1 (A) the regularly scheduled payment of the small business con2 cern to the electric utility is not reduced by the amount of the re3 duction in cost attributable to the new equipment; and 

4 (B) that amount is credited to the electric utility until the cost 

5 of the purchase or installation is repaid. 

6 (7) TELECOMMUTING.—The term ‘‘telecommuting’’ means the use of 

7 telecommunications to perform work functions under circumstances 

8 that reduce or eliminate the need to commute. 

9 (8) TELECOMMUTING PILOT PROGRAM.—The term ‘‘telecommuting 

10 pilot program’’ means the pilot program established under subsection 

11 (d). 

12 (b) GOVERNMENTWIDE PROGRAM.— 

13 (1) IN GENERAL.—The Administrator shall promulgate final rules 

14 establishing the Governmentwide program authorized under subsection 

15 (d) of section 337 of the Energy Policy and Conservation Act (42 

16 U.S.C. 6307) that ensure compliance with that subsection. 

17 (2) ASSISTANCE.—The Administrator shall develop and coordinate a 

18 Governmentwide program, building on the Energy Star for Small Busi19 ness program, to assist small business concerns in— 

20 (A) becoming more energy efficient; 

21 (B) understanding the cost savings from improved energy effi22 ciency; and 

23 (C) identifying financing options for energy efficiency upgrades. 

24 (3) CONSULTATION AND COOPERATION.—The Governmentwide pro25 gram shall be developed and coordinated— 

26 (A) in consultation with the Secretary of Energy and the Ad27 ministrator of the Environmental Protection Agency; and 

28 (B) in cooperation with any entities that the Administrator con29 siders appropriate, such as industry trade associations, industry 

30 members, and energy efficiency organizations. 

31 (4) AVAILABILITY OF INFORMATION.—The Administrator shall make 

32 available the information and materials developed under the Govern33 mentwide program to— 

34 (A) small business concerns, including smaller design, engineer35 ing, and construction firms; and 

36 (B) other Federal programs for energy efficiency, such as the 

37 Energy Star for Small Business program. 

38 (5) STRATEGY AND REPORT.— 

39 (A) STRATEGY REQUIRED.—The Administrator shall develop a 

40 strategy to educate, encourage, and assist small business concerns 

41 in adopting energy efficient building fixtures and equipment. 


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1 (B) REPORT.—Not later than December 31, 2008, the Adminis2 trator shall submit to Congress a report containing a plan to im3 plement the strategy developed under subparagraph (A). 

4 (c) EFFICIENCY PROGRAM.— 

5 (1) AUTHORITY.—The Administrator shall establish a small business 

6 energy efficiency program to provide energy efficiency assistance to 

7 small business concerns through small business development centers. 

8 (2) SMALL BUSINESS DEVELOPMENT CENTERS.— 

9 (A) IN GENERAL.—In carrying out the efficiency program, the 

10 Administrator shall enter into agreements with small business de11 velopment centers under which small business development centers 

12 shall— 

13 (i) provide access to information and resources on energy 

14 efficiency practices, including on-bill financing options; 

15 (ii) conduct training and educational activities; 

16 (iii) offer confidential, free, one-on-one, in-depth energy au17 dits to owners and operators of small business concerns re18 garding energy efficiency practices; 

19 (iv) give referrals to certified professionals and other pro20 viders of energy efficiency assistance that meet such stand21 ards for educational, technical, and professional competency 

22 as the Administrator shall establish; 

23 (v) to the extent not inconsistent with controlling State 

24 public utility regulations, act as a facilitator between small 

25 business concerns, electric utilities, lenders, and the Adminis26 trator to facilitate on-bill financing arrangements; 

27 (vi) provide necessary support to small business concerns 

28 to— 

29 (I) evaluate energy efficiency opportunities and oppor30 tunities to design or construct high-performance green 

31 buildings; 

32 (II) evaluate renewable energy sources, such as the 

33 use of solar and small wind energy to supplement power 

34 consumption; 

35 (III) secure financing to achieve energy efficiency or 

36 to design or construct high-performance green buildings; 

37 and 

38 (IV) implement energy efficiency projects; 

39 (vii) assist owners and operators of small business concerns 

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1 newable energy sources, dramatically reduce the use of nat2 ural resources, and cut or eliminate greenhouse gas emissions 

3 through— 

4 (I) technology assessment; 

5 (II) intellectual property; 

6 (III) small business innovation research submissions 

7 under division H of subtitle II; 

8 (IV) strategic alliances; 

9 (V) business model development; and 

10 (VI) preparation for investors; and 

11 (viii) help small business concerns improve environmental 

12 performance by shifting to less hazardous materials and re13 ducing waste and emissions, including by providing assistance 

14 for small business concerns to adapt the materials they use, 

15 the processes they operate, and the products and services they 

16 produce. 

17 (B) REPORTS.—A small business development center partici18 pating in the efficiency program shall submit to the Administrator 

19 and the Administrator of the Environmental Protection Agency an 

20 annual report that includes— 

21 (i) a summary of the energy efficiency assistance provided 

22 by the small business development center under the efficiency 

23 program; 

24 (ii) the number of small business concerns assisted by the 

25 small business development center under the efficiency pro26 gram; 

27 (iii) statistics on the total amount of energy saved as a re28 sult of assistance provided by that center under the efficiency 

29 program; and 

30 (iv) any additional information that the Administrator, in 

31 consultation with the Association, determines to be necessary. 

32 (C) REPORTS TO CONGRESS.—Not later than 60 days after the 

33 date on which all reports under subparagraph (B) relating to a 

34 year are submitted, the Administrator shall submit to the Com35 mittee on Small Business and Entrepreneurship of the Senate and 

36 the Committee on Small Business of the House of Representatives 

37 a report summarizing the information regarding the efficiency pro38 gram submitted by small business development centers partici39 pating in the efficiency program. 


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1 (3) ELIGIBILITY.—A small business development center shall be eli2 gible to participate in the efficiency program only if the small business 

3 development center is accredited under section 27111(b) of this title. 

4 (4) SELECTION OF PARTICIPATING STATE PROGRAMS.—From among 

5 small business development centers submitting applications to partici6 pate in the efficiency program, the Administrator— 

7 (A) shall, to the maximum extent practicable, select small busi8 ness development centers in such a manner as to promote a na9 tionwide distribution of small business development centers partici10 pating in the efficiency program; and 

11 (B) may not select more than one small business development 

12 center in a State to participate in the efficiency program. 

13 (5) MATCHING REQUIREMENT.—Section 27102(g)(1) of this title 

14 shall apply to assistance made available under the efficiency program. 

15 (6) GRANT AMOUNTS.—A small business development center selected 

16 to participate in the efficiency program under paragraph (4) shall be 

17 eligible to receive a grant in an amount equal to not less than 

18 $100,000 nor more than $300,000 in each fiscal year. 

19 (7) EVALUATION AND REPORT.—The Comptroller General shall— 

20 (A) not later than 30 months after the date of disbursement of 

21 the first grant under the efficiency program, initiate an evaluation 

22 of the efficiency program; and 

23 (B) not later than 6 months after the date of the initiation of 

24 the evaluation under subparagraph (A), submit to the Adminis25 trator, the Committee on Small Business and Entrepreneurship of 

26 the Senate, and the Committee on Small Business of the House 

27 of Representatives a report containing— 

28 (i) the results of the evaluation; and 

29 (ii) any recommendations regarding whether the efficiency 

30 program, with or without modification, should be extended to 

31 include the participation of all small business development 

32 centers. 

33 (8) GUARANTEE.—To the extent not inconsistent with State law, the 

34 Administrator may guarantee the timely payment of a loan made to a 

35 small business concern through an on-bill financing agreement on such 

36 terms and conditions as the Administrator shall establish through a 

37 formal rulemaking, after providing notice and an opportunity for com38 ment. 

39 (9) IMPLEMENTATION.—Subject to amounts approved in advance in 

40 appropriations Acts and separate from amounts approved to carry out 


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1 section 27102(a) of this title, the Administrator may make grants or 

2 enter into cooperative agreements to carry out this subsection. 

3 (10) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

4 be appropriated such sums as are necessary to make grants and enter 

5 into cooperative agreements to carry out this subsection. 

6 (11) TERMINATION.—The authority under this subsection shall ter7 minate 4 years after the date of disbursement of the first grant under 

8 the efficiency program. 

9 (d) TELECOMMUTING PILOT PROGRAM.— 

10 (1) IN GENERAL.—The Administrator shall conduct, in not more 

11 than 5 regions of the Administration, a pilot program to provide infor12 mation regarding telecommuting to small business concerns and to en13 courage small business concerns to offer telecommuting options to their 

14 employees. 

15 (2) SPECIAL OUTREACH TO INDIVIDUALS WITH DISABILITIES.—In 

16 carrying out the telecommuting pilot program, the Administrator shall 

17 make a concerted effort to provide information to— 

18 (A) small business concerns owned by or employing individuals 

19 with disabilities, particularly veterans who are individuals with dis20 abilities; 

21 (B) Federal, State, and local agencies having knowledge and ex22 pertise in assisting individuals with disabilities, including veterans 

23 who are individuals with disabilities; and 

24 (C) any group or organization the primary purpose of which is 

25 to aid individuals with disabilities or veterans who are individuals 

26 with disabilities. 

27 (3) PERMISSIBLE ACTIVITIES.—In carrying out the telecommuting 

28 pilot program, the Administrator may— 

29 (A) produce educational materials and conduct presentations de30 signed to raise awareness in the small business community of the 

31 benefits and the ease of telecommuting; 

32 (B)(i) conduct outreach to small business concerns that are con33 sidering offering telecommuting options; and 

34 (ii) conduct outreach as provided in paragraph (2); and 

35 (C) acquire telecommuting technologies and equipment to be 

36 used for demonstration purposes. 

37 (4) SELECTION OF REGIONS.—In determining which regions will par38 ticipate in the telecommuting pilot program, the Administrator shall 

39 give priority consideration to regions in which Federal agencies and 

40 private-sector employers have demonstrated a strong regional commit41 ment to telecommuting. 


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1 (5) REPORT.—Not later than 2 years after the date on which funds 

2 are first appropriated to carry out this subsection, the Administrator 

3 shall submit to the Committee on Small Business and Entrepreneur4 ship of the Senate and the Committee on Small Business of the House 

5 of Representatives a report containing the results of an evaluation of 

6 the telecommuting pilot program and any recommendations regarding 

7 whether the pilot program, with or without modification, should be ex8 tended to include the participation of all regions of the Administration. 

9 (6) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

10 be appropriated to the Administration $5,000,000 to carry out this 

11 subsection. 

12 (7) TERMINATION.—The telecommuting pilot program shall termi13 nate 4 years after the date on which funds are first appropriated to 

14 carry out this subsection. 

15 § 45110. Information regarding, and marketing of, programs 

16 for veterans and reservists 

17 (a) IN GENERAL.—The Administrator and the Secretary of Defense shall 

18 develop a joint website and printed materials providing information regard19 ing any program for small business concerns that is available to veterans 

20 or reservists. 

21 (b) MARKETING.—The Administrator may— 

22 (1) advertise and promote the program under section 21303 of this 

23 title jointly with the Secretary of Defense and veterans’ service organi24 zations; and 

25 (2) advertise and promote participation by lenders in the program 

26 jointly with trade associations for banks or other lending institutions. 

27 § 45111. Outreach regarding health insurance options avail28 able to children 

29 (a) DEFINITIONS.—In this section: 

30 (1) MEDICAID PROGRAM.—The term ‘‘Medicaid program’’ means the 

31 program established under title XIX of the Social Security Act (42 

32 U.S.C. 1396 et seq.). 

33 (2) STATE.—The term ‘‘State’’ has the meaning given the term for 

34 purposes of title XXI of the Social Security Act (42 U.S.C. 1397aa et 

35 seq.). 

36 (3) STATE CHILDREN’S HEALTH INSURANCE PROGRAM.—The term 

37 ‘‘State children’s health insurance program’’ means the State children’s 

38 health insurance program established under title XXI of the Social Se39 curity Act (42 U.S.C. 1397aa et seq.). 

40 (4) TASK FORCE.—The term ‘‘task force’’ means the task force es41 tablished under subsection (b)(1). 


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1 (b) ESTABLISHMENT OF TASK FORCE.— 

2 (1) ESTABLISHMENT.—There is established a task force to conduct 

3 a nationwide campaign of education and outreach for small business 

4 concerns regarding the availability of coverage for children through pri5 vate insurance options, the Medicaid program, and the State children’s 

6 health insurance program. 

7 (2) MEMBERSHIP.—The task force shall consist of the Adminis8 trator, the Secretary of Health and Human Services, the Secretary of 

9 Labor, and the Secretary of the Treasury. 

10 (3) RESPONSIBILITIES.—The campaign conducted under this sub11 section shall include— 

12 (A) efforts to educate the owners of small business concerns 

13 about the value of health coverage for children; 

14 (B) information regarding options available to the owners and 

15 employees of small business concerns to make insurance more af16 fordable, including Federal and State tax deductions and credits 

17 for health care-related expenses and health insurance expenses and 

18 Federal tax exclusion for health insurance options available under 

19 employer-sponsored cafeteria plans under section 125 of the Inter20 nal Revenue Code of 1986 (26 U.S.C. 125); 

21 (C) efforts to educate the owners of small business concerns 

22 about assistance available through public programs; and 

23 (D) efforts to educate the owners and employees of small busi24 ness concerns regarding the availability of the hotline operated as 

25 part of the Insure Kids Now program of the Department of 

26 Health and Human Services. 

27 (4) IMPLEMENTATION.—In carrying out this subsection, the task 

28 force may— 

29 (A) use any business partner of the Administration, including— 

30 (i) a small business development center; 

31 (ii) a certified development company; 

32 (iii) a women’s business center; and 

33 (iv) SCORE; 

34 (B) enter into— 

35 (i) a memorandum of understanding with a chamber of 

36 commerce; and 

37 (ii) a partnership with any appropriate small business con38 cern or health advocacy group; and 

39 (C) designate outreach programs at regional offices of the De40 partment of Health and Human Services to work with district of41 fices of the Administration. 


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1 (5) WEBSITE.—The Administrator shall ensure that links to infor2 mation on the eligibility and enrollment requirements for the Medicaid 

3 program and State children’s health insurance program of each State 

4 are prominently displayed on the website of the Administration. 

5 (6) REPORT.— 

6 (A) IN GENERAL.—Not later than February 4, 2011, and every 

7 2 years thereafter, the Administrator shall submit to the Com8 mittee on Small Business and Entrepreneurship of the Senate and 

9 the Committee on Small Business of the House of Representatives 

10 a report on the status of the nationwide campaign conducted 

11 under paragraph (1). 

12 (B) CONTENTS.—A report under subparagraph (A) shall in13 clude a status update on all efforts made to educate owners and 

14 employees of small business concerns on options for providing 

15 health insurance for children through public and private alter16 natives. 

17 SEC. 4. CONFORMING AMENDMENTS TO POSITIVE LAW PROVISIONS 

18 OF THE UNITED STATES CODE. 

19 (a) TITLE 5.—Title 5, United States Code, is amended— 

20 (1) in section 601(3), by striking ‘‘section 3 of the Small Business 

21 Act’’ and inserting ‘‘section 10101 of title 53’’; and 

22 (2) in section 3703(e)(2)(A), by striking ‘‘section 3(a)(2) of the 

23 Small Business Act’’ and inserting ‘‘section 10101 of title 53’’. 

24 (b) TITLE 10.—Title 10, United States Code, is amended— 

25 (1) in section 144— 

26 (A) in subsection (b), by striking ‘‘section 15(k) of the Small 

27 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘section 25109 

28 of title 53’’; and 

29 (B) in subsection (c)(2), by striking ‘‘Section 15(k) of the Small 

30 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘Section 25109 

31 of title 53’’; 

32 (2) in section 2225(f)— 

33 (A) in paragraph (3), by striking ‘‘section 3(a) of the Small 

34 Business Act (15 U.S.C. 632(a))’’ and inserting ‘‘section 10101 

35 of title 53’’; 

36 (B) in paragraph (4), by striking ‘‘section 8(d)(3)(C) of the 

37 Small Business Act (15 U.S.C. 637(d)(3)(C))’’ and inserting ‘‘sec38 tion 10101 of title 53’’; and 

39 (C) in paragraph (5), by striking ‘‘section 8(d)(3)(D) of the 

40 Small Business Act (15 U.S.C. 637(d)(3)(D))’’ and inserting ‘‘sec41 tion 10101 of title 53’’; 


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1 (3) in section 2302(2)— 

2 (A) in subparagraph (D), by striking ‘‘section 15 of the Small 

3 Business Act (15 U.S.C. 644)’’ and inserting ‘‘chapter 251 of title 

4 53,’’; and 

5 (B) in subparagraph (E), by striking ‘‘section 9 of the Small 

6 Business Act (15 U.S.C. 638)’’ and inserting ‘‘chapters 261 and 

7 263 of title 53’’; 

8 (4) in section 2304— 

9 (A) in subsection (b)(2), by striking ‘‘sections 9 and 15 of the 

10 Small Business Act (15 U.S.C. 638, 644)’’ and inserting ‘‘chap11 ters 251, 261, and 263 of title 53’’; and 

12 (B) in subsection (f)(2)(D)(ii), by striking ‘‘section 8(a) of the 

13 Small Business Act (15 U.S.C. 637(a))’’ and inserting ‘‘chapters 

14 231 to 235 of title 53’’; 

15 (5) in subsections (c) and (f)(3) of section 2304b, by striking ‘‘sec16 tion 8(e) of the Small Business Act (15 U.S.C. 637(e))’’ and inserting 

17 ‘‘section 24501 of title 53’’; 

18 (6) in section 2304c(a)(1), by striking ‘‘section 8(e) of the Small 

19 Business Act (15 U.S.C. 637(e))’’ and inserting ‘‘section 24501 of title 

20 53’’; 

21 (7) in section 2304e(b)(1), by striking ‘‘section 8 or 15 of the Small 

22 Business Act (15 U.S.C. 637 or 644)’’ and inserting ‘‘chapter 231, 

23 233, 235, 241, 243, 245, 247, 251, or 257 of title 53’’; 

24 (8) in section 2319— 

25 (A) in subsection (c)(4), by striking ‘‘section 8(b)(7) of the 

26 Small Business Act (15 U.S.C. 637(b)(7))’’ and inserting ‘‘section 

27 24108 of title 53’’; and 

28 (B) in subsection (d)(2), by striking ‘‘section 3 of the Small 

29 Business Act (15 U.S.C. 632)’’ and inserting ‘‘section 10101 of 

30 title 53’’; 

31 (9) in section 2320(a)(2)— 

32 (A) in subparagraph (A), by striking ‘‘section 9(j)(2) of the 

33 Small Business Act (15 U.S.C. 638(j)(2))’’ and inserting ‘‘para34 graph (2)(E), (8), (9), (10), (11), (12), (13), or (14) of subsection 

35 (b) of section 26304 of title 53’’; and 

36 (B) in subparagraph (E)(i)— 

37 (i) by striking ‘‘(15 U.S.C. 638 note)’’; and 

38 (ii) by striking ‘‘(15 U.S.C. 631)’’; 

39 (10) in section 2323— 

40 (A) in subsection (a)— 

41 (i) in paragraph (1)(A)— 


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1 (I) by striking ‘‘section 8(d) of the Small Business Act 

2 (15 U.S.C. 637(d))’’ and inserting ‘‘chapter 221 of title 

3 53,’’; and 

4 (II) by striking ‘‘section 3(p) of the Small Business 

5 Act’’ and inserting ‘‘section 10101 of title 53’’; and 

6 (ii) in paragraph (3), by striking ‘‘section 8(d)(4)(B) of the 

7 Small Business Act (15 U.S.C. 637(d)(4)(B))’’ and inserting 

8 ‘‘section 24303(b) of title 53’’; 

9 (B) in subsection (e)— 

10 (i) in the first sentence of paragraph (3)(A), by striking 

11 ‘‘section 8(a) of the Small Business Act’’ and inserting 

12 ‘‘chapters 231 to 235 of title 53’’; and 

13 (ii) in paragraph (5)— 

14 (I) in subparagraph (C)— 

15 (aa) in clause (ii), by striking ‘‘section 8(a) of the 

16 Small Business Act (15 U.S.C. 637(a))’’ and insert17 ing ‘‘chapters 231 to 235 of title 53’’; and 

18 (bb) in clause (iii), by striking ‘‘section 15(a) of 

19 the Small Business Act (15 U.S.C. 644(a))’’ and in20 serting ‘‘section 25101 of title 53’’; 

21 (II) in subparagraph (E), by striking ‘‘under section 

22 8(a) of the Small Business Act (15 U.S.C. 637(a)) and 

23 under the small business set-aside program established 

24 under section 15(a) of the Small Business Act (15 

25 U.S.C. 644(a))’’ and inserting ‘‘under chapters 231 to 

26 235 of title 53 and under the small business set-aside 

27 program established under section 25101 of title 53’’; 

28 and 

29 (III) in subparagraph (F), by striking ‘‘section 8(a) of 

30 the Small Business Act (15 U.S.C. 637(a))’’ and insert31 ing ‘‘chapters 231 to 235 of title 53’’; 

32 (C) in subsection (f)— 

33 (i) in paragraph (1), by striking ‘‘section 3(p) of the Small 

34 Business Act’’ and inserting ‘‘section 10101 of title 53’’; and 

35 (ii) in paragraph (2), by striking ‘‘section 15(o)(1) of the 

36 Small Business Act (15 U.S.C. 644(o)(1))’’ and inserting 

37 ‘‘section 25113 of title 53’’; and 

38 (D) in subsection (h), by striking ‘‘section 8(d) of the Small 

39 Business Act (15 U.S.C. 637(d))’’ each place it appears and in40 serting ‘‘chapter 243 of title 53’’; 


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1 (11) in section 2323a, in the matter preceding paragraph (1), by 

2 striking ‘‘section 8(d) of the Small Business Act (15 U.S.C. 637(d))’’ 

3 and inserting ‘‘chapter 243 of title 53’’; 

4 (12) in section 2382(c)(4), by striking ‘‘section 3(a) of the Small 

5 Business Act (15 U.S.C. 632(a))’’ and inserting ‘‘section 10101 of title 

6 53’’; 

7 (13) in section 2410d(b)(1), by striking ‘‘section 8(d) of the Small 

8 Business Act (15 U.S.C. 637(d))’’ and inserting ‘‘chapter 243 of title 

9 53’’; 

10 (14) in section 2500, by striking paragraphs (11) and (12) and in11 serting the following: 

12 ‘‘(11) The term ‘Small Business Innovation Research Program’ 

13 means the program established under section 10710(a), paragraphs (4) 

14 to (6) of section 26102, sections 26301 to 26304, section 26310, and 

15 section 26341 of title 53. 

16 ‘‘(12) The term ‘Small Business Technology Transfer Program’ 

17 means the program established under section 10710(a), paragraphs (4) 

18 to (6) of section 26102, and sections 26321 to 26323 of title 53.’’; 

19 (15) in section 2855(b)— 

20 (A) in paragraph (1)(B), by striking ‘‘the Small Business Act 

21 (15 U.S.C. 631 et seq.)’’ and inserting ‘‘subtitle II of title 53’’; 

22 and 

23 (B) in paragraph (3), by striking ‘‘section 8(a) of the Small 

24 Business Act (15 U.S.C. 637(a))’’ and inserting ‘‘chapters 231 to 

25 235 of title 53’’; 

26 (16) in section 3024— 

27 (A) in subsection (b), by striking ‘‘section 15(k) of the Small 

28 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘section 25109 

29 of title 53’’; and 

30 (B) in subsection (c)(2), by striking ‘‘Section 15(k) of the Small 

31 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘Section 25109 

32 of title 53’’; 

33 (17) in section 5028— 

34 (A) in subsection (b), by striking ‘‘section 15(k) of the Small 

35 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘section 25109 

36 of title 53’’; and 

37 (B) in subsection (c)(2), by striking ‘‘Section 15(k) of the Small 

38 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘Section 25109 

39 of title 53’’; and 

40 (18) in section 8024— 


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1 (A) in subsection (b), by striking ‘‘section 15(k) of the Small 

2 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘section 25109 

3 of title 53’’; and 

4 (B) in subsection (c)(2), by striking ‘‘Section 15(k) of the Small 

5 Business Act (15 U.S.C. 644(k))’’ and inserting ‘‘Section 25109 

6 of title 53’’. 

7 (c) TITLE 11.—Title 11, United States Code, is amended— 

8 (1) in section 109(b)(2), by striking ‘‘a New Markets Venture Cap9 ital company as defined in section 351 of the Small Business Invest10 ment Act of 1958, a small business investment company licensed by the 

11 Small Business Administration under subsection (c) or (d) of section 

12 301 of the Small Business Investment Act of 1958’’ and inserting ‘‘a 

13 new markets venture capital company (as defined in section 30501 of 

14 title 53), a small business investment company (as defined in section 

15 30501 of title 53)’’; and 

16 (2) in section 1102(a)(4), by striking ‘‘section 3(a)(1) of the Small 

17 Business Act’’ and inserting ‘‘subparagraphs (A) and (B) of section 

18 10101(70) of title 53’’. 

19 (d) TITLE 13.—Title 13, United States Code, is amended in section 

20 91(d)(4)(A) by striking ‘‘section 3(a) of the Small Business Act’’ and insert21 ing ‘‘section 10101 of title 53’’. 

22 (e) TITLE 14.—Title 14, United States Code, is amended— 

23 (1) in section 681(a), by striking ‘‘section 8(a) of the Small Business 

24 Act (15 U.S.C. 637(a))’’ and inserting ‘‘chapters 231 to 235 of title 

25 53’’; and 

26 (2) in section 687(g)(3), by striking ‘‘section 8(a) of the Small Busi27 ness Act (15 U.S.C. 637(a))’’ and inserting ‘‘chapters 231 to 235 of 

28 title 53’’. 

29 (f) TITLE 18.—Title 18, United States Code, is amended— 

30 (1) in section 20(5), by striking ‘‘section 103 of the Small Business 

31 Investment Act of 1958 (15 U.S.C. 662)’’ and inserting ‘‘section 30101 

32 of title 53’’; and 

33 (2) in section 1014, by striking ‘‘section 103 of the Small Business 

34 Investment Act of 1958 (15 U.S.C. 662)’’ and inserting ‘‘section 30101 

35 of title 53’’. 

36 (g) TITLE 23.—Title 23, United States Code, is amended in section 

37 505(b)(3) by striking ‘‘section 9 of the Small Business Act (15 U.S.C. 

38 638)’’ and inserting ‘‘chapters 261 and 263 of title 53’’. 

39 (h) TITLE 31.—Title 31, United States Code, is amended— 


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1 (1) in section 3554(c)(2), by striking ‘‘(within the meaning of section 

2 3(a) of the Small Business Act)’’ and inserting ‘‘(as defined in section 

3 10101 of title 53)’’; 

4 (2) in section 3718(b)— 

5 (A) in paragraph (1)(B), by striking ‘‘(as defined in section 3(p) 

6 of the Small Business Act)’’ and inserting ‘‘(as defined in section 

7 10101 of title 53)’’; and 

8 (B) by striking paragraph (3) and inserting the following: 

9 ‘‘(3) Each agency shall use its best efforts to assure that not less 

10 than 10 percent of the amounts of all claims referred to private counsel 

11 by that agency under paragraph (2) are referred to law firms owned 

12 and controlled by socially and economically disadvantaged individuals 

13 and law firms that are qualified HUBZone small business concerns. 

14 For purposes of this paragraph— 

15 ‘‘(A) the term ‘law firm owned and controlled by socially and 

16 economically disadvantaged individuals’ means a law firm that 

17 meets the requirements set forth in clauses (i) and (ii) of section 

18 10101(72)(A) of title 53 and regulations issued under those 

19 clauses; 

20 ‘‘(B) ‘socially and economically disadvantaged individuals’ shall 

21 be presumed to include the groups and individuals described in 

22 subclause (1)(B) of the contract clause described in section 

23 24301(c) of title 53; and 

24 ‘‘(C) the term ‘qualified HUBZone small business concern’ has 

25 the meaning given the term in section 10101 of title 53.’’; and 

26 (3) in section 6701(f)(3)— 

27 (A) in subparagraph (A), by striking ‘‘section 3 of the Small 

28 Business Act’’ and inserting ‘‘section 10101 of title 53’’; 

29 (B) in subparagraph (B), by striking ‘‘has the meaning such 

30 term has under section 8(d) of the Small Business Act and rel31 evant subcontracting regulations promulgated pursuant to that 

32 section’’ and inserting ‘‘has the meaning that the term has for 

33 purposes of chapter 243 of title 53 (including relevant regulations 

34 promulgated under that chapter)’’; and 

35 (C) in subparagraph (C), by striking ‘‘section 3(p) of the Small 

36 Business Act (15 U.S.C. 632(o))’’ and inserting ‘‘section 10101 of 

37 title 53’’. 

38 (i) TITLE 35.—Title 35, United States Code, is amended— 

39 (1) in section 41(h)(1), by striking ‘‘as defined under section 3 of 

40 the Small Business Act’’ and inserting ‘‘(as defined in section 10101 

41 of title 53)’’; and 


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1 (2) in section 201(h), by striking ‘‘as defined at section 2 of Public 

2 Law 85–536 (15 U.S.C. 632)’’ and inserting ‘‘as defined in section 

3 10101 of title 53’’. 

4 (j) TITLE 38.—Title 38, United States Code, is amended— 

5 (1) in section 3117(b)(1), by striking ‘‘section 8 of the Small Busi6 ness Act (15 U.S.C. 633(b))’’ and inserting ‘‘section 10321(o) of title 

7 53’’; 

8 (2) in section 3452— 

9 (A) in the third sentence of subsection (b), by striking ‘‘section 

10 7(i)(1) of the Small Business Act (15 U.S.C. 636(i)(1))’’ and in11 serting ‘‘section 20504 of title 53’’; 

12 (B) in subsection (h)— 

13 (i) in paragraph (1), by striking ‘‘section 21 of the Small 

14 Business Act (15 U.S.C. 648)’’ and inserting ‘‘chapter 271 

15 of title 53’’; and 

16 (ii) in paragraph (2), by striking ‘‘section 33 of the Small 

17 Business Act (15 U.S.C. 657c))’’ and inserting ‘‘section 

18 27514 of title 53’’; and 

19 (C) in paragraphs (1) and (2) of section 3742(d), by striking 

20 ‘‘the Small Business Act (15 U.S.C. 631 et seq.)’’ and inserting 

21 ‘‘subtitle II of title 53’’; and 

22 (3) in section 3675(c)(2), by striking ‘‘(as defined pursuant to sec23 tion 3(a) of the Small Business Act (15 U.S.C. 632(a)))’’ and inserting 

24 ‘‘(as defined in section 10101 of title 53)’’. 

25 (k) TITLE 39.—Section 3641(h) of title 39, United States Code, is 

26 amended by striking ‘‘section 3 of the Small Business Act’’ and inserting 

27 ‘‘section 10101 of title 53’’. 

28 (l) TITLE 44.—Title 44, United States Code, is amended— 

29 (1) in subsections (c)(4) and (i)(1) of section 3506, by striking ‘‘sec30 tion 3 of the Small Business Act (15 U.S.C. 632)’’ and inserting ‘‘sec31 tion 10101 of title 53’’; and 

32 (2) in section 3520— 

33 (A) in subsections (c)(2) and (h), by striking ‘‘section 3 of the 

34 Small Business Act (15 U.S.C. 632)’’ and inserting ‘‘section 

35 10101 of title 53’’; and 

36 (B) in subsections (e)(3) and (f)(3), by striking ‘‘section 30(b) 

37 of the Small Business Act (15 U.S.C. 657(b))’’ and inserting ‘‘sec38 tion 10312(b) of title 53’’. 

39 (m) TITLE 46.—Section 54101(h)(1) of title 46, United States Code, is 

40 amended by striking ‘‘(within the meaning of section 3 of the Small BusiVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00439 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 ness Act (15 U.S.C. 632))’’ and inserting ‘‘(as defined in section 10101 of 

2 title 53)’’. 

3 (n) TITLE 49.—Title 49, United States Code, is amended— 

4 (1) in section 13709(h)(1)(A), by striking ‘‘small-business concern 

5 under the Small Business Act (15 U.S.C. 631 et seq.)’’ and inserting 

6 ‘‘small business concern under subtitles I and II of title 53’’; 

7 (2) in section 40110(d)(2)(D), by striking ‘‘The Small Business Act 

8 (15 U.S.C. 631 et seq.)’’ and inserting ‘‘Subtitles I and II of title 53’’; 

9 (3) in section 46301(i), by striking ‘‘section 3 of the Small Business 

10 Act (15 U.S.C. 632)’’ and inserting ‘‘section 10101 of title 53’’; 

11 (4) in paragraphs (2), (4)(B), and (6) of section 47107(e), by strik12 ing ‘‘(as defined in section 3(p) of the Small Business Act)’’ and insert13 ing ‘‘(as defined in section 10101 of title 53)’’; and 

14 (5) in section 47113(a)— 

15 (A) in paragraph (1)(A), by striking ‘‘section 3 of the Small 

16 Business Act (15 U.S.C. 632)’’ and inserting ‘‘section 10101 of 

17 title 53’’; 

18 (B) in paragraph (2), by striking ‘‘in section 8(d) of the Act 

19 (15 U.S.C. 637(d)) and relevant subcontracting regulations pre20 scribed under section 8(d)’’ and inserting ‘‘for purposes of chapter 

21 221 of title 53 (including relevant subcontracting regulations pre22 scribed under that chapter)’’; and 

23 (C) in paragraph (3), by striking ‘‘section 3(p) of the Small 

24 Business Act (15 U.S.C. 632(o))’’ and inserting ‘‘section 10101 of 

25 title 53’’. 

26 SEC. 5. CONFORMING AMENDMENTS TO NON-POSITIVE LAW PROVI27 SIONS OF THE UNITED STATES CODE. 

28 (a) TITLE 6.— 

29 (1) Section 853(c) of the Homeland Security Act of 2002 (6 U.S.C. 

30 423(c)) is amended by striking ‘‘section 15(j) of the Small Business 

31 Act (15 U.S.C. 644(j))’’ and inserting ‘‘section 25108 of title 53, 

32 United States Code,’’. 

33 (2) Section 856(b) of the Homeland Security Act of 2002 (6 U.S.C. 

34 426(b)) is amended by striking ‘‘Subclause (II) of section 8(a)(1)(D)(i) 

35 of the Small Business Act (15 U.S.C. 637(a)(1)(D)(i)) and clause (ii) 

36 of section 31(b)(2)(A) of such Act (15 U.S.C. 657a(b)(2)(A))’’ and in37 serting ‘‘sections 23305(a)(2) and 25303(3) of title 53, United States 

38 Code,’’. 

39 (b) TITLE 7.— 

40 (1) Section 623(a) of the Agricultural Credit Act of 1987 (7 U.S.C. 

41 1985 note, Public Law 100–233) is amended by striking ‘‘section 


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1 8(a)(5) of the Small Business Act (15 U.S.C. 637(a)(5))’’ and insert2 ing ‘‘section 10101 of title 53, United States Code,’’. 

3 (2) Section 352 of the Consolidated Farm and Rural Development 

4 Act (7 U.S.C. 2000) is amended— 

5 (A) in subsection (a)(3), by striking ‘‘the Small Business Act 

6 (15 U.S.C. 631 et seq.)’’ and inserting ‘‘subtitle II of title 53, 

7 United States Code,’’; and 

8 (B) in subsection (b)(1)(B), by striking ‘‘the Small Business 

9 Act (15 U.S.C. 631 et seq.)’’ and inserting ‘‘subtitle II of title 53, 

10 United States Code’’. 

11 (3) Section 1462(b) of the National Agricultural Research, Exten12 sion, and Teaching Policy Act of 1977 (7 U.S.C. 3310(b)) is amended 

13 by striking ‘‘section 9 of the Small Business Act (15 U.S.C. 638)’’ and 

14 inserting ‘‘chapters 261 and 263 of title 53, United States Code’’. 

15 (4) Section 203(f)(4)(B) of the Agricultural Trade Act of 1978 (7 

16 U.S.C. 5623(f)(4)(B)) is amended by striking ‘‘small-business concern 

17 described in section 3(a) of the Small Business Act (15 U.S.C. 

18 632(a))’’ and inserting ‘‘small business concern (as defined in section 

19 10101 of title 53, United States Code)’’. 

20 (5) Section 1670(a)(5) of the Food, Agriculture, Conservation, and 

21 Trade Act of 1990 (7 U.S.C. 5923(a)(5)) is amended by striking ‘‘the 

22 term ‘small-business concern’ by section 3(a) of the Small Business 

23 Act’’ and inserting ‘‘the term ‘small business concern’ in section 10101 

24 of title 53, United States Code’’. 

25 (6) Section 404(d)(3) of the Agricultural Research, Extension, and 

26 Education Reform Act of 1998 (7 U.S.C. 7624(d)(3)) is amended by 

27 striking ‘‘section 9 of the Small Business Act (15 U.S.C. 638)’’ and 

28 inserting ‘‘chapters 261 and 263 of title 53, United States Code’’. 

29 (c) TITLE 10.— 

30 (1) Section 817(a)(2)(D)(ii) of the National Defense Authorization 

31 Act for Fiscal Year 2006 (10 U.S.C. 2302 note, Public Law 109–163) 

32 is amended by striking ‘‘section 8(a) of the Small Business Act (15 

33 U.S.C. 637(a))’’ and inserting ‘‘chapters 231 to 235 of title 53, United 

34 States Code’’. 

35 (2) Section 853(c) of the National Defense Authorization Act for 

36 Fiscal Year 2004 (10 U.S.C. 2302 note, Public Law 108–136) is 

37 amended by striking ‘‘section 15(g)(1) of the Small Business Act (15 

38 U.S.C. 644(g)(1))’’ and inserting ‘‘section 25106(a) of title 53, United 

39 States Code’’. 

40 (3) Section 812(e) of the National Defense Authorization Act for 

41 Fiscal Year 2000 (10 U.S.C. 2302 note, Public Law 106–65) is 


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1 amended by striking ‘‘the same meaning as the meaning of such term 

2 as used in the Small Business Act (15 U.S.C. 631 et seq.)’’ and insert3 ing ‘‘the meaning given the term ‘small business concern’ in section 

4 10101 of title 53, United States Code’’. 

5 (4) Section 831 of the National Defense Authorization Act for Fiscal 

6 Year 1991 (10 U.S.C. 2302 note, Public Law 101–510) is amended— 

7 (A) in subsection (f)(7)(A), by striking ‘‘section 21 of the Small 

8 Business Act (15 U.S.C. 648)’’ and inserting ‘‘chapter 271 of title 

9 53, United States Code’’; 

10 (B) in subsection (h)— 

11 (i) in paragraph (1), by striking ‘‘the Small Business Act’’ 

12 and inserting ‘‘subtitles I and II of title 53, United States 

13 Code’’; and 

14 (ii) in paragraph (2)— 

15 (I) by striking ‘‘section 8 of the Small Business Act 

16 (15 U.S.C. 637)’’ and inserting ‘‘chapters 231 to 235 of 

17 title 53, United States Code’’; and 

18 (II) by striking ‘‘the Small Business Act’’ and insert19 ing ‘‘subtitle I or II of title 53, United States Code’’; 

20 (C) in subsection (k), by striking ‘‘section 8(d) of the Small 

21 Business Act (15 U.S.C. 637(d))’’ and inserting ‘‘chapter 243 of 

22 title 53, United States Code,’’; and 

23 (D) in subsection (m)— 

24 (i) in paragraph (1), by striking ‘‘section 3(a) of the Small 

25 Business Act (15 U.S.C. 632(a))’’ and inserting ‘‘section 

26 10101(70) of title 53, United States Code,’’; 

27 (ii) in paragraph (2)— 

28 (I) in subparagraph (B), by striking ‘‘section 8(a)(13) 

29 of the Small Business Act (15 U.S.C. 637(a)(13))’’ and 

30 inserting ‘‘section 23101 of title 53, United States 

31 Code,’’; 

32 (II) in subparagraph (C), by striking ‘‘section 8(a)(15) 

33 of the Small Business Act (15 U.S.C. 637(a)(15))’’ and 

34 inserting ‘‘section 10101 of title 53, United States 

35 Code’’; 

36 (III) in subparagraph (E), by striking ‘‘section 

37 8(d)(3)(D) of the Small Business Act (15 U.S.C. 

38 637(d)(3)(D))’’ and inserting ‘‘section 10101 of title 53, 

39 United States Code’’; 


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1 (IV) in subparagraph (F), by striking ‘‘section 8(d)(3) 

2 of the Small Business Act’’ and inserting ‘‘section 10101 

3 of title 53, United States Code’’; and 

4 (V) in subparagraph (G), by striking ‘‘section 3(p) of 

5 the Small Business Act’’ and inserting ‘‘section 10101 of 

6 title 53, United States Code’’; 

7 (iii) in paragraph (3), by striking ‘‘in section 8(d)(3)(C) of 

8 the Small Business Act (15 U.S.C. 637(d)(3)(C))’’ and in9 serting ‘‘for purposes of chapter 243 of title 53, United 

10 States Code’’; and 

11 (iv) in paragraph (6), by striking ‘‘section 8(d) of the 

12 Small Business Act (15 U.S.C. 637(d))’’ and inserting ‘‘chap13 ter 221 of title 53, United States Code’’. 

14 (5) Section 2723(c) of Public Law 98–369 (10 U.S.C. 2304 note) 

15 is amended by striking ‘‘section 8(a) of the Small Business Act (15 

16 U.S.C. 637(a))’’ and inserting ‘‘chapters 231 to 235 of title 53, United 

17 States Code’’. 

18 (6) Section 8025(b) of the Department of Defense Appropriations 

19 Act, 2004 (10 U.S.C. 2410d note, Public Law 108–87), is amended by 

20 striking ‘‘section 8(d) of the Small Business Act (15 U.S.C. 637(d))’’ 

21 and inserting ‘‘chapter 243 of title 53, United States Code,’’. 

22 (7) Section 2912(b) of the National Defense Authorization Act for 

23 Fiscal Year 1994 (10 U.S.C. 2687 note, Public Law 103–160) is 

24 amended— 

25 (A) in paragraph (1), by striking ‘‘means a business concern 

26 meeting the requirements of section 3 of the Small Business Act 

27 (15 U.S.C. 632)’’ and inserting ‘‘has the meaning given the term 

28 in section 10101 of title 53, United States Code’’; and 

29 (B) in paragraph (2), by striking ‘‘the business concerns re30 ferred to in section 8(d)(1) of such Act’’ and inserting ‘‘a qualified 

31 HUBZone small business concern, small business concern owned 

32 and operated by service-disabled veterans, small business concern 

33 owned and operated by socially and economically disadvantaged in34 dividuals, small business concern owned and operated by veterans, 

35 small business concern owned and operated by women, or other 

36 small business concern (as those terms are defined in section 

37 10101 of title 53, United States Code)’’. 

38 (d) TITLE 12.— 

39 (1) Section 2(b)(1) of the Export-Import Bank Act of 1945 (12 

40 U.S.C. 635(b)(1)) is amended— 

41 (A) in subparagraph (E)— 


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1 (i) in clause (iii)(II), by striking ‘‘socially and economically 

2 disadvantaged small business concerns (as defined in section 

3 8(a)(4) of the Small Business Act), small business concerns 

4 (as defined in section 3(a) of the Small Business Act) owned 

5 by women, and small business concerns (as defined in section 

6 3(a) of the Small Business Act)’’ and inserting ‘‘small busi7 ness concerns owned and controlled by socially and economi8 cally disadvantaged individuals (as defined in section 10101 

9 of title 53, United States Code), small business concerns (as 

10 defined in section 10101 of title 53, United States Code) 

11 owned by women, and other small business concerns (as de12 fined in section 10101 of title 53, United States Code),’’; 

13 (ii) in clause (v), by striking ‘‘(as defined under section 3 

14 of the Small Business Act)’’ and inserting ‘‘(as defined in sec15 tion 10101 of title 53, United States Code),’’; and 

16 (iii) in clause (vii)(I), by striking ‘‘section 103 of the Small 

17 Business Investment Act of 1958’’ and inserting ‘‘section 

18 30101 of title 53, United States Code,’’; and 

19 (B) in subparagraph (H)(iii), by striking ‘‘(as such term is de20 fined in section 3 of the Small Business Act)’’ and inserting ‘‘(as 

21 defined in section 10101 of title 53, United States Code),’’. 

22 (2) Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 

23 635g) is amended— 

24 (A) in subsection (c), by striking ‘‘(as defined in section 3(a) 

25 of the Small Business Act)’’ and inserting ‘‘(as defined in section 

26 10101 of title 53, United States Code)’’; 

27 (B) in subsection (d), by striking ‘‘(as defined in section 3(a) 

28 of the Small Business Act)’’ and inserting ‘‘(as defined in section 

29 10101 of title 53, United States Code)’’; and 

30 (C) in subsection (e), by striking ‘‘socially and economically dis31 advantaged small business concerns (as defined in section 8(a)(4) 

32 of the Small Business Act), small business concerns (as defined 

33 in section 3(a) of the Small Business Act) owned by women, and 

34 small business concerns (as defined in section 3(a) of the Small 

35 Business Act)’’ and inserting ‘‘small business concerns owned and 

36 controlled by socially and economically disadvantaged individuals 

37 (as defined in section 10101 of title 53, United States Code), 

38 small business concerns (as defined in section 10101 of title 53, 

39 United States Code) owned by women, and other small business 

40 concerns (as defined in section 10101 of title 53, United States 

41 Code)’’. 


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1 (3) Section 11(h) of the Federal Home Loan Bank Act (12 U.S.C. 

2 1431(h)) is amended by striking ‘‘formed pursuant to section 301 of 

3 the Small Business Investment Act of 1958’’ and inserting ‘‘(as defined 

4 in section 30301 of title 53, United States Code)’’. 

5 (4) Section 21A(b)(13) of the Federal Home Loan Bank Act (12 

6 U.S.C. 1441a(b)(13)) is amended by striking ‘‘(as defined in section 

7 3(p) of the Small Business Act)’’ and inserting ‘‘(as defined in section 

8 10101 of title 53, United States Code),’’. 

9 (5) Section 5(c)(4) of the Home Owners’ Loan Act (12 U.S.C. 

10 1464(c)(4)) is amended— 

11 (A) in subparagraph (D), by striking ‘‘small business invest12 ment company formed pursuant to section 301(d) of the Small 

13 Business Investment Act of 1958’’ and inserting ‘‘specialized small 

14 business investment company (as defined in section 30301 of title 

15 53, United States Code)’’; and 

16 (B) in subparagraph (F), by striking ‘‘New Markets Venture 

17 Capital company as defined in section 351 of the Small Business 

18 Investment Act of 1958’’ and inserting ‘‘new markets venture 

19 company (as defined in section 30301 of title 53, United States 

20 Code)’’. 

21 (6) Section 951(c)(3) of the Financial Institutions Reform, Recovery, 

22 and Enforcement Act of 1989 (12 U.S.C. 1833a(c)(3)) is amended by 

23 striking ‘‘section 16(a) of the Small Business Act (15 U.S.C. 645(a))’’ 

24 and inserting ‘‘section 10501 of title 53, United States Code’’. 

25 (7) Section 208(i)(8) of the Small Business Loan Securitization and 

26 Secondary Market Enhancement Act of 1994 (12 U.S.C. 1835(i)(8)) 

27 is amended by striking ‘‘section 3(a) of the Small Business Act’’ and 

28 inserting ‘‘section 10101 of title 53, United States Code’’. 

29 (8) Section 103(b)(1)(A) of the National Consumer Cooperative 

30 Bank Act (12 U.S.C. 3013(b)(1)(A)) is amended by striking ‘‘section 

31 3 of the Small Business Act’’ and inserting ‘‘section 10101 of title 53, 

32 United States Code’’. 

33 (9) Section 103(6) of the Community Development Banking and Fi34 nancial Institutions Act of 1994 (12 U.S.C. 4702(6)) is amended by 

35 striking ‘‘the Small Business Investment Act of 1958’’ and inserting 

36 ‘‘subtitle III of title 53, United States Code’’. 

37 (e) TITLE 15.— 

38 (1) Section 3(c) of the Securities Act of 1933 (15 U.S.C. 77c(c)) is 

39 amended by striking ‘‘the Small Business Investment Act of 1958’’ and 

40 inserting ‘‘subtitle III of title 53, United States Code,’’. 


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1 (2) Section 304(e) of the Trust Indenture Act of 1939 (15 U.S.C. 

2 77ddd(e)) is amended by striking ‘‘the Small Business Investment Act 

3 of 1958’’ and inserting ‘‘subtitle III of title 53, United States Code,’’. 

4 (3) Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 

5 78c(a)) is amended— 

6 (A) in paragraph (53)(B)(ii), by striking ‘‘section 3(a) of the 

7 Small Business Act’’ and inserting ‘‘section 10101 of title 53, 

8 United States Code’’; and 

9 (B) in paragraph (54)(A)(iv), by striking ‘‘licensed by the 

10 United States Small Business Administration under section 301(c) 

11 or (d) of the Small Business Investment Act of 1958’’ and insert12 ing ‘‘(as defined in section 30101 of title 53, United States 

13 Code)’’. 

14 (4) Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 

15 80a–2(a)) is amended— 

16 (A) in paragraph (46)(B), by striking ‘‘the Small Business In17 vestment Act of 1958’’ and inserting ‘‘subtitle III of title 53, 

18 United States Code,’’; and 

19 (B) in paragraph (47)(C), by striking ‘‘the Small Business In20 vestment Act of 1958’’ and inserting ‘‘subtitle III of title 53, 

21 United States Code’’. 

22 (5) Section 18(k) of the Investment Company Act of 1940 (15 

23 U.S.C. 80a–18(k)) is amended by striking ‘‘the Small Business Invest24 ment Act of 1958’’ and inserting ‘‘subtitle III of title 53, United States 

25 Code’’. 

26 (6) Section 61(a)(4) of the Investment Company Act of 1940 (15 

27 U.S.C. 80a–60(a)(4)) is amended by striking ‘‘the Small Business In28 vestment Act of 1958’’ and inserting ‘‘subtitle III of title 53, United 

29 States Code,’’. 

30 (7) Section 234 of the Disaster Relief Act of 1970 (15 U.S.C. 636b) 

31 is amended in the second sentence by striking ‘‘sections 231, 232, 

32 236(b) and 237’’ and inserting ‘‘section 236(b)’’. 

33 (8) Section 235 of the Disaster Relief Act of 1970 (15 U.S.C. 636c) 

34 is amended by striking ‘‘section 231, 232, or 233’’ and inserting ‘‘sec35 tion 233’’. 

36 (9) Section 237(a) of the Disaster Relief Act of 1970 (15 U.S.C. 

37 636d(a)) is amended in the first sentence by striking ‘‘The Small Busi38 ness Administration in the case of a nonagricultural enterprise, and the 

39 Farmers Home Administration in the case of an agricultural enter40 prise, are authorized to provide any industrial, commercial, agriculVerDate Nov 24 2008 00:04 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00446 Fmt 6652 Sfmt 6221 E:\BILLS\H1983.IH H1983

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1 tural, or other enterprise, which’’ and inserting ‘‘The Secretary of Agri2 culture may provide an agricultural enterprise that’’. 

3 (10) Section 704(a)(9) of the Consumer Credit Protection Act (15 

4 U.S.C. 1691c(a)(9)) is amended by striking ‘‘The Small Business In5 vestment Act of 1958’’ and inserting ‘‘subtitle III of title 53, United 

6 States Code’’. 

7 (f) TITLE 16.— 

8 (1) Section 14(i)(1) of the National Forest Management Act of 1976 

9 (16 U.S.C. 472a(i)(1)) is amended by striking ‘‘the Small Business 

10 Act, as amended’’ and inserting ‘‘subtitles I and II of title 53, United 

11 States Code’’. 

12 (2) Section 329(c)(1) of the Department of the Interior and Related 

13 Agencies Appropriations Act, 1999 (16 U.S.C. 535a(c)(1)), is amended 

14 by striking ‘‘the Small Business Act (15 U.S.C. 631 et seq.)’’ and in15 serting ‘‘subtitles I and II of title 53, United States Code’’. 

16 (3) Section 705(f) of the Alaska National Interest Lands Conserva17 tion Act (16 U.S.C. 539d(f)) is amended by striking ‘‘the Small Busi18 ness Act as amended (15 U.S.C. 631 et seq.)’’ and inserting ‘‘subtitles 

19 I and II of title 53, United States Code’’. 

20 (g) TITLE 19.— 

21 (1) Section 254(c) of the Trade Act of 1974 (19 U.S.C. 2344(c)) 

22 is amended by ‘‘striking section 7(a) of the Small Business Act’’ and 

23 inserting ‘‘division B of subtitle II of title 53, United States Code’’. 

24 (2) Section 255(d)(1) of the Trade Act of 1974 (19 U.S.C. 

25 2345(d)(1)) is amended by striking ‘‘the Small Business Act’’ and in26 serting ‘‘subtitles I and II of title 53, United States Code,’’. 

27 (3) Section 256(a) of the Trade Act of 1974 (19 U.S.C. 2346(a)) 

28 is amended by striking ‘‘the Small Business Act’’ and inserting ‘‘sub29 titles I and II of title 53, United States Code’’. 

30 (h) TITLE 20.—Section 142 of the Higher Education Act of 1965 (20 

31 U.S.C. 1018a) is amended— 

32 (1) in subsection (d)(2)(A), by striking ‘‘subsections (e), (f), and (g) 

33 of section 8 of the Small Business Act (15 U.S.C. 637)’’ and inserting 

34 ‘‘section 24501 of title 53, United States Code’’; 

35 (2) in subsection (g)(6), by striking ‘‘section 8(h) of the Small Busi36 ness Act (15 U.S.C. 637(h))’’ and inserting ‘‘section 24701 of title 53, 

37 United States Code,’’; and 

38 (3) in subsection (h)(1)(B), by striking ‘‘section 15(a) of the Small 

39 Business Act (15 U.S.C. 644(a))’’ and inserting ‘‘section 25101 of title 

40 53, United States Code’’. 


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1 (i) TITLE 22.—Section 310(c)(1) of the Chemical Weapons Convention 

2 Implementation Act of 1998 (22 U.S.C. 6729(c)(1)) is amended by striking 

3 ‘‘section 3 of the Small Business Act’’ and inserting ‘‘section 10101 of title 

4 53, United States Code’’. 

5 (j) TITLE 23.— 

6 (1) Section 1101(b)(1) of the Safe, Accountable, Flexible, Efficient 

7 Transportation Equity Act: A Legacy for Users (23 U.S.C. 101 note, 

8 Public Law 109–59) is amended— 

9 (A) in subparagraph (A), by striking ‘‘section 3 of the Small 

10 Business Act (15 U.S.C. 632)’’ and inserting ‘‘section 10101 of 

11 title 53, United States Code’’; and 

12 (B) in subparagraph (B), by striking ‘‘section 8(d) of the Small 

13 Business Act (15 U.S.C. 637(d))’’ and inserting ‘‘chapter 243 of 

14 title 53, United States Code,’’. 

15 (2) Section 1101(b) of the Transportation Equity Act for the 21st 

16 Century (23 U.S.C. 101 note, Public Law 105–178) is amended— 

17 (A) in subparagraph (A), by striking ‘‘section 3 of the Small 

18 Business Act (15 U.S.C. 632)’’ and inserting ‘‘section 10101 of 

19 title 53, United States Code’’; and 

20 (B) in subparagraph (B), by striking ‘‘section 8(d) of the Small 

21 Business Act (15 U.S.C. 637(d))’’ and inserting ‘‘chapter 243 of 

22 title 53, United States Code,’’. 

23 (k) TITLE 25.— 

24 (1) Section 105(a)(3)(C)(ii)(X) of the Indian Self-Determination Act 

25 (25 U.S.C. 450j(a)(3)(C)(ii)(X)) is amended by striking ‘‘The Small 

26 Business Act (15 U.S.C. 631 et seq.)’’ and inserting ‘‘Subtitles I and 

27 II of title 53, United States Code’’. 

28 (2) Section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452) 

29 is amended in subsections (h) and (i) by striking ‘‘section 410 of the 

30 Small Business Investment Act of 1958, as amended (15 U.S.C. 661, 

31 694a)’’ and inserting ‘‘section 32101 of title 53, United States Code’’. 

32 (3) Section 218(b)(1) of the Indian Financing Act of 1974 (25 

33 U.S.C. 1497a(b)(1)) is amended by striking ‘‘section 411 of the Small 

34 Business Investment Act of 1958, as amended (15 U.S.C. 661, 694b)’’ 

35 and inserting ‘‘section 32102 of title 53, United States Code’’. 

36 (l) TITLE 29.—Section 211 of the Assistive Technology Act of 1998 (29 

37 U.S.C. 3031) is amended— 

38 (1) in subsection (a), by striking ‘‘small-business concern, as de39 scribed in section 3(a) of the Small Business Act (15 U.S.C. 632(a))’’ 

40 and inserting ‘‘small business concern (as defined in section 10101 of 

41 title 53, United States Code)’’; and 


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1 (2) in subsection (b)— 

2 (A) in the first sentence, by striking ‘‘section 9(g) of the Small 

3 Business Act (15 U.S.C. 638(g))’’ and inserting ‘‘section 26302 

4 of title 53, United States Code’’; and 

5 (B) in the second sentence, by striking ‘‘section 9(f) of such Act 

6 (15 U.S.C. 638(g))’’ and inserting ‘‘section 26301 of title 53, 

7 United States Code’’. 

8 (m) TITLE 26.— 

9 (1) Section 243(a)(2) of the Internal Revenue Code of 1986 (26 

10 U.S.C. 243(a)(2)) is amended by striking ‘‘the Small Business Invest11 ment Act of 1958 (15 U.S.C. 661 and following)’’ and inserting ‘‘sub12 title III of title 53, United States Code’’. 

13 (2) Section 246A(b)(2) of the Internal Revenue Code of 1986 (26 

14 U.S.C. 246A(b)(2)) is amended by striking ‘‘the Small Business Invest15 ment Act of 1958’’ and inserting ‘‘subtitle III of title 53, United States 

16 Code’’. 

17 (3) Section 514(c)(6)(A)(ii) of the Internal Revenue Code of 1986 

18 (26 U.S.C. 514(c)(6)(A)(ii)) is amended— 

19 (A) in the matter preceding subclause (I), by striking ‘‘the 

20 Small Business Investment Act of 1958’’ and inserting ‘‘subtitle 

21 III of title 53, United States Code,’’; and 

22 (B) in subclause (I), by striking ‘‘section 303(a) of such Act’’ 

23 and inserting ‘‘section 30304 of that title’’. 

24 (4) Section 542(c)(8) of the Internal Revenue Code of 1986 (26 

25 U.S.C. 542(c)(8)) is amended by striking ‘‘the Small Business Invest26 ment Act of 1958 (15 U.S.C. 661 and following)’’ and inserting ‘‘sub27 title III of title 53, United States Code,’’. 

28 (5) Section 582(c)(2)(A)(iii) of the Internal Revenue Code of 1986 

29 (26 U.S.C. 582(c)(2)(A)(iii)) is amended by striking ‘‘the Small Busi30 ness Investment Act of 1958’’ and inserting ‘‘subtitle III of title 53, 

31 United States Code’’. 

32 (6) Section 1242(1) of the Internal Revenue Code of 1986 (26 

33 U.S.C. 1242(1)) is amended by striking ‘‘the Small Business Invest34 ment Act of 1958’’ and inserting ‘‘subtitle III of title 53, United States 

35 Code’’. 

36 (7) Section 1243 of the Internal Revenue Code of 1986 (26 U.S.C. 

37 1243) is amended— 

38 (A) in the matter preceding paragraph (1), by striking ‘‘the 

39 Small Business Investment Act of 1958’’ and inserting ‘‘subtitle 

40 III of title 53, United States Code’’; and 


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1 (B) in paragraph (1), by striking ‘‘section 304 of the Small 

2 Business Act of 1958’’ and inserting ‘‘section 30305 of title 53, 

3 United States Code’’. 

4 (n) TITLE 33.—Section 5(b)(3)(A) of the Act of August 18, 1941 (33 

5 U.S.C. 701n(b)(3)(A)), is amended by striking ‘‘section 7(b)(2) of the Small 

6 Business Act’’ and inserting ‘‘section 21302 of title 53, United States 

7 Code’’. 

8 (o) TITLE 41.— 

9 (1) Section 303 of the Federal Property and Administrative Services 

10 Act of 1949 (41 U.S.C. 253) is amended— 

11 (A) in subsection (b)(2), by striking ‘‘sections 9 and 15 of the 

12 Small Business Act’’ and inserting ‘‘chapters 251, 261, and 263 

13 of title 53, United States Code’’; and 

14 (B) in subsection (f)(2)(D), by striking ‘‘section 8(a) of the 

15 Small Business Act’’ and inserting ‘‘chapters 231 to 235 of title 

16 53, United States Code’’. 

17 (2) Section 303C of the Federal Property and Administrative Serv18 ices Act (41 U.S.C. 253c) is amended— 

19 (A) in subsection (c)(5), by striking ‘‘section 8(b)(7) of the 

20 Small Business Act’’ and inserting ‘‘section 24108 of title 53, 

21 United States Code,’’. 

22 (B) in subsection (d)(2), by striking ‘‘section 3 of the Small 

23 Business Act’’ and inserting ‘‘section 10101 of title 53, United 

24 States Code’’. 

25 (3) Section 303I of the Federal Property and Administrative Serv26 ices Act of 1949 (41 U.S.C. 253i) is amended— 

27 (A) in subsection (c), by striking ‘‘section 8(e) of the Small 

28 Business Act (15 U.S.C. 637(e))’’ and inserting ‘‘section 24501 of 

29 title 53, United States Code,’’; and 

30 (B) in subsection (f)(3), by striking ‘‘section 8(e) of the Small 

31 Business Act (15 U.S.C. 637(e))’’ and inserting ‘‘section 24501 of 

32 title 53, United States Code’’. 

33 (4) Section 303J(a)(1) of the Federal Property and Administrative 

34 Services Act of 1949 (41 U.S.C. 253j(a)(1)) is amended by striking 

35 ‘‘section 8(e) of the Small Business Act (15 U.S.C. 637(e))’’ and in36 serting ‘‘section 24501 of title 53, United States Code’’. 

37 (5) Section 309(b) of the Federal Property and Administrative Serv38 ices Act of 1949 (41 U.S.C. 259(b)) is amended— 

39 (A) in paragraph (4), by striking ‘‘section 15 of the Small Busi40 ness Act’’ and inserting ‘‘chapter 251 of title 53, United States 

41 Code,’’; and 


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1 (B) in paragraph (5), by striking ‘‘section 9 of the Small Busi2 ness Act’’ and inserting ‘‘chapters 261 and 263 of title 53, United 

3 States Code’’. 

4 (6) Section 8304(4) of the Federal Acquisition Streamlining Act of 

5 1964 (41 U.S.C. 264 note, Public Law 103–355) is amended by strik6 ing ‘‘subsections (a) and (d) of section 8 of the Small Business Act 

7 (15 U.S.C. 637 (a) and (d))’’ and inserting ‘‘chapters 231 to 235 and 

8 243 of title 53, United States Code’’. 

9 (7) Section 6(d) of the Office of Federal Procurement Policy Act (41 

10 U.S.C. 405(d)) is amended in paragraphs (11) and (12) by striking 

11 ‘‘(as defined in section 3(p) of the Small Business Act)’’ and inserting 

12 ‘‘(as defined in section 10101 of title 53, United States Code)’’. 

13 (8) Section 18(c)(1)(C)(ii) of the Office of Federal Procurement Pol14 icy Act (41 U.S.C. 416(c)(1)(C)(ii)) is amended by striking ‘‘section 9 

15 of the Small Business Act’’ and inserting ‘‘chapters 261 and 263 of 

16 title 53, United States Code’’. 

17 (9) Section 502 of the Women’s Business Ownership Act of 1988 

18 (41 U.S.C. 417a) is amended by striking subsection (b) and inserting 

19 the following: 

20 ‘‘(b) DEFINITIONS.—In this section, the terms ‘qualified HUBZone small 

21 business concern’, ‘small business concern owned and controlled by socially 

22 and economically disadvantaged individuals’, and ‘small business concern 

23 owned and controlled by women’ have the meanings given the terms in sec24 tion 10101 of title 53, United States Code.’’. 

25 (10) Section 22(c)(2) of the Office of Federal Procurement Policy 

26 Act (41 U.S.C. 418a(c)(2)) is amended by striking ‘‘section 2(b) of the 

27 Small Business Innovation Development Act of 1982 (Public Law 97– 

28 219; 15 U.S.C. 638 note), and the declaration of policy in section 2 

29 of the Small Business Act (15 U.S.C. 631)’’ and inserting ‘‘section 

30 2(b) of the Small Business Innovation Development Act of 1982 (Pub31 lic Law 97–219), and the declaration of policy in section 2 of the Small 

32 Business Act (Public Law 85–536)’’. 

33 (11) Section 32 of the Federal Procurement Policy Act (41 U.S.C. 

34 428) is amended— 

35 (A) in subsection (a)(1), by striking ‘‘section 8(a) of the Small 

36 Business Act (15 U.S.C. 637(a))’’ and inserting ‘‘chapters 231 to 

37 235 of title 53, United States Code’’; and 

38 (B) in subsection (b), by striking ‘‘section 15(j) of the Small 

39 Business Act (15 U.S.C. 644(j))’’ and inserting ‘‘section 25108 of 

40 title 53, United States Code,’’. 


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1 (12) Section 35(a)(3)(A) of the Federal Procurement Policy Act (41 

2 U.S.C. 431(a)(3)(A)) is amended by striking ‘‘section 15 of the Small 

3 Business Act (15 U.S.C. 644)’’ and inserting ‘‘chapter 251 of title 53, 

4 United States Code’’. 

5 (p) TITLE 42.— 

6 (1) Section 1701(a)(7)(A) of the Public Health Service Act (42 

7 U.S.C. 300u(a)(7)(A)) is amended by striking ‘‘small businesses (as de8 fined in section 3 of the Small Business Act)’’ and inserting ‘‘small 

9 business concerns (as defined in section 10101 of title 53, United 

10 States Code)’’. 

11 (2) The matter under the heading ‘‘SMALL AND DISADVANTAGED

12 BUSINESS’’ under the heading ‘‘ADMINISTRATIVE PROVISIONS’’ under 

13 the heading ‘‘NATIONAL AERONAUTICS AND SPACE ADMINISTRATION’’ 

14 in title III of the Departments of Veterans Affairs and Housing and 

15 Urban Development, and Independent Agencies Appropriations Act, 

16 1990 (42 U.S.C. 2473b), is amended by striking ‘‘(within the meaning 

17 of section 637(a) (5) and (6) of the Small Business Act (15 U.S.C. 

18 637(a) (5) (6))’’ and inserting ‘‘(as defined in section 10101 of title 

19 53, United States Code)’’. 

20 (3) Section 808(f)(7) of Public Law 90–284 (42 U.S.C. 3608(f)(7)) 

21 is amended by striking ‘‘section 8(a) of the Small Business Act’’ and 

22 inserting ‘‘chapters 231 to 235 of title 53, United States Code’’. 

23 (4) The first undesignated paragraph under the heading ‘‘ADMINIS24 TRATIVE PROVISIONS’’ under the heading ‘‘ENVIRONMENTAL PROTEC25 TION AGENCY’’ in title III of the Departments of Veterans Affairs and 

26 Housing and Urban Development, and Independent Agencies Appro27 priations Act, 1993 (42 U.S.C. 4370d), is amended by striking ‘‘(with28 in the meaning of section 8(a) (5) and (6) of the Small Business Act 

29 (15 U.S.C. 637(a) (5) and (6)))’’ and inserting ‘‘(as defined in section 

30 10101 of title 53, United States Code)’’. 

31 (5) Section 406(a)(3)(A)(ii)(I) of the Robert T. Stafford Disaster 

32 Relief and Emergency Assistance Act (42 U.S.C. 5172(a)(3)(A)(ii)(I)) 

33 is amended by striking ‘‘section 7(b) of the Small Business Act (15 

34 U.S.C. 636(b))’’ and inserting ‘‘chapter 213 of title 53, United States 

35 Code’’. 

36 (6) Section 622(c) of the Robert T. Stafford Disaster Relief and 

37 Emergency Assistance Act (42 U.S.C. 5197h(c)) is amended by strik38 ing ‘‘(as defined in section 3(p) of the Small Business Act (15 U.S.C. 

39 632(p))) and inserting ‘‘(as defined in section 10101 of title 53, United 

40 States Code)’’. 


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1 (7) Section 102(a)(23) of the Housing and Community Development 

2 Act of 1974 (42 U.S.C. 5302(a)(23)) is amended by striking ‘‘a busi3 ness that meets the criteria set forth in section 3(a) of the Small Busi4 ness Act’’ and inserting ‘‘a small business concern (as defined in sec5 tion 10101 of title 53, United States Code)’’. 

6 (8) Section 105(a)(15) of the Housing and Community Development 

7 Act of 1974 (42 U.S.C. 5305(a)(15)) is amended by striking ‘‘entities 

8 organized under section 301(d) of the Small Business Investment Act 

9 of 1958’’ and inserting ‘‘specialized small business investment compa10 nies (as defined in section 30301 of title 53, United States Code) orga11 nized’’. 

12 (9) Section 362(f)(5)(B) of the Energy Policy and Conservation Act 

13 (42 U.S.C. 6322(f)(5)(B)) is amended by striking ‘‘section 3(a) of the 

14 Small Business Act (15 U.S.C. 632(a))’’ and inserting ‘‘section 10101 

15 of title 53, United States Code,’’. 

16 (10) Section 3159(a)(1) of the National Defense Authorization Act 

17 for Fiscal Year 1994 (42 U.S.C. 7256 note, Public Law 103–1956) is 

18 amended by striking ‘‘section 8(d) of the Small Business Act (15 

19 U.S.C. 637(d)) and regulations issued under that section’’ and insert20 ing ‘‘chapter 243 of title 53, United States Code, and regulations 

21 issued under that chapter’’. 

22 (11) Section 3135(b)(2) of the National Defense Authorization Act 

23 for Fiscal Year 1993 (42 U.S.C. 7261b(b)(2)) is amended by striking 

24 ‘‘prescribed pursuant to section 3(a) of the Small Business Act (15 

25 U.S.C. 632(a))’’ and inserting ‘‘prescribed for a small business concern 

26 under section 10101 of title 53, United States Code’’. 

27 (12) Section 507(c)(1)(B) of the Clean Air Act (42 U.S.C. 

28 7661f(c)(1)(B)) is amended by striking ‘‘the Small Business Act’’ and 

29 inserting ‘‘section 10101 of title 53, United States Code’’. 

30 (13) Section 107(p)(1) of the Comprehensive Environmental Re31 sponse, Compensation, and Liability Act of 1980 (42 U.S.C. 

32 9607(p)(1)) is amended— 

33 (A) in subparagraph (B), by striking ‘‘(within the meaning of 

34 the Small Business Act (15 U.S.C. 631 et seq.))’’ and inserting 

35 ‘‘(as defined in section 10101 of title 53, United States Code)’’; 

36 and 

37 (B) in the matter following subparagraph (C), by striking ‘‘the 

38 Small Business Act (15 U.S.C. 631 et seq.)’’ and inserting ‘‘sub39 titles I and II of title 53, United States Code’’. 

40 (14) Section 626(a) of the Community Economic Development Act 

41 of 1981 (42 U.S.C. 9815(a)) is amended— 


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1 (A) by striking paragraph (1) and inserting ‘‘(1) Funds that are 

2 invested directly or indirectly in a small business investment com3 pany (as defined in section 30301 of title 53, United States Code) 

4 shall be included as— 

5 ‘‘(A) private capital for purposes of the definition of that term in 

6 section 30301 of title 53, United States Code; and 

7 ‘‘(B) paid-in capital for purposes of section 33103(c)(1) of title 53, 

8 United States Code.’’; and 

9 (B) in paragraph (2), by striking ‘‘section 8(a) of the Small 

10 Business Act’’ and inserting ‘‘chapters 231 to 235 of title 53, 

11 United States Code’’. 

12 (15) Section 3(4) of the Renewable Energy and Energy Efficiency 

13 Technology Competitiveness Act of 1989 (42 U.S.C. 12002(4)) is 

14 amended by striking ‘‘under section 3(a) of the Small Business Act’’ 

15 and inserting ‘‘for a small business concern under section 10101 of 

16 title 53, United States Code,’’. 

17 (16) Section 3021(b) of the Energy Policy Act of 1992 (42 U.S.C. 

18 13556(b)) is amended— 

19 (A) in paragraph (1), by striking ‘‘such term has under section 

20 3 of the Small Business Act (15 U.S.C. 632)’’ and inserting 

21 ‘‘given the term in section 10101 of title 53, United States Code’’; 

22 (B) in paragraph (2), by striking ‘‘such term has under section 

23 8(d) of the Small Business Act (15 U.S.C. 637(d))’’ and inserting 

24 ‘‘that that term has under the contract clause described in section 

25 24301(c) of title 52, United States Code,’’; and 

26 (C) in paragraph (3), by striking ‘‘section 3(p) of the Small 

27 Business Act (15 U.S.C. 632(o))’’ and inserting ‘‘section 10101 of 

28 title 53, United States Code’’. 

29 (17) Section 2(5) of the Energy Policy Act of 2005 (42 U.S.C. 

30 15801(2)) is amended by striking ‘‘section 3 of the Small Business Act 

31 (15 U.S.C. 632)’’ and inserting ‘‘section 10101 of title 53, United 

32 States Code’’. 

33 (18) Section 988(f)(3) of the Energy Policy Act of 2005 (42 U.S.C. 

34 16352(f)(3)) is amended— 

35 (A) in subparagraph (A), by striking ‘‘section 9 of the Small 

36 Business Act (15 U.S.C. 638)’’ and inserting ‘‘division H of sub37 title II of title 53, United States Code’’; and 

38 (B) in subparagraph (B), by striking ‘‘that section’’ and insert39 ing ‘‘that division’’. 

40 (19) Section 1003(a)(1) of the Energy Policy Act of 2005 (42 

41 U.S.C. 16393(a)(1)) is amended by striking ‘‘socially and economically 


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1 disadvantaged small business concerns (as defined in section 8(a)(4) of 

2 the Small Business Act (15 U.S.C. 63y(a)(4)))’’ and inserting ‘‘small 

3 business concerns owned and operated by socially and economically dis4 advantaged individuals (as defined in section 10101 of title 53, United 

5 States Code)’’. 

6 (q) TITLE 43.—Section 29(e)(4)(C) of the Alaska Native Claims Settle7 ment Act (43 U.S.C. 1626(e)(4)(C)) is amended by striking ‘‘section 8 of 

8 Public Law 85–536’’ and inserting ‘‘chapters 231 to 235 of title 53, United 

9 States Code,’’. 

10 (r) TITLE 50.—Section 702 of the Defense Production Act of 1950 (50 

11 App. U.S.C. 2152) is amended— 

12 (1) in paragraph (17), by striking ‘‘section 3(a) of the Small Busi13 ness Act’’ and inserting ‘‘section 10101 of title 53, United States 

14 Code,’’; and 

15 (2) in paragraph (18), by striking ‘‘section 8(d)(3)(C) of the Small 

16 Business Act’’ and inserting ‘‘section 10101 of title 53, United States 

17 Code’’. 

18 SEC. 6. TRANSITIONAL AND SAVINGS PROVISIONS. 

19 (a) DEFINITIONS.—In this section: 

20 (1) SOURCE PROVISION.—The term ‘‘source provision’’ means a pro21 vision of law that is replaced by a title 53 provision. 

22 (2) TITLE 53 PROVISION.—The term ‘‘title 53 provision’’ means a 

23 provision of title 53, United States Code, that is enacted by section 3. 

24 (b) CUTOFF DATE.—The title 53 provisions replace certain provisions of 

25 law enacted on or before February 4, 2009. If a law enacted after that date 

26 amends or repeals a source provision, that law is deemed to amend or re27 peal, as the case may be, the corresponding title 53 provision. If a law en28 acted after that date is otherwise inconsistent with a title 53 provision or 

29 a provision of this Act, that law supersedes the title 53 provision or provi30 sion of this Act to the extent of the inconsistency. 

31 (c) ORIGINAL DATE OF ENACTMENT UNCHANGED.—For purposes of de32 termining whether one provision of law supersedes another based on enact33 ment later in time, a title 53 provision is deemed to have been enacted on 

34 the date of enactment of the source provision that the title 53 provision re35 places. 

36 (d) REFERENCES TO TITLE 53 PROVISIONS.—A reference to a title 53 

37 provision is deemed to refer to the corresponding source provision. 

38 (e) REFERENCES TO SOURCE PROVISIONS.—A reference to a source pro39 vision, including a reference in a regulation, order, or other law, is deemed 

40 to refer to the corresponding title 53 provision. 


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1 (f) REGULATIONS, ORDERS, AND OTHER ADMINISTRATIVE ACTIONS.—A 

2 regulation, order, or other administrative action in effect under a source 

3 provision continues in effect under the corresponding title 53 provision. 

4 (g) ACTIONS TAKEN AND OFFENSES COMMITTED.—An action taken or 

5 an offense committed under a source provision is deemed to have been taken 

6 or committed under the corresponding title 53 provision. 

7 SEC. 7. REPEALS. 

8 The following provisions of law are repealed, except with respect to rights 

9 and duties that matured, penalties that were incurred, or proceedings that 

10 were begun before the date of enactment of this Act: 

Schedule of Laws Repealed 

Act Section United States Code 

Former Classification 

Small Business Act (Public Law 85–536, 

§ 2) ...................................................... 2(d)(1), (g), (i), (j) .................. 15 U.S.C. 631(d)(1), (g), (i),

(j).

3 ............................................... 15 U.S.C. 632.

4 ............................................... 15 U.S.C. 633.

5 ............................................... 15 U.S.C. 634.

6 ............................................... 15 U.S.C. 635.

7 ............................................... 15 U.S.C. 636.

8 ............................................... 15 U.S.C. 637.

9 ............................................... 15 U.S.C. 638.

10 ............................................. 15 U.S.C. 639.

11 ............................................. 15 U.S.C. 640.

12 ............................................. 15 U.S.C. 641.

13 ............................................. 15 U.S.C. 642.

14 ............................................. 15 U.S.C. 643.

15 ............................................. 15 U.S.C. 644.

16 ............................................. 15 U.S.C. 645.

17 ............................................. 15 U.S.C. 646.

18 ............................................. 15 U.S.C. 647.

19 ............................................. 15 U.S.C. 631.

20(a)(1), (2), (4), (b) to (e), 

(j).

15 U.S.C. 631 note.

21 ............................................. 15 U.S.C. 648.

22 ............................................. 15 U.S.C. 649.

23 ............................................. 15 U.S.C. 650.

24 ............................................. 15 U.S.C. 651.

25 ............................................. 15 U.S.C. 652.

26 ............................................. 15 U.S.C. 653.

27 ............................................. 15 U.S.C. 654.

28 ............................................. 15 U.S.C. 655.

29 ............................................. 15 U.S.C. 656.

30 ............................................. 15 U.S.C. 657.

31 ............................................. 15 U.S.C. 657a.

32 ............................................. 15 U.S.C. 657b.

33 ............................................. 15 U.S.C. 657c.

34 ............................................. 15 U.S.C. 657d.

35 ............................................. 15 U.S.C. 657e.

36 ............................................. 15 U.S.C. 657f.

37 ............................................. 15 U.S.C. 657i.

38 ............................................. 15 U.S.C. 657j.

39 ............................................. 15 U.S.C. 657k.

40 ............................................. 15 U.S.C. 657l. 41 ............................................. 15 U.S.C. 657m.

42 ............................................. 15 U.S.C. 657n.

43 ............................................. 15 U.S.C. 657o. 44 ............................................. 15 U.S.C. 631 note.

Small Business Investment Act of 1958 

(Public Law 85–699) .......................... 101 ........................................... 15 U.S.C. 631 note.

102 ........................................... 15 U.S.C. 661.

103 ........................................... 15 U.S.C. 662.

201 ........................................... 15 U.S.C. 671.

301 ........................................... 15 U.S.C. 681.

302 ........................................... 15 U.S.C. 682.

303 ........................................... 15 U.S.C. 683.

304 ........................................... 15 U.S.C. 684.

305 ........................................... 15 U.S.C. 685.

306 ........................................... 15 U.S.C. 686.

308 ........................................... 15 U.S.C. 687.

309 ........................................... 15 U.S.C. 687a.

310 ........................................... 15 U.S.C. 687b.

311 ........................................... 15 U.S.C. 687c.

312 ........................................... 15 U.S.C. 687d.


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Schedule of Laws Repealed—Continued 

Act Section United States Code 

Former Classification 

313 ........................................... 15 U.S.C. 687e.

314 ........................................... 15 U.S.C. 687f.

315 ........................................... 15 U.S.C. 687g.

316 ........................................... 15 U.S.C. 687h.

318 ........................................... 15 U.S.C. 687k.

319 ........................................... 15 U.S.C. 687l. 320 ........................................... 15 U.S.C. 687m.

351 ........................................... 15 U.S.C. 689.

352 ........................................... 15 U.S.C. 689a.

353 ........................................... 15 U.S.C. 689b.

354 ........................................... 15 U.S.C. 689c.

355 ........................................... 15 U.S.C. 689d.

356 ........................................... 15 U.S.C. 689e.

357 ........................................... 15 U.S.C. 689f.

358 ........................................... 15 U.S.C. 689g.

359 ........................................... 15 U.S.C. 689h.

360 ........................................... 15 U.S.C. 689i.

361 ........................................... 15 U.S.C. 689j.

362 ........................................... 15 U.S.C. 689k.

363 ........................................... 15 U.S.C. 689l. 364 ........................................... 15 U.S.C. 689m.

365 ........................................... 15 U.S.C. 689n.

366 ........................................... 15 U.S.C. 689o. 367 ........................................... 15 U.S.C. 689p.

368 ........................................... 15 U.S.C. 689q.

381 ........................................... 15 U.S.C. 690.

382 ........................................... 15 U.S.C. 690a.

383 ........................................... 15 U.S.C. 689b.

384 ........................................... 15 U.S.C. 690c.

385 ........................................... 15 U.S.C. 690d.

386 ........................................... 15 U.S.C. 690e.

387 ........................................... 15 U.S.C. 690f.

388 ........................................... 15 U.S.C. 690g.

389 ........................................... 15 U.S.C. 690h.

390 ........................................... 15 U.S.C. 690i.

391 ........................................... 15 U.S.C. 690j.

392 ........................................... 15 U.S.C. 690k.

393 ........................................... 15 U.S.C. 690l. 394 ........................................... 15 U.S.C. 690m.

395 ........................................... 15 U.S.C. 690n.

396 ........................................... 15 U.S.C. 690o. 397 ........................................... 15 U.S.C. 690p.

398 ........................................... 15 U.S.C. 690q.

401 ........................................... 15 U.S.C. 692.

402 ........................................... 15 U.S.C. 693.

404 ........................................... 15 U.S.C. 694–1.

405 ........................................... 15 U.S.C. 694–2.

410 ........................................... 15 U.S.C. 694a.

411 ........................................... 15 U.S.C. 694b.

412 ........................................... 15 U.S.C. 694c.

501 ........................................... 15 U.S.C. 695.

502 ........................................... 15 U.S.C. 696.

503 ........................................... 15 U.S.C. 697.

504 ........................................... 15 U.S.C. 697a.

505 ........................................... 15 U.S.C. 697b.

506 ........................................... 15 U.S.C. 697c.

507 ........................................... 15 U.S.C. 697d.

508 ........................................... 15 U.S.C. 697e.

509 ........................................... 15 U.S.C. 697f.

510 ........................................... 15 U.S.C. 697g.

Public Law 91–151 ................................. 301 ........................................... 15 U.S.C. 633 note.

Disaster Relief Act of 1970 (Public Law 

91–606) ............................................... 234 ........................................... 15 U.S.C. 636b (first 

sentence).

Public Law 93–24 ................................... 9 ............................................... 15 U.S.C. 636 note.

Public Law 94–305 ................................. 201 ........................................... 15 U.S.C. 634a.

202 ........................................... 15 U.S.C. 634b.

203 ........................................... 15 U.S.C. 634c.

204 ........................................... 15 U.S.C. 634d.

205 ........................................... 15 U.S.C. 634e.

206 ........................................... 15 U.S.C. 634f.

207 ........................................... 15 U.S.C. 634g.

Public Law 95–507 ................................. 223 ........................................... 15 U.S.C. 637b.

224(a) ...................................... 15 U.S.C. 637c.

Small Business Economic Policy Act of 

1980 (Public Law 96–302) ................. 302 ........................................... 15 U.S.C. 631a.


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Schedule of Laws Repealed—Continued 

Act Section United States Code 

Former Classification 

303 ........................................... 15 U.S.C. 632b.

Public Law 96–481 ................................. 301 ........................................... 15 U.S.C. 649a.

302 ........................................... 15 U.S.C. 649b.

303 ........................................... 15 U.S.C. 649c.

304 ........................................... 15 U.S.C. 649d.

Small Business and Federal Procurement Competition Enhancement Act 

of 1984 (Public Law 98–577) ............. 403(b) ...................................... 15 U.S.C. 644 note.

404(c) ...................................... 15 U.S.C. 637 note.

Public Law 99–500 ................................. 101(a) [title VI, § 630], 100 

Stat. 1783, 1783–30.

15 U.S.C. 638 note.

Public Law 99–591 ................................. 101(a) [title VI, § 630], 100 

Stat. 3341, 3341–30.

15 U.S.C. 638 note.

Public Law 100–71 ................................. title I, chapter I, proviso in the 

matter under the heading 

‘‘SALARIES AND EXPENSES’’ 

under the heading ‘‘SMALL

BUSINESS ADMINISTRATION’’ 

under the heading 

‘‘RELATED AGENCIES’’ 

(101 Stat. 396).

15 U.S.C. 633 note.

Women’s Business Ownership Act of 

1988 (Public Law 100–533) ............... 401 ........................................... 15 U.S.C. 7101.

402 ........................................... 15 U.S.C. 7102.

403 ........................................... 15 U.S.C. 7103.

404 ........................................... 15 U.S.C. 7104.

405 ........................................... 15 U.S.C. 7105.

406 ........................................... 15 U.S.C. 7106.

407 ........................................... 15 U.S.C. 7107.

408 ........................................... 15 U.S.C. 7108.

409 ........................................... 15 U.S.C. 7109.

410 ........................................... 15 U.S.C. 7110.

Small Business Administration Reauthorization and Amendment Act of 

1988 (Public Law 100–590) ............... 133(c) ...................................... 15 U.S.C. 644 note.

132 ........................................... 15 U.S.C. 637 note.

Business Opportunity Development Reform Act of 1988 (Public Law 100– 

656) ..................................................... 2 ............................................... 15 U.S.C. 636 note.

303(f) ....................................... 15 U.S.C. 637 note.

304(b) ...................................... 15 U.S.C. 636 note.

401(b) ...................................... 15 U.S.C. 633 note.

410 ........................................... 15 U.S.C. 636 note.

602(a) ...................................... 15 U.S.C. 637 note.

711 ........................................... 15 U.S.C. 644 note.

712 ........................................... 15 U.S.C. 644 note.

713 ........................................... 15 U.S.C. 644 note.

714 ........................................... 15 U.S.C. 644 note.

715 ........................................... 15 U.S.C. 644 note.

717 ........................................... 15 U.S.C. 644 note.

718 ........................................... 15 U.S.C. 644 note.

741 ........................................... 15 U.S.C. 644 note.

711 ........................................... 15 U.S.C. 644 note.

Public Law 101–189 ............................... 834 ........................................... 15 U.S.C. 631c.

Small Business Administration Reauthorization and Amendments Act of 

1990 (Public Law 101–574) ............... 203 ........................................... 15 U.S.C. 637 note.

311 ........................................... 15 U.S.C. 653 note.

Women’s Business Development Act of 

1991 (Public Law 102–191) ............... 3 (second sentence) ................. 15 U.S.C. 637 note.

Small Business Credit and Business Opportunity Enhancement Act of 1992 

(Public Law 102–366) ........................ 202(h) ...................................... 15 U.S.C. 644 note.


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Act Section United States Code 

Former Classification 

221 ........................................... 15 U.S.C. 636 note.

226 ........................................... 15 U.S.C. 634 note.

Public Law 102–484 ............................... 4237 ......................................... 15 U.S.C. 638 note.

Small Business Research and Development Enhancement Act of 1992 (Public Law 102–564) ................................ 306 ........................................... 15 U.S.C. 638 note.

Small Business Guaranteed Credit Enhancement Act of 1993 (Public Law 

103–81) ............................................... 6 ............................................... 15 U.S.C. 634 note.

Riegle Community Development and 

Regulatory Improvement Act of 1994 

(Public Law 103–325) ........................ 172 ........................................... 15 U.S.C. 6901.

173 ........................................... 15 U.S.C. 6902.

174 ........................................... 15 U.S.C. 6903.

175 ........................................... 15 U.S.C. 6904.

176 ........................................... 15 U.S.C. 6905.

177 ........................................... 15 U.S.C. 6906.

178 ........................................... 15 U.S.C. 6907.

179 ........................................... 15 U.S.C. 6908.

180 ........................................... 15 U.S.C. 6909.

181 ........................................... 15 U.S.C. 6910.

Federal Acquisition Streamlining Act of 

1994 (Public Law 103–355) ............... 2353 ......................................... 15 U.S.C. 644 note.

7102 ......................................... 15 U.S.C. 644 note.

7104 ......................................... 15 U.S.C. 644 note.

Small Business Administration Reauthorization and Amendments Act of 

1994 (Public Law 103–403) ............... 212(c) ...................................... 15 U.S.C. 697d note.

Small Business Programs Improvement 

Act of 1996 (Public Law 104–208) .... div. D, title I, § 103(h) ............ 15 U.S.C. 634 note.

Public Law 105–85 ................................. 850(e)(3) ................................. 15 U.S.C. 637 note.

Small Business Reauthorization Act of 

1997 (Public Law 105–135) ............... 202(b) ...................................... 15 U.S.C. 636 note.

416(b) ...................................... 15 U.S.C. 637 note.

501(b)(2) ................................. 15 U.S.C. 636 note.

505 ........................................... 15 U.S.C. 634 note.

507 ........................................... 15 U.S.C. 636 note.

509 ........................................... 15 U.S.C. 636 note.

704 ........................................... 15 U.S.C. 631 note.

707 ........................................... 15 U.S.C. 631 note.

709 ........................................... 15 U.S.C. 631 note.

Veterans Entrepreneurship and Small 

Business Development Act of 1999 

(Public Law 106–50) .......................... 203 ........................................... 15 U.S.C. 657b note.

301 ........................................... 15 U.S.C. 657b note.

302 ........................................... 15 U.S.C. 657b note.

603 ........................................... 15 U.S.C. 657b note.

604 ........................................... 15 U.S.C. 657b note.

Small Business Investment Company 

Amendments Act of 2001 (Public Law 

107–100) ............................................. 6(d) .......................................... 15 U.S.C. 697 note.

Public Law 108–447 ............................... div. K, title I, § 147 ................. 15 U.S.C. 631c.

div. K, title I, § 152(a)(2) ....... 15 U.S.C. 632 note.

div. K, title I, § 155 ................. 15 U.S.C. 657g.

Public Law 109–59 ................................. 10201 ....................................... 15 U.S.C. 657g note.

Public Law 109–289 ............................... div. A, title VIII, § 8018 (last 

proviso).

15 U.S.C. 637 note.


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Act Section United States Code 

Former Classification 

Public Law 110–140 ............................... 1203 ......................................... 15 U.S.C. 657h.

Military Reservist and Veteran Small 

Business Reauthorization and Opportunity Act of 2008 (Public Law 110– 

186) ..................................................... 3 ............................................... 15 U.S.C. 636 note.

105 ........................................... 15 U.S.C. 637 note.

201(b), (c) ............................... 15 U.S.C. 636 note.

202 ........................................... 15 U.S.C. 636 note.

Small Business Disaster Response and 

Loan Improvements Act of 2008 

(Public Law 110–246) ........................ 12052 ....................................... 15 U.S.C. 636e.

12063(b) .................................. 15 U.S.C. 636 note.

12066(b) .................................. 15 U.S.C. 636f.

12072 ....................................... 15 U.S.C. 636g.

12073 ....................................... 15 U.S.C. 636h.

12079 ....................................... 15 U.S.C. 636i.

12085 ....................................... 15 U.S.C. 636j.

12091 ....................................... 15 U.S.C. 636k.

Public Law 111–3 ................................... 621 ........................................... 15 U.S.C. 657p.

Æ 


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