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103D CONGRESS

1ST SESSION H. R. 1057

To protect and promote small business concerns.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 23, 1993

Mrs. MEYERS of Kansas introduced the following bill; which was referred

jointly to the Committees on Ways and Means, Small Business, the Judiciary, Rules, and Education and Labor

A BILL

To protect and promote small business concerns.

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.

4 This Act may be cited as the ‘‘Omnibus Small Busi5 ness Promotion and Protection Act of 1993’’.

6 TITLE I—SMALL BUSINESS TAX

7 INCENTIVES

8 SEC. 101. RESEARCH CREDIT.

9 (a) IN GENERAL.—Section 41 of the Internal Reve10 nue Code of 1986 (relating to credit for increasing re11 search activities) is amended by striking subsection (h).
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1 (b) CONFORMING AMENDMENT.—Paragraph (1) sec2 tion 28(b) of such Code is amended by striking subpara3 graph (D).

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

5 this section shall apply to taxable years ending after June

6 30, 1992.

7 SEC. 102. TARGETED JOBS CREDIT.

8 (a) IN GENERAL.—Subsection (c) of section 51 of the

9 Internal Revenue Code of 1986 (relating to amount of tar10 geted jobs credit) is amended by striking paragraph (4).

11 (b) EFFECTIVE DATE.—The amendment made by

12 subsection (a) shall apply to individuals who begin work

13 for the employer after June 30, 1992.

14 SEC. 103. QUALIFIED SMALL ISSUE BONDS.

15 (a) IN GENERAL.—Subparagraph (B) of section

16 144(a)(12) of the Internal Revenue Code of 1986 is

17 amended to read as follows:

18 ‘‘(B) BONDS ISSUED TO FINANCE

19 MANUFACTURING FACILITIES AND FARM

20 PROPERTY.—Subparagraph (A) shall not

21 apply to any bond issued as part of an

22 issue 95 percent or more of the net pro23 ceeds of which are to be used to provide—

24 ‘‘(i) any manufacturing facility, or
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1 ‘‘(ii) any land or property in accord2 ance with section 147(c)(2).’’

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply to bonds issued after June 30,

5 1992.

6 SEC. 104. EMPLOYER-PROVIDED EDUCATIONAL ASSIST7 ANCE.

8 (a) IN GENERAL.—Section 127 of the Internal Reve9 nue Code of 1986 (relating to educational assistance pro10 grams) is amended by striking subsection (d) and by re11 designating subsection (e) as subsection (d).

12 (b) CONFORMING AMENDMENT.—Paragraph (2) of

13 section 103(a) of the Tax Extension Act of 1991 is hereby

14 repealed.

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

16 this section shall apply to taxable years beginning after

17 June 30, 1992.

18 SEC. 105. DEDUCTION FOR HEALTH INSURANCE COSTS OF

19 SELF-EMPLOYED INDIVIDUALS INCREASED

20 AND MADE PERMANENT.

21 (a) IN GENERAL.—Paragraph (1) of section 162(l)

22 of the Internal Revenue Code of 1986 (relating to special

23 rules for health insurance costs of self-employed individ24 uals) is amended by striking ‘‘25 percent of’’.
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1 (b) DEDUCTION MADE PERMANENT.—Paragraph (6)

2 of section 162(l) of such Code is hereby repealed.

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

4 this section shall apply to taxable years beginning after

5 June 30, 1992.

6 TITLE II—INCREASE OF NUMBER

7 OF PERMITTED S CORPORA8 TION SHAREHOLDERS

9 SEC. 201. INCREASE OF NUMBER OF PERMITTED S COR10 PORATION SHAREHOLDERS.

11 (a) IN GENERAL.—Subparagraph (A) of section

12 1361(b)(1) of the Internal Revenue Code of 1986 (defin13 ing small business corporation) is amended by striking

14 ‘‘35 shareholders’’ and inserting ‘‘50 shareholders’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 this section shall take effect on the date of the enactment

17 of this Act.

18 TITLE III—WOMEN-OWNED

19 SMALL BUSINESS CONCERNS

20 SEC. 301. PARTICIPATION IN SUBCONTRACTING PRO21 GRAMS.

22 (a) ELIGIBILITY REQUIREMENTS.—

23 (1) DEFINITION OF SOCIALLY DISADVANTAGED

24 SMALL BUSINESS CONCERN.—Section 8(a)(5) of the

25 Small Business Act (15 U.S.C. 637(a)(5)) is amend-
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1 ed by striking ‘‘racial or ethnic prejudice’’ and in2 serting ‘‘racial, ethnic, or gender-based prejudice’’.

3 (2) PRESUMPTION OF SOCIAL DISADVANTAGE

4 UNDER CONTRACT CLAUSE.—The contract clause

5 specified in section (8)(d)(3) of the Small Business

6 Act (15 U.S.C. 637(d)(3)) is amended by striking

7 ‘‘and other minorities’’ in subparagraph (C) of such

8 clause and inserting ‘‘other minorities, and women’’.

9 (b) TREATMENT OF COMMUNITY PROPERTY LAWS.—

10 The Small Business Act (15 U.S.C. 631 et seq.) is amend11 ed—

12 (1) in section 8(a)(4) by adding at the end the

13 following new subparagraph:

14 ‘‘(D) The community property laws of a

15 jurisdiction shall not be applied in determining

16 whether a small business concern meets the re17 quirements of this paragraph with regard to

18 ownership and control.’’;

19 (2) in section 8(a)(6)(E)—

20 (A) by striking the period at the end of

21 clause (ii) and inserting ‘‘; and’’; and

22 (B) by adding at the end the following new

23 clause:

24 ‘‘(iii) the value of any property which

25 is owned by a disadvantaged owner solely
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1 on the basis of application of the commu2 nity property laws of a jurisdiction.’’; and

3 (3) in the contract clause specified in section

4 (8)(d)(3) by adding at the end of subparagraph (C)

5 of such clause the following new sentence: ‘‘The

6 community property laws of a jurisdiction shall not

7 be applied in determining whether a small business

8 concern meets the requirements of this subpara9 graph with regard to ownership and control.’’.

10 TITLE IV—PREPAYMENT OF DE11 VELOPMENT COMPANY DE12 BENTURES

13 SEC. 401. PREPAYMENT OF DEVELOPMENT COMPANY DE14 BENTURES.

15 (a) IN GENERAL.—Title V of the Small Business In16 vestment Act of 1958 (15 U.S.C. 695 et seq.) is amended

17 by adding at the end the following new section:

18 ‘‘SEC. 507. PREPAYMENT OF DEVELOPMENT COMPANY DE19 BENTURES.

20 ‘‘(a) IN GENERAL.—(1) If the requirements of sub21 section (b) are met, the issuer of a debenture purchased

22 by the Federal Financing Bank and guaranteed by the

23 Administration under section 503 may, at the election of

24 the borrower whose loan secures such debenture, prepay

25 such debenture by paying to the Federal Financing Bank,
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1 not later than 2 years after the date of the enactment of

2 this section, the amount that is equal to the sum of the

3 unpaid principal balance (plus accrued interest at the cou4 pon rate on the debenture) due on the debenture on the

5 date of prepayment and the amount of the penalty de6 scribed in paragraph (2)(A).

7 ‘‘(2)(A) The amount of the penalty described in this

8 paragraph is the amount described in subparagraph (B)

9 reduced by any fees paid pursuant to subsection (d)(2).

10 ‘‘(B) The amount described in this subparagraph is

11 the amount equal to the original principal amount of the

12 debenture—

13 ‘‘(i) multiplied by the interest rate of the deben14 ture;

15 ‘‘(ii) multiplied by the number of years remain16 ing to maturity on the debenture; and

17 ‘‘(iii) divided by the number of years to matu18 rity on the debenture when the debenture was origi19 nally issued.

20 ‘‘(b) REQUIREMENTS.—The requirements of this sub21 section are met if—

22 ‘‘(1) the debenture referred to in subsection (a)

23 is outstanding on the date of the enactment of this

24 section and neither the debenture nor the borrower’s
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1 loan that secures the debenture is in default on the

2 date of prepayment;

3 ‘‘(2) only non-Federal funds are used to prepay

4 the debenture;

5 ‘‘(3) the issuer extinguishes the borrower’s loan

6 which secured such debenture;

7 ‘‘(4) in the case of prepayment of a debenture

8 in which a new debenture is issued and guaranteed

9 by the Administration under section 503 and sold

10 under section 504 (or the Administration issues a

11 trust certificate representing ownership in such new

12 debenture under section 505) for the purpose of

13 such prepayment, the issuer certifies that it will

14 waive any origination fee on the new debenture to

15 which it otherwise would have been entitled; and

16 ‘‘(5) the borrower certifies that it will pay to

17 the issuer the amount of the penalty referred to in

18 subsection (a)(2)(A).

19 ‘‘(c) TRANSFER OF GUARANTEE.—

20 ‘‘(1) IN GENERAL.—Notwithstanding any other

21 law, in the case of prepayment of a debenture under

22 subsection (a) in which a new debenture is issued by

23 a qualified State or local development company and

24 guaranteed by the Administration under section 503

25 and sold under section 504 (or the Administration
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1 issues a trust certificate representing ownership in

2 such new debenture under section 505) for the pur3 pose of such prepayment, the guarantee by the Ad4 ministration under section 503 of the original deben5 ture shall transfer to the new debenture, and the

6 transfer of such guarantee shall not be treated as

7 new credit authority.

8 ‘‘(2) FULL FAITH AND CREDIT OF THE UNITED

9 STATES.—The full faith and credit of the United

10 States shall continue to be pledged to the payment

11 of all amounts which may be required to be paid

12 under any guarantee of a new debenture or trust

13 certificate referred to in paragraph (1).

14 ‘‘(d) FEES.—

15 ‘‘(1) IN GENERAL.—Notwithstanding any other

16 law and subject to paragraph (2), no fees or pen17 alties other than those specified in this section may

18 be imposed as a condition of prepayment under sub19 section (a) against the issuer, the borrower, or the

20 Administration.

21 ‘‘(2) OPTIONAL FEES.—The issuer may require

22 the borrower to pay a fee to the issuer in an amount

23 equal to—

24 ‘‘(A) in cases other than the case described

25 in subparagraph (B), 1 percent of the sum of
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1 the unpaid principal balance and the accrued

2 interest (at the coupon rate on the debenture)

3 due on the debenture on the date of prepay4 ment; and

5 ‘‘(B) in the case of prepayment of a deben6 ture under subsection (a) in accordance with

7 the method described in subsection (c)(1), one8 half of 1 percent of the sum of the unpaid prin9 cipal balance and the accrued interest (at the

10 coupon rate on the debenture) due on the de11 benture on the date of prepayment.

12 ‘‘(e) DEFAULT OF LOAN SECURING DEBENTURE.—

13 If a borrower defaults on a loan securing a debenture is14 sued under section 503, including a default which occurred

15 before the date of the enactment of this section, the Ad16 ministration’s guarantee under section 503 shall be extin17 guished by payment by the Administration to the Federal

18 Financing Bank of the remaining principal balance plus

19 accrued interest at the coupon rate on the debenture.

20 ‘‘(f) DEFINITIONS.—For purposes of this section, the

21 following definitions apply:

22 ‘‘(1) BORROWER.—The term ‘borrower’ means

23 a small business concern.

24 ‘‘(2) CREDIT AUTHORITY AND NEW BUDGET

25 AUTHORITY.—The terms ‘credit authority’ and ‘new
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1 budget authority’ have the meanings given such

2 terms in section 3 of the Congressional Budget Act

3 of 1974.

4 ‘‘(3) ISSUER.—The term ‘issuer’ means a quali5 fied State or local development company.

6 ‘‘(4) QUALIFIED STATE OR LOCAL DEVELOP7 MENT COMPANY.—The term ‘qualified State or local

8 development company’ has the meaning given such

9 term in section 503(e).’’.

10 (b) CLERICAL AMENDMENT.—The table of contents

11 of title V of the Small Business Investment Act of 1958

12 is amended by adding at the end the following new item:

‘‘Sec. 507. Prepayment of development company debentures.’’.

13 TITLE V—CABINET LEVEL STA14 TUS FOR SBA ADMINIS15 TRATOR

16 SEC. 501. PARTICIPATION IN CABINET.

17 It is the sense of the Congress that the Administrator

18 of the Small Business Administration should be des19 ignated by the President—

20 (1) as a member of, and a full participant in

21 activities of, the Cabinet; and

22 (2) as the President’s principal adviser on all

23 matters relating to small business.
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1 SEC. 502. PAY STATUS COMMENSURATE WITH CABINET

2 STATUS.

3 (a) EXECUTIVE LEVEL I.—Section 5312 of title 5,

4 United States Code (relating to executive level I), is

5 amended by adding at the end the following new item:

6 ‘‘Administrator of the Small Business Adminis7 tration.’’.

8 (b) CONFORMING AMENDMENT.—Section 5314 of

9 such title (relating to executive level III) is amended by

10 striking the following item:

11 ‘‘Administrator of the Small Business Adminis12 tration.’’.

13 TITLE VI—ASSISTANT UNITED

14 STATES TRADE REPRESENTA15 TIVE FOR SMALL BUSINESS

16 SEC. 601. SENSE OF CONGRESS.

17 It is the sense of Congress that the United States

18 Trade Representative should establish a new position of

19 Assistant United States Trade Representative for Small

20 Business to promote exports by small businesses and to

21 remove foreign impediments to the success of such under22 takings.
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1 TITLE VII—JUDICIAL REVIEW

2 UNDER REGULATORY FLEXI3 BILITY ACT

4 SEC. 701. JUDICIAL REVIEW UNDER REGULATORY FLEXI5 BILITY ACT.

6 (a) IN GENERAL.—Section 611 of title 5, United

7 States Code, is repealed.

8 (b) CLERICAL AMENDMENT.—The table of sections

9 at the beginning of chapter 6 of title 5, United States

10 Code, is amended by striking the item relating to section

11 611.

12 TITLE VIII—CONGRESSIONAL

13 BUDGET OFFICE SMALL BUSI14 NESS LEGISLATIVE COST

15 ANALYSIS

16 SEC. 801. CONGRESSIONAL BUDGET OFFICE COST ANALY17 SIS.

18 (a) CBO ANALYSIS.—Title IV of the Congressional

19 Budget Act of 1974 (2 U.S.C. 651 et seq.) is amended

20 by inserting after section 403 the following new section:

21 ‘‘SMALL BUSINESS COST ANALYSIS BY CONGRESSIONAL

22 BUDGET OFFICE

23 ‘‘SEC. 404. (a) The Director of the Congressional

24 Budget Office shall, to the extent practicable, prepare for

25 each bill or resolution of a public character reported by
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1 any committee of the House of Representatives or the Sen2 ate (except the Committee on Appropriations of each

3 House), and submit to such committee—

4 ‘‘(1) an estimate of the costs which would be in5 curred in carrying out such bill or resolution in the

6 fiscal year in which it is to become effective and in

7 each of the 4 fiscal years following such fiscal year,

8 together with the basis for each such estimate;

9 ‘‘(2) an estimate of the cost which would be in10 curred by small businesses in carrying out or com11 plying with any significant bill or resolution in the

12 fiscal year in which it is to become effective and in

13 each of the 4 fiscal years following such fiscal year,

14 together with the basis for each such estimate; and

15 ‘‘(3) a comparison of the estimates of costs de16 scribed in paragraphs (1) and (2) with any available

17 estimates of costs made by such committee or by a

18 Federal agency.

19 The estimates, comparison, and description so submitted

20 shall be included in the report accompanying such bill or

21 resolution if timely submitted to such committee before

22 such report is filed.

23 ‘‘(b) For purposes of subsection (a)(2), the term

24 ‘small business’ has the same meaning as the term ‘small-
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1 business concern’ in section 3(a) of the Small Business

2 Act (15 U.S.C. 632(a)).

3 ‘‘(c) For purposes of subsection (a)(2), the term ‘sig4 nificant bill or resolution’ is defined as any bill or resolu5 tion which in the judgment of the Director of the Congres6 sional Budget Office is likely to result in an average an7 nual cost to a small business of $1,000 or more, or is likely

8 to have exceptional fiscal consequences for a geographic

9 region or a particular industry segment.’’.

10 (b) CONFORMING AMENDMENT.—The table of con11 tents set forth in section 2(b) of the Congressional Budget

12 and Impoundment Control Act of 1974 is amended by in13 serting after the item relating to section 404 the following

14 new item:

‘‘Sec. 403. Small business cost analysis by Congressional Budget Office.’’.

15 TITLE IX—RELIEF FROM RETRO16 ACTIVE APPLICATION OF

17 TREASURY DEPARTMENT

18 REGULATIONS AND RULINGS

19 SEC. 901. RULES AND REGULATIONS.

20 (a) IN GENERAL.—Subsection (b) of section 7805 of

21 the Internal Revenue Code is amended to read as follows:

22 ‘‘(b) RETROACTIVITY OF REGULATIONS OR RUL23 INGS.—

24 ‘‘(1) IN GENERAL.—All final, temporary, or

25 proposed regulations and rulings issued by the Sec-
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1 retary shall apply prospectively from the date of

2 publication of such regulation or ruling in the Fed3 eral Register.

4 ‘‘(2) CONGRESSIONAL AUTHORIZATION.—The

5 prospective only treatment of paragraph (1) may be

6 superseded by a specific legislative grant from Con7 gress authorizing the Secretary to prescribe the ef8 fective date with respect to a statutory provision.’’.

9 (b) EFFECTIVE DATE.—The amendment made by

10 this section shall apply to any temporary or proposed regu11 lation published as a final regulation after the date of the

12 enactment of this Act.

13 TITLE X—STUDY OF IMPACT OF

14 REGULATORY ANALYSIS

15 UPON SMALL BUSINESS

16 SEC. 1001. STUDY.

17 The Chief Counsel for Advocacy of the Small Busi18 ness Administration shall conduct a study of the impact

19 of all Federal regulatory paperwork and tax requirements

20 upon small business and report its findings to the Con21 gress within one year of the date of the enactment of this

22 Act.
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1 TITLE XI—FAIR LABOR

2 STANDARDS ACT

3 SEC. 1101. APPLICATION OF FAIR LABOR STANDARDS ACT

4 OF 1938.

5 (a) MINIMUM WAGE.—

6 (1) SPECIAL INDUSTRY COMMITTEES.—Section

7 5(a) of the Fair Labor Standards Act of 1938 (29

8 U.S.C. 205(a)) is amended—

9 (A) by striking out ‘‘engaged in commerce

10 or in the production of goods for commerce, or

11 employed in any enterprise engaged in com12 merce or in the production of goods for com13 merce’’ and inserting in lieu thereof the follow14 ing: ‘‘who are (1) engaged in industrial home15 work subject to 11(d), or (2) either engaged in

16 commerce or engaged in the production of

17 goods for commerce or employed in an enter18 prise engaged in commerce or in the production

19 of goods for commerce’’; and

20 (B) by striking out ‘‘engaged in commerce

21 or in the production of goods for commerce in

22 particular industries’’ and inserting in lieu

23 thereof ‘‘so engaged’’.

24 (2) MINIMUM WAGE.—Section 6(a) of the Fair

25 Labor Standards Act of 1938 (29 U.S.C. 206(a)) is
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1 amended by striking out ‘‘who in any workweek is

2 engaged in commerce or in the production of goods

3 for commerce, or is employed in an enterprise en4 gaged in commerce or in the production of goods for

5 commerce’’ and inserting in lieu thereof the follow6 ing: ‘‘who in any workweek is engaged in industrial

7 homework subject to 11(d) or either engaged in com8 merce or engaged in the production of goods for

9 commerce or employed in an enterprise engaged in

10 commerce or in the production of goods for com11 merce’’.

12 (3) WAGE ORDERS.—Section 8(a) of the Fair

13 Labor Standards Act of 1938 (29 U.S.C. 208(a)) is

14 amended by striking out ‘‘employers in American

15 Samoa engaged in commerce or in the production of

16 goods for commerce or in any enterprise engaged in

17 commerce or in the production of goods for com18 merce’’ and inserting in lieu thereof ‘‘employers in

19 American Samoa’’.

20 SEC. 1102. MAXIMUM HOURS.

21 Paragraphs (1) and (2) of section 7(a) of the Fair

22 Labor Standards Act of 1938 (29 U.S.C. 207(a)) are each

23 amended by striking the phrase ‘‘who in any workweek

24 is engaged in commerce or in the production of goods for

25 commerce, or is employed in an enterprise engaged in
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1 commerce or in the production of goods for commerce’’

2 and inserting in lieu thereof the following: ‘‘who in any

3 workweek is (A) engaged in industrial homework subject

4 to 11(d), or (B) either engaged in commerce or engaged

5 in the production of goods for commerce or employed in

6 an enterprise engaged in commerce or in the production

7 of goods for commerce’’.

8 TITLE XII—INDEPENDENT

9 CONTRACTORS

10 SEC. 1201. SENSE OF CONGRESS.

11 It is the sense of Congress that the Internal Revenue

12 Service, in conjunction with the Office of Advocacy of the

13 Small Business Administration, and in cooperation with

14 the appropriate committees of Congress, should adopt ob15 jective, reasonable standards to determine independent

16 contractor status.

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