I 

111TH CONGRESS 

1ST SESSION H. R. 4343 

To establish in the Department of Commerce the Minority Business Development Program to provide qualified minority businesses with technical 

assistance, loan guarantees, and contracting opportunities, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 16, 2009 

Mr. RUSH introduced the following bill; which was referred to the Committee 

on Financial Services, and in addition to the Committee on Oversight and 

Government Reform, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To establish in the Department of Commerce the Minority 

Business Development Program to provide qualified minority businesses with technical assistance, loan guarantees, and contracting opportunities, 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. 

4 This Act may be cited as the ‘‘Minority Business De5 velopment Improvements Act of 2009’’. 


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1 SEC. 2. MINORITY BUSINESS DEVELOPMENT PROGRAM. 

2 The Director of the Minority Business Development 

3 Agency shall establish the Minority Business Development 

4 Program (hereinafter in this Act referred to as the ‘‘Pro5 gram’’) to assist qualified minority businesses. The Pro6 gram shall provide to such businesses the following: 

7 (1) Technical assistance. 

8 (2) Loan guarantees. 

9 (3) Contract procurement assistance. 

10 SEC. 3. QUALIFIED MINORITY BUSINESS. 

11 (a) CERTIFICATION.—For purposes of the Program, 

12 the Director may certify as a qualified minority business 

13 any entity that satisfies each of the following: 

14 (1) Not less than 51 percent of the entity is di15 rectly and unconditionally owned or controlled by 

16 historically disadvantaged individuals. 

17 (2) Each officer or other individual who exer18 cises control over the regular operations of the entity 

19 is a historically disadvantaged individual. 

20 (3) The net worth of each principal of the enti21 ty is not greater than $2,000,000. (The equity of a 

22 disadvantaged owner in a primary personal residence 

23 shall be considered in this calculation.) 

24 (4) The principal place of business of the entity 

25 is in the United States. 


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1 (5) Each principal of the entity maintains good 

2 character in the determination of the Director. 

3 (6) The entity engages in competitive and bona 

4 fide commercial business operations in not less than 

5 one sector of industry that has a North American 

6 Industry Classification System code. 

7 (7) The entity submits reports to the Director 

8 at such time, in such form, and containing such in9 formation as the Director may require. 

10 (8) Any additional requirements that the Direc11 tor determines appropriate. 

12 (b) TERM OF CERTIFICATION.—A certification under 

13 this section shall be for a term of 5 years and may not 

14 be renewed. 

15 SEC. 4. TECHNICAL ASSISTANCE. 

16 (a) IN GENERAL.—In carrying out the Program, the 

17 Director may provide to qualified minority businesses 

18 technical assistance with regard to the following: 

19 (1) Writing business plans. 

20 (2) Marketing. 

21 (3) Management. 

22 (4) Securing sufficient financing for business 

23 operations. 


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1 (b) CONTRACT AUTHORITY.—The Director may enter 

2 into agreements with persons to provide technical assist3 ance under this section. 

4 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated $200,000,000 to the Di6 rector to carry out this section. Such sums shall remain 

7 available until expended. 

8 SEC. 5. LOAN GUARANTEES. 

9 (a) IN GENERAL.—Subject to subsection (b), the Di10 rector may guarantee up to 90 percent of the amount of 

11 a loan made to a qualified minority business to be used 

12 for business purposes, including the following: 

13 (1) Purchasing essential equipment. 

14 (2) Payroll expenses. 

15 (3) Purchasing facilities. 

16 (4) Renovating facilities. 

17 (b) TERMS AND CONDITIONS.— 

18 (1) IN GENERAL.—The Director may make 

19 guarantees under this section for projects on such 

20 terms and conditions as the Director determines ap21 propriate, after consultation with the Secretary of 

22 the Treasury, in accordance with this section. 

23 (2) REPAYMENT.—No guarantee shall be made 

24 under this section unless the Director determines 

25 that there is reasonable prospect of repayment of the 


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1 principal and interest on the obligation by the bor2 rower. 

3 (3) DEFAULTS.— 

4 (A) PAYMENT BY DIRECTOR.— 

5 (i) IN GENERAL.—If a borrower de6 faults on the obligation (as defined in reg7 ulations promulgated by the Director and 

8 specified in the guarantee contract), the 

9 holder of the guarantee shall have the 

10 right to demand payment of the unpaid 

11 amount from the Director. 

12 (ii) PAYMENT REQUIRED.—Within 

13 such period as may be specified in the 

14 guarantee or related agreements, the Di15 rector shall pay to the holder of the guar16 antee the unpaid interest on, and unpaid 

17 principal of the obligation as to which the 

18 borrower has defaulted, unless the Director 

19 finds that there was no default by the bor20 rower in the payment of interest or prin21 cipal or that the default has been rem22 edied. 

23 (iii) FORBEARANCE.—Nothing in this 

24 paragraph precludes any forbearance by 

25 the holder of the obligation for the benefit 


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1 of the borrower which may be agreed upon 

2 by the parties to the obligation and ap3 proved by the Director. 

4 (B) SUBROGATION.— 

5 (i) IN GENERAL.—If the Director 

6 makes a payment under subparagraph (A), 

7 the Director shall be subrogated to the 

8 rights of the recipient of the payment as 

9 specified in the guarantee or related agree10 ments including, where appropriate, the 

11 authority (notwithstanding any other pro12 vision of law) to— 

13 (I) complete, maintain, operate, 

14 lease, or otherwise dispose of any 

15 property acquired pursuant to such 

16 guarantee or related agreements; or 

17 (II) permit the borrower, pursu18 ant to an agreement with the Direc19 tor, to continue to pursue the pur20 poses of the project if the Director de21 termines this to be in the public inter22 est. 

23 (ii) SUPERIORITY OF RIGHTS.—The 

24 rights of the Director, with respect to any 

25 property acquired pursuant to a guarantee 


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1 or related agreements, shall be superior to 

2 the rights of any other person with respect 

3 to the property. 

4 (iii) TERMS AND CONDITIONS.—A 

5 guarantee agreement shall include such de6 tailed terms and conditions as the Director 

7 determines appropriate to— 

8 (I) protect the interests of the 

9 United States in the case of default; 

10 and 

11 (II) have available all the patents 

12 and technology necessary for any per13 son selected, including the Director, to 

14 complete and operate the project. 

15 (C) PAYMENT OF PRINCIPAL AND INTER16 EST BY DIRECTOR.—With respect to any obliga17 tion guaranteed under this section, the Director 

18 may enter into a contract to pay, and pay, hold19 ers of the obligation, for and on behalf of the 

20 borrower, from funds appropriated for that pur21 pose, the principal and interest payments which 

22 become due and payable on the unpaid balance 

23 of the obligation if the Director finds that— 

24 (i)(I) the borrower is unable to meet 

25 the payments and is not in default; 


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1 (II) it is in the public interest to 

2 permit the borrower to continue to 

3 pursue the purposes of the project; 

4 and 

5 (III) the probable net benefit to 

6 the Federal Government in paying the 

7 principal and interest will be greater 

8 than that which would result in the 

9 event of a default; 

10 (ii) the amount of the payment that 

11 the Director is authorized to pay shall be 

12 no greater than the amount of principal 

13 and interest that the borrower is obligated 

14 to pay under the agreement being guaran15 teed; and 

16 (iii) the borrower agrees to reimburse 

17 the Director for the payment (including in18 terest) on terms and conditions that are 

19 satisfactory to the Director. 

20 (D) ACTION BY ATTORNEY GENERAL.— 

21 (i) NOTIFICATION.—If the borrower 

22 defaults on an obligation, the Director 

23 shall notify the Attorney General of the de24 fault. 


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1 (ii) RECOVERY.—On notification, the 

2 Attorney General shall take such action as 

3 is appropriate to recover the unpaid prin4 cipal and interest due from— 

5 (I) such assets of the defaulting 

6 borrower as are associated with the 

7 obligation; or 

8 (II) any other security pledged to 

9 secure the obligation. 

10 (4) FEES.— 

11 (A) IN GENERAL.—The Director shall 

12 charge and collect fees for guarantees in 

13 amounts the Director determines are sufficient 

14 to cover applicable administrative expenses, not 

15 to exceed 1 percent of the amount guaranteed. 

16 (B) AVAILABILITY.—Fees collected under 

17 this paragraph shall— 

18 (i) be deposited by the Director into 

19 the Treasury; and 

20 (ii) remain available until expended, 

21 subject to such other conditions as are con22 tained in annual appropriations Acts. 

23 (c) CREDIT REQUIREMENTS.—To receive a loan 

24 guaranteed under this section a qualified minority busi25 ness shall— 


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1 (1) be in good standing with regard to the cred2 it of that business in the determination of the Direc3 tor; 

4 (2) have received technical assistance under sec5 tion 4; and 

6 (3) submit reports, at such time, in such form, 

7 and containing such information as the Director 

8 may require regarding the credit of the business. 

9 (d) LIMITS ON GUARANTEE AMOUNTS.— 

10 (1) MAXIMUM AMOUNT OF GUARANTEE.—The 

11 Director may guarantee not more than $450,000 of 

12 any loan under this section. 

13 (2) MAXIMUM GROSS LOAN AMOUNT.—A loan 

14 guaranteed under this section may not be for a gross 

15 loan amount in excess of $500,000. 

16 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated to the Director not more 

18 than $500,000,000 to carry out this section during fiscal 

19 years 2011 through 2016. 

20 SEC. 6. SET-ASIDE CONTRACTING OPPORTUNITIES. 

21 (a) IN GENERAL.—The Director may enter into 

22 agreements with the United States Government and any 

23 department, agency, or officer thereof having procurement 

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1 curement contracts and providing opportunities for quali2 fied minority businesses with regard to such contracts. 

3 (b) QUALIFICATIONS ON PARTICIPATION.—The Di4 rector shall by rule establish requirements for participa5 tion under this section by a qualified minority business 

6 in a contract. 

7 (c) ANNUAL LIMIT ON NUMBER OF CONTRACTS PER

8 QUALIFIED MINORITY BUSINESS.—A qualified minority 

9 business may not participate under this section in con10 tracts in an amount that exceeds $10,000,000 for goods 

11 and services each fiscal year. 

12 (d) LIMITS ON CONTRACT AMOUNTS.— 

13 (1) GOODS AND SERVICES.—Except as provided 

14 in paragraph (2), a contract for goods and services 

15 under this section may not exceed $6,000,000. 

16 (2) MANUFACTURING AND CONSTRUCTION.—A 

17 contract for manufacturing and construction services 

18 under this section may not exceed $10,000,000. 

19 SEC. 7. TERMINATION FROM THE PROGRAM. 

20 The Director may terminate a qualified minority 

21 business from the Program for any violation of a require22 ment of sections 3 through 6 of this Act by that qualified 

23 minority business, including the following: 


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1 (1) Conduct by a principal of the qualified mi2 nority business that indicates a lack of business in3 tegrity. 

4 (2) Willful failure to comply with applicable 

5 labor standards and obligations. 

6 (3) Consistent failure to tender adequate per7 formance with regard to contracts under the Pro8 gram. 

9 (4) Failure to obtain and maintain relevant cer10 tifications. 

11 (5) Failure to pay outstanding obligations owed 

12 to the Federal Government. 

13 SEC. 8. REPORTS. 

14 (a) REPORT OF THE DIRECTOR.—Not later than Oc15 tober 1, 2011, and annually thereafter, the Director shall 

16 submit to the Committee on Energy and Commerce of the 

17 House of Representatives and the Committee on Com18 merce, Science, and Transportation of the Senate a report 

19 describing the activities of the Director during the pre20 ceding year with respect to the Program. 

21 (b) REPORT OF THE SECRETARY OF COMMERCE.— 

22 Not later than October 1, 2011, and annually thereafter, 

23 the Secretary of Commerce shall submit to the Committee 

24 on Energy and Commerce of the House of Representatives 

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1 tation of the Senate a report describing the activities the 

2 Secretary engaged in during the preceding year to build 

3 wealth among historically disadvantaged individuals. 

4 SEC. 9. DEFINITIONS. 

5 In this Act: 

6 (1) The term ‘‘historically disadvantaged indi7 vidual’’ means any individual who is a member of a 

8 group that is designated as eligible to receive assist9 ance under section 1400.1 of title 15 of the Code of 

10 Federal Regulations, as in effect on January 1, 

11 2009. 

12 (2) The term ‘‘principal’’ means any person 

13 that the Director determines to exercise significant 

14 control over the regular operations of a business en15 tity. 

Æ 


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