II

107TH CONGRESS

1ST SESSION S. 1493

To forgive interest payments for a 2-year period on certain disaster loans

to small business concerns in the aftermath of the terrorist attacks

perpetrated against the United States on September 11, 2001, to amend

the Internal Revenue Code of 1986 to provide tax relief for small business

concerns, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 3, 2001

Mr. BOND introduced the following bill; which was read twice and referred to

the Committee on Finance

A BILL

To forgive interest payments for a 2-year period on certain

disaster loans to small business concerns in the aftermath of the terrorist attacks perpetrated against the

United States on September 11, 2001, to amend the

Internal Revenue Code of 1986 to provide tax relief

for small business concerns, and for other purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Small Business Leads to Economic Recovery Act of

6 2001’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—SMALL BUSINESS EMERGENCY LOAN ASSISTANCE

Sec. 101. Short title.

Sec. 102. Definitions.

Sec. 103. Deferment of disaster loan payments.

Sec. 104. Refinancing existing disaster loans.

Sec. 105. Emergency relief loan program.

Sec. 106. Economic recovery loan and financing programs.

TITLE II—SMALL BUSINESS TAX PROVISIONS FOR ECONOMIC

STIMULUS

Sec. 201. Amendment of 1986 Code.

Sec. 202. Increase in expense treatment of certain depreciable business assets

for small businesses.

Sec. 203. Expensing of computer software.

Sec. 204. Modification of depreciation rules for computers and software.

Sec. 205. Adjustments to depreciation limits for business vehicles.

Sec. 206. Increased deduction for business meal expenses.

Sec. 207. Modification of unrelated business income limitation on investment in

certain debt-financed properties.

Sec. 208. Repeal of alternative minimum tax on individuals.

Sec. 209. Exemption from alternative minimum tax for small corporations.

TITLE III—SMALL BUSINESS PROCUREMENTS

Sec. 301. Expansion of opportunity for small businesses to be awarded department of defense contracts for architectural and engineering

services and construction design.

Sec. 302. Procurements of property and services in amounts not in excess of

$100,000 from small businesses.

Sec. 303. Sole source procurements of property and services under the 2001

Emergency Supplemental Appropriations Act for Recovery

From and Response To Terrorist Attacks on the United

States.

3 TITLE I—SMALL BUSINESS

4 EMERGENCY LOAN ASSISTANCE

5 SEC. 101. SHORT TITLE.

6 This title may be cited as the ‘‘Small Business Emer7 gency Loan Assistance Act of 2001’’.

8 SEC. 102. DEFINITIONS.

9 In this title—
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1 (1) the term ‘‘Administration’’ means the Small

2 Business Administration;

3 (2) the term ‘‘covered loan’’ means a loan made

4 by the Administration to a small business concern—

5 (A) under section 7(b) of the Small Busi6 ness Act (15 U.S.C. 636(b)); and

7 (B) located in an area which the President

8 has designated as a disaster area as a result of

9 the terrorist attacks perpetrated against the

10 United States on September 11, 2001; and

11 (3) the term ‘‘small business concern’’ has the

12 same meaning as in section 3 of the Small Business

13 Act (15 U.S.C. 632).

14 SEC. 103. DEFERMENT OF DISASTER LOAN PAYMENTS.

15 (a) IN GENERAL.—Notwithstanding any other provi16 sion of law, payments of principal or interest on a covered

17 loan shall be deferred, and no interest shall accrue with

18 respect to a covered loan, during the 2-year period fol19 lowing the date of issuance of the covered loan.

20 (b) RESUMPTION OF PAYMENTS.—At the end of the

21 2-year period described in subsection (a), the payment of

22 periodic installments of principal and interest shall be re23 quired with respect to a covered loan, in the same manner

24 and subject to the same terms and conditions as would
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1 otherwise be applicable to a loan made under section 7(b)

2 of the Small Business Act (15 U.S.C. 636(b)).

3 SEC. 104. REFINANCING EXISTING DISASTER LOANS.

4 (a) IN GENERAL.—Any loan made under section 7(b)

5 of the Small Business Act (15 U.S.C. 636(b)) that was

6 outstanding as to principal or interest on September 11,

7 2001, may be refinanced by a small business concern that

8 is also eligible to receive a covered loan under this Act,

9 and the refinanced amount shall be considered to be part

10 of the covered loan for purposes of this title.

11 (b) NO AFFECT ON ELIGIBILITY.—A refinancing

12 under subsection (a) by a small business concern shall be

13 in addition to any covered loan eligibility for that small

14 business concern under this title.

15 SEC. 105. EMERGENCY RELIEF LOAN PROGRAM.

16 (a) BUSINESS LOAN AUTHORITY.—Section 7(a) of

17 the Small Business Act (15 U.S.C. 636(a)) is amended

18 by adding at the end the following:

19 ‘‘(31) TEMPORARY LOAN AUTHORITY FOL20 LOWING TERRORIST ATTACKS.—

21 ‘‘(A) IN GENERAL.—During the 1-year pe22 riod beginning on the date of enactment of this

23 paragraph, the Administration may make loans

24 under this subsection to a small business con25 cern that has suffered, or that is likely to suf-
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1 fer, significant economic injury as a result of

2 the terrorist attacks perpetrated against the

3 United States on September 11, 2001.

4 ‘‘(B) LOAN TERMS.—With respect to a

5 loan under this paragraph—

6 ‘‘(i) for purposes of paragraph (2)(A),

7 participation by the Administration shall

8 be equal to 95 percent of the balance of

9 the financing outstanding at the time of

10 disbursement of the loan;

11 ‘‘(ii) no fee may be required or

12 charged under paragraph (18);

13 ‘‘(iii) the applicable rate of interest

14 shall not exceed a rate that is one percent15 age point above the prime rate as pub16 lished in a national financial newspaper

17 published each business day;

18 ‘‘(iv) no such loan shall be made if the

19 total amount outstanding and committed

20 (by participation or otherwise) to the bor21 rower under this paragraph would exceed

22 $1,000,000;

23 ‘‘(v) upon request of the borrower, re24 payment of principal due on a loan made

25 under this paragraph shall be deferred
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1 during the 1-year period beginning on the

2 date of issuance of the loan; and

3 ‘‘(vi) the repayment period shall not

4 exceed 7 years, including any period of

5 deferment under clause (v).

6 ‘‘(C) APPLICABILITY.—The loan terms de7 scribed in subparagraph (B) shall apply to a

8 loan under this paragraph notwithstanding any

9 other provision of this subsection, and except as

10 specifically provided in this paragraph, a loan

11 under this paragraph shall otherwise be subject

12 to the same terms and conditions as any other

13 loan under this subsection.

14 ‘‘(D) SIGNIFICANT ECONOMIC INJURY.—In

15 this paragraph, the term ‘substantial economic

16 injury’ means an economic harm to a small

17 business concern that results in the inability of

18 the small business concern—

19 ‘‘(i) to meet its obligations as they

20 mature;

21 ‘‘(ii) to pay its ordinary and necessary

22 operating expenses; or

23 ‘‘(iii) to market, produce, or provide a

24 product or service ordinarily marketed,
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1 produced, or provided by the business con2 cern.’’.

3 SEC. 106. ECONOMIC RECOVERY LOAN AND FINANCING

4 PROGRAMS.

5 (a) ONE-YEAR SUSPENSION OF SECTION 7(a)

6 FEES.—Section 7(a)(18) of the Small Business Act (15

7 U.S.C. 636(a)(18)) is amended by adding at the end the

8 following:

9 ‘‘(C) ONE-YEAR WAIVER OF FEES FOL10 LOWING TERRORIST ATTACKS.—No fee may be

11 collected or charged, and no fee shall accrue

12 under this paragraph during the 1-year period

13 beginning on the date of enactment of the

14 Small Business Terrorism Relief and Economic

15 Stimulus Act of 2001.’’.

16 (b) ONE-YEAR INCREASE IN PARTICIPATION LEV17 ELS.—Section 7(a)(2) of the Small Business Act (15

18 U.S.C. 636(a)(2)) is amended—

19 (1) in subparagraph (A), by striking ‘‘subpara20 graph (B)’’ and inserting ‘‘subparagraphs (B) and

21 (E)’’; and

22 (2) by adding at the end the following:

23 ‘‘(E) TEMPORARY PARTICIPATION LEVELS

24 FOLLOWING TERRORIST ATTACKS.—During the

25 1-year period beginning on the date of enact-
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1 ment of the Small Business Terrorism Relief

2 and Economic Stimulus Act of 2001, clauses (i)

3 and (ii) of subparagraph (A) shall be construed

4 to read as follows:

5 ‘‘ ‘(i) 85 percent of the balance of the

6 financing outstanding at the time of dis7 bursement of the loan, if such balance ex8 ceeds $150,000; or

9 ‘‘ ‘(ii) 90 percent of the balance of the

10 financing outstanding at the time of dis11 bursement of the loan, if such balance is

12 less than or equal to $150,000.’.’’.

13 (c) ONE-YEAR SUSPENSION OF OTHER FEES.—Sec14 tion 503 of the Small Business Investment Act of 1958

15 (15 U.S.C. 697) is amended—

16 (1) in subsection (b)(7)(A), by striking ‘‘which

17 amount shall’’ and inserting ‘‘which amount shall

18 not be assessed or collected, and no amount shall ac19 crue, during the 1-year period beginning on the date

20 of enactment of the Small Business Terrorism Relief

21 and Economic Stimulus Act of 2001, and which

22 amount shall otherwise’’; and

23 (2) in subsection (d)(2), by adding at the end

24 the following: ‘‘No fee may be assessed or collected

25 under this paragraph, and no fee shall accrue, dur-
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1 ing the 1-year period beginning on the date of enact2 ment of the Small Business Terrorism Relief and

3 Economic Stimulus Act of 2001.’’.

4 TITLE II—SMALL BUSINESS TAX

5 PROVISIONS FOR ECONOMIC

6 STIMULUS

7 SEC. 201. AMENDMENT OF 1986 CODE.

8 Except as otherwise expressly provided, whenever in

9 this title an amendment or repeal is expressed in terms

10 of an amendment to, or repeal of, a section or other provi11 sion, the reference shall be considered to be made to a

12 section or other provision of the Internal Revenue Code

13 of 1986.

14 SEC. 202. INCREASE IN EXPENSE TREATMENT OF CERTAIN

15 DEPRECIABLE BUSINESS ASSETS FOR SMALL

16 BUSINESSES.

17 (a) IN GENERAL.—Section 179(b)(1) (relating to dol18 lar limitation) is amended to read as follows:

19 ‘‘(1) DOLLAR LIMITATION.—

20 ‘‘(A) IN GENERAL.—The aggregate cost

21 which may be taken into account under sub22 section (a) for any taxable year shall not exceed

23 $100,000.

24 ‘‘(B) INFLATION ADJUSTMENT.—In the

25 case of any taxable year beginning in a calendar
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1 year after 2001, the dollar amount contained in

2 subparagraph (A) shall be increased by an

3 amount equal to—

4 ‘‘(i) such dollar amount, multiplied by

5 ‘‘(ii) the cost-of-living adjustment de6 termined under section 1(f)(3) for the cal7 endar year in which the taxable year be8 gins, by substituting ‘‘calendar year 2000’’

9 for ‘‘calendar year 1992’’ in subparagraph

10 (B) thereof.

11 If any amount as adjusted under this subpara12 graph is not a multiple of $1,000, such amount

13 shall be rounded to the nearest multiple of

14 $1,000.’’.

15 (b) EXPANSION OF PHASE-OUT OF LIMITATION.—

16 Section 179(b)(2) is amended to read as follows:

17 ‘‘(2) REDUCTION IN LIMITATION.—

18 ‘‘(A) IN GENERAL.—The limitation under

19 paragraph (1) for any taxable year shall be re20 duced (but not below zero) by the amount by

21 which the cost of section 179 property for

22 which a deduction is allowable (without regard

23 to this subsection) under subsection (a) for

24 such taxable year exceeds $500,000.’’
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1 ‘‘(B) INFLATION ADJUSTMENT.—In the

2 case of any taxable year beginning in a calendar

3 year after 2001, the dollar amount contained in

4 subparagraph (A) shall be increased by an

5 amount equal to—

6 ‘‘(i) such dollar amount, multiplied by

7 ‘‘(ii) the cost-of-living adjustment de8 termined under section 1(f)(3) for the cal9 endar year in which the taxable year be10 gins, by substituting ‘‘calendar year 2000’’

11 for ‘‘calendar year 1992’’ in subparagraph

12 (B) thereof.

13 If any amount as adjusted under this subpara14 graph is not a multiple of $10,000, such

15 amount shall be rounded to the nearest multiple

16 of $10,000.’’.

17 (c) TIME OF DEDUCTION.—The second sentence of

18 section 179(a) (relating to election to expense certain de19 preciable business assets) is amended by inserting ‘‘(or,

20 if the taxpayer elects, the preceding taxable year if the

21 property was purchased in such preceding year)’’ after

22 ‘‘service’’.

23 (d) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to taxable years beginning after

25 December 31, 2000.
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1 SEC. 203. EXPENSING OF COMPUTER SOFTWARE.

2 (a) COMPUTER SOFTWARE ELIGIBLE FOR EXPENS3 ING.—The heading and first sentence of section 179(d)(1)

4 (relating to section 179 property) are amended to read as

5 follows:

6 ‘‘(1) SECTION 179 PROPERTY.—For purposes of

7 this section, the term ‘section 179 property’ means

8 property—

9 ‘‘(A) which is—

10 ‘‘(i) tangible property to which section

11 168 applies, or

12 ‘‘(ii) computer software (as defined in

13 section 197(e)(3)(B)) to which section 167

14 applies,

15 ‘‘(B) which is section 1245 property (as

16 defined in section 1245(a)(3)), and

17 ‘‘(C) which is acquired by purchase for use

18 in the active conduct of a trade or business.’’.

19 (b) NO COMPUTER SOFTWARE INCLUDED AS SEC20 TION 197 INTANGIBLE.—

21 (1) IN GENERAL.—Section 197(e)(3)(A) is

22 amended to read as follows:

23 ‘‘(A) IN GENERAL.—Any computer soft24 ware.’’.

25 (2) CONFORMING AMENDMENT.—Section

26 167(f)(1)(B) is amended by striking ‘‘; except that
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1 such term shall not include any such software which

2 is an amortizable section 197 intangible’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to property placed in service after

5 December 31, 2000.

6 SEC. 204. MODIFICATION OF DEPRECIATION RULES FOR

7 COMPUTERS AND SOFTWARE.

8 (a) 2-YEAR APPLICABLE RECOVERY PERIOD FOR

9 DEPRECIATION OF COMPUTERS AND PERIPHERAL EQUIP10 MENT.—

11 (1) IN GENERAL.—Section 168(c) (relating to

12 applicable recovery period) is amended by adding at

13 the end the following flush sentence:

14 ‘‘In the case of 5-year property which is a computer or

15 peripheral equipment, the applicable recovery period shall

16 be 2 years.’’.

17 (2) CONFORMING AMENDMENTS.—

18 (A) Section 168(g)(3)(C) (relating to alter19 native depreciation system for certain property)

20 is amended to read as follows:

21 ‘‘(C) QUALIFIED TECHNOLOGICAL EQUIP22 MENT.—

23 ‘‘(i) IN GENERAL.—Except as pro24 vided in clause (ii), in the case of any

25 qualified technological equipment, the re-
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1 covery period used for purposes of para2 graph (2) shall be 5 years.

3 ‘‘(ii) COMPUTERS OR PERIPHERAL

4 EQUIPMENT.—In the case of any computer

5 or peripheral equipment, the recovery pe6 riod used for purposes of paragraph (2)

7 shall be 2 years.’’.

8 (B) Section 168(j)(2) (relating to deprecia9 tion of property on Indian reservations) is

10 amended by adding at the end the following

11 flush sentence:

12 ‘‘In the case of 5-year property which is a computer or

13 peripheral equipment, the applicable recovery period shall

14 be 1 year.’’.

15 (C) Section 467(e)(3)(A) (relating to cer16 tain payments for the use of property or serv17 ices) is amended by adding at the end the fol18 lowing flush sentence:

19 ‘‘In the case of 5-year property which is a computer or

20 peripheral equipment, the applicable recovery period shall

21 be 2 years.’’.

22 (b) 2-YEAR DEPRECIATION PERIOD FOR COMPUTER

23 SOFTWARE.—Section 167(f)(1)(A) of the Internal Rev24 enue Code of 1986 is amended by striking ‘‘36 months’’

25 and inserting ‘‘24 months’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to property placed in service after

3 December 31, 2000.

4 SEC. 205. ADJUSTMENTS TO DEPRECIATION LIMITS FOR

5 BUSINESS VEHICLES.

6 (a) IN GENERAL.—

7 (1) INCREASE IN LIMITATION.—Section

8 280F(a)(1)(A) (relating to limitation on amount of

9 depreciation for luxury automobiles) is amended—

10 (A) by striking ‘‘$2,560’’ in clause (i) and

11 inserting ‘‘$5,400’’;

12 (B) by striking ‘‘$4,100’’ in clause (ii) and

13 inserting ‘‘$8,500’’;

14 (C) by striking ‘‘$2,450’’ in clause (iii) and

15 inserting ‘‘$5,100’’; and

16 (D) by striking ‘‘$1,475’’ in clause (iv) and

17 inserting ‘‘$3,000’’.

18 (2) CONFORMING AMENDMENT.—Section

19 280F(a)(1)(B)(ii) (relating to disallowed deductions

20 allowed for years after recovery period) is amended

21 by striking ‘‘$1,475’’ each place that it appears and

22 inserting ‘‘$3,000’’.

23 (b) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to property placed in service after

25 December 31, 2000.
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1 SEC. 206. INCREASED DEDUCTION FOR BUSINESS MEAL EX2 PENSES.

3 (a) IN GENERAL.—Section 274(n)(1) (relating to

4 only 50 percent of meal and entertainment expenses al5 lowed as deduction) is amended by striking ‘‘50 percent’’

6 in the text and inserting ‘‘the allowable percentage’’.

7 (b) ALLOWABLE PERCENTAGE.—Section 274(n) is

8 amended by redesignating paragraphs (2) and (3) as para9 graphs (3) and (4), respectively, and by inserting after

10 paragraph (1) the following new paragraph:

11 ‘‘(2) ALLOWABLE PERCENTAGE.—For purposes

12 of paragraph (1), the allowable percentage is—

13 ‘‘(A) in the case of amounts for items de14 scribed in paragraph (1)(B), 50 percent, and

15 ‘‘(B) in the case of expenses for food or

16 beverages, 100 percent.’’.

17 (c) CLARIFICATION OF SPECIAL RULE FOR INDIVID18 UALS SUBJECT TO FEDERAL HOURS OF SERVICE.—Sec19 tion 274(n)(4) (relating to limited percentages of meal and

20 entertainment expenses allowed as deduction), as redesig21 nated by subsection (b), is amended to read as follows:

22 ‘‘(4) SPECIAL RULE FOR INDIVIDUALS SUBJECT

23 TO FEDERAL HOURS OF SERVICE.—In the case of

24 any expenses for food or beverages consumed while

25 away from home (within the meaning of section

26 162(a)(2)) by an individual during, or incident to,
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1 the period of duty subject to the hours of service

2 limitations of the Department of Transportation,

3 paragraph (2)(B) shall apply to such expenses.’’.

4 (d) CONFORMING AMENDMENT.—The heading for

5 subsection (n) of section 274 is amended by striking ‘‘50

6 PERCENT’’ and inserting ‘‘LIMITED PERCENTAGES’’.

7 (e) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to taxable years beginning after

9 December 31, 2000.

10 SEC. 207. MODIFICATION OF UNRELATED BUSINESS IN11 COME LIMITATION ON INVESTMENT IN CER12 TAIN DEBT-FINANCED PROPERTIES.

13 (a) IN GENERAL.—Section 514(c)(6) (relating to ac14 quisition indebtedness) is amended—

15 (1) by striking ‘‘include an obligation’’ and in16 serting ‘‘include—

17 ‘‘(A) an obligation’’,

18 (2) by striking the period at the end and insert19 ing ‘‘, or’’, and

20 (3) by adding at the end the following:

21 ‘‘(B) indebtedness incurred by a small

22 business investment company licensed under the

23 Small Business Investment Act of 1958 which

24 is evidenced by a debenture—
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1 ‘‘(i) issued by such company under

2 section 303(a) of such Act, or

3 ‘‘(ii) held or guaranteed by the Small

4 Business Administration.’’.

5 (b) EFFECTIVE DATE.—The amendments made by

6 subsection (a) shall apply to acquisitions made on or after

7 the date of the enactment of this Act.

8 SEC. 208. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDI9 VIDUALS.

10 (a) IN GENERAL.—

11 (1) REPEAL.—Section 55(a) (relating to alter12 native minimum tax) is amended by adding at the

13 end the following new flush sentence:

14 ‘‘For purposes of this title, the tentative minimum tax on

15 any taxpayer other than a corporation for any taxable year

16 beginning after December 31, 2000, shall be zero.’’.

17 (2) NONREFUNDABLE PERSONAL CREDITS

18 FULLY ALLOWED AGAINST REGULAR TAX LIABIL19 ITY.—

20 (A) IN GENERAL.—Section 26(a) (relating

21 to limitation based on amount of tax) is amend22 ed to read as follows:

23 ‘‘(a) LIMITATION BASED ON AMOUNT OF TAX.—The

24 aggregate amount of credits allowed by this subpart for
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1 the taxable year shall not exceed the taxpayer’s regular

2 tax liability for the taxable year.’’.

3 (B) CHILD CREDIT.—Section 24(d) is

4 amended by striking paragraph (2) and by re5 designating paragraph (3) as paragraph (2).

6 (b) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to taxable years beginning after

8 December 31, 2000.

9 SEC. 209. EXEMPTION FROM ALTERNATIVE MINIMUM TAX

10 FOR SMALL CORPORATIONS.

11 (a) IN GENERAL.—Section 55(e)(1)(A) (relating to

12 exemption for small corporations) is amended to read as

13 follows:

14 ‘‘(A) $10,000,000 GROSS RECEIPTS

15 TEST.—The tentative minimum tax of a cor16 poration shall be zero for any taxable year if

17 the corporation’s average annual gross receipts

18 for all 3-taxable-year periods ending before such

19 taxable year does not exceed $10,000,000. For

20 purposes of the preceding sentence, only taxable

21 years beginning after December 31, 1997, shall

22 be taken into account.’’.

23 (b) GROSS RECEIPTS TEST FOR FIRST 3-YEAR PE24 RIOD.—Section 55(e)(1)(B) is amended to read as follows:
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1 ‘‘(B) $7,500,000 GROSS RECEIPTS TEST

2 FOR FIRST 3-YEAR PERIOD.—Subparagraph (A)

3 shall be applied by substituting ‘$7,500,000’ for

4 ‘$10,000,000’ for the first 3-taxable-year period

5 (or portion thereof) of the corporation which is

6 taken into account under subparagraph (A).’’.

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to taxable years beginning after

9 December 31, 2000.

10 TITLE III—SMALL BUSINESS

11 PROCUREMENTS

12 SEC. 301. EXPANSION OF OPPORTUNITY FOR SMALL BUSI13 NESSES TO BE AWARDED DEPARTMENT OF

14 DEFENSE CONTRACTS FOR ARCHITECTURAL

15 AND ENGINEERING SERVICES AND CON16 STRUCTION DESIGN.

17 Section 2855(b)(2) of title 10, United States Code,

18 is amended by striking ‘‘$85,000’’ and inserting

19 ‘‘$300,000’’.

20 SEC. 302. PROCUREMENTS OF PROPERTY AND SERVICES IN

21 AMOUNTS NOT IN EXCESS OF $100,000 FROM

22 SMALL BUSINESSES.

23 (a) SMALL BUSINESS SET-ASIDES.—Section 15 of

24 the Small Business Act (15 U.S.C. 644) is amended by

25 adding at the end the following:
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1 ‘‘(q) PROCUREMENTS OF PROPERTY AND SERVICES

2 NOT IN EXCESS OF $100,000.—

3 ‘‘(1) FEDERAL SUPPLY SCHEDULE ITEMS.—

4 The head of an agency procuring items listed on a

5 Federal Supply Schedule in a total amount not in

6 excess of $100,000 shall procure the items from a

7 small business.

8 ‘‘(2) OTHER PROPERTY AND SERVICES.—The

9 head of an agency procuring property or services not

10 listed on a Federal Supply Schedule in a total

11 amount not in excess of $100,000 shall procure the

12 property or services from a small business registered

13 on PRO-Net or the Centralized Contractor Registra14 tion System. Competitive procedures shall be used in

15 the selection of sources for procurements from small

16 businesses under this subsection.’’.

17 (b) PHASED IMPLEMENTATION.—

18 (1) FIRST 2 YEARS.—During the 2-year period

19 beginning on the effective date determined under

20 subsection (c), the requirement of subsection (q)(1)

21 of section 15 of the Small Business Act (as added

22 by subsection (a) of this section) shall apply with re23 spect to 25 percent of the procurements described in

24 that subsection (determined on the basis of amount),

25 and the requirement in subsection (q)(2) of that sec-
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1 tion shall apply with respect to 25 percent of the

2 procurements described in subsection (q)(2) (deter3 mined on the basis of amount).

4 (2) ENSUING 2 YEARS.—During the 2-year pe5 riod beginning on the day after the expiration of the

6 period described in paragraph (1), the requirement

7 of subsection (q)(1) of section 15 of the Small Busi8 ness Act (as added by subsection (a) of this section)

9 shall apply with respect to 50 percent of the pro10 curements described in that subsection (determined

11 on the basis of amount), and the requirement in

12 subsection (q)(2) of that section shall apply with re13 spect to 50 percent of the procurements described in

14 subsection (q)(2) (determined on the basis of

15 amount).

16 (c) EFFECTIVE DATE.—Section 15(q) of the Small

17 Business Act (as added by subsection (a) of this section)

18 shall take effect on the first day of the first month that

19 begins not less than 180 days after the date of enactment

20 of this Act.
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1 SEC. 303. SOLE SOURCE PROCUREMENTS OF PROPERTY

2 AND SERVICES UNDER THE 2001 EMERGENCY

3 SUPPLEMENTAL APPROPRIATIONS ACT FOR

4 RECOVERY FROM AND RESPONSE TO TER5 RORIST ATTACKS ON THE UNITED STATES.

6 Notwithstanding the provisions of sections

7 8(a)(1)(D)(i)(II) and subclauses (I) and (II) of section

8 31(b)(2)(A)(ii)( of the Small Business Act (15 U.S.C.

9 637(a)(1)(D)(i)(II), 658(b)(2)(A)(ii)(I), and 658

10 (b)(2)(A)(ii)(II), respectively), a contracting officer may

11 award non-competitive contracts with the budget authority

12 provided by the 2001 Emergency Supplemental Appro13 priations Act for Recovery From and Response To Ter14 rorist Attacks on the United States (Public Law 107–38)

15 or by subsequent emergency appropriations bill adopted

16 pursuant thereto, if—

17 (1) such contracts are to be awarded to an eli18 gible Program Participant under section 8(a) or to

19 a qualified HUBZone small business concern under

20 section 3(p)(5) of the Small Business Act (15

21 U.S.C. 637(a) and 632(p)(5)), and

22 (2) the head of the procuring agency certifies

23 that the property or services needed by the agency

24 are of such an unusual and compelling urgency that

25 the United States would be seriously harmed by use

26 of competitive procedures, pursuant to—
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1 (A) section 2304(c)(2) of title 10, United

2 States Code, or

3 (B) section 303(c)(2) of the Federal Prop4 erty and Administrative Services Act of 1949

5 (41 U.S.C. 253(c)(2)).

Æ