103D CONGRESS

2D SESSION S. 2060

AN ACT

To amend the Small Business Act and the Small

purposes.Business Investment Act of 1958, and for other
103D CONGRESS

2D SESSION S. 2060

AN ACT

To amend the Small Business Act and the Small Business

Investment Act of 1958, and for other purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Small Business Administration Reauthorization and

6 Amendment Act of 1994’’.
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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—AUTHORIZATIONS

Sec. 101. Authorizations.

TITLE II—FINANCIAL ASSISTANCE PROGRAMS

Sec. 201. Microloan financing pilot.

Sec. 202. Eligibility of Native American tribal governments to be microloan

intermediaries.

Sec. 203. Microloan program extension.

Sec. 204. Microloan program funding and State limitations.

Sec. 205. Distribution of intermediaries.

Sec. 206. Microloan intermediary loan limitation.

Sec. 207. Microloan technical assistance to nonborrowers.

Sec. 208. Microloan demonstration program grants.

Sec. 209. Eligibility to participate as a microloan intermediary and a technical

assistance provider.

Sec. 210. Loans to exporters.

Sec. 211. Working capital international trade loans.

Sec. 212. Guarantees on international trade loans.

Sec. 213. Accredited lenders program.

Sec. 214. Interest rate on certified development company loans.

Sec. 215. Certifications of eligibility for SBIC and SSBIC financing.

Sec. 216. Participating securities for smaller SBICs.

TITLE III—SIZE STANDARDS AND BOND GUARANTEES

Sec. 301. Size standard criteria.

Sec. 302. Sunset on preferred surety bond guarantee program.

Sec. 303. Manufacturing contracts through manufacturing application and education centers.

TITLE IV—BUSINESS DEVELOPMENT ASSISTANCE

Subtitle A—General Provisions

Sec. 401. Sunset on cosponsored training.

Sec. 402. Small business development center program level.

Sec. 403. Federal contracts with small business development centers.

Sec. 404. Small business development center program examination and certification.

Sec. 405. Service Corps of Retired Executives (SCORE) program.

Sec. 406. Information concerning franchising.

Subtitle B—Development of Woman-Owned Businesses

Sec. 411. Extension of authority for demonstration projects.

Sec. 412. Establishment of Office of Women’s Business Ownership.

Sec. 413. National Commission on Women in Business.

TITLE V—RELIEF FROM DEBENTURE PREPAYMENT PENALTIES
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Sec. 501. Short title.

Sec. 502. Prepayment of development company debentures.

TITLE VI—MISCELLANEOUS AMENDMENTS

Sec. 601. Consolidation of funding accounts.

Sec. 602. Imposition of fees.

Sec. 603. Job creation and community benefit.

Sec. 604. Microloan program amendments.

Sec. 605. Technical clarification.

Sec. 606. Secondary market study due date.

Sec. 607. Study and data base: Guaranteed Business Loan Program and Development Company Program.

Sec. 608. SBIR vendors.

Sec. 609. Program extension.

Sec. 610. Prohibition on the use of funds for individuals not lawfully within the

United States.

Sec. 611. Office of advocacy employees.

Sec. 612. Prohibition on the provision of assistance.

Sec. 613. Certification of compliance with child support obligations.

1 TITLE I—AUTHORIZATIONS

2 SEC. 101. AUTHORIZATIONS.

3 Section 20 of the Small Business Act (15 U.S.C. 631

4 note) is amended by striking subsections (k) (as added by

5 section 405(3) of the Small Business Credit and Business

6 Opportunity Enhancement Act of 1992) through (p) and

7 inserting the following:

8 ‘‘(l) The following program levels are authorized for

9 fiscal year 1995:

10 ‘‘(1) For the programs authorized by this Act,

11 the Administration is authorized to make

12 $110,000,000 in direct and immediate participation

13 loans, and $45,000,000 in technical assistance

14 grants as provided in section 7(m).

15 ‘‘(2) For the programs authorized by this Act,

16 the Administration is authorized to make
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1 $13,315,000,000 in deferred participation loans and

2 other financings. Of such sum, the Administration is

3 authorized to make—

4 ‘‘(A) $9,000,000,000 in general business

5 loans as provided in section 7(a);

6 ‘‘(B) $2,300,000,000 in financings as pro7 vided in section 7(a)(13) and section 504 of the

8 Small Business Investment Act of 1958;

9 ‘‘(C) $2,000,000,000 in loans as provided

10 in section 7(a)(21); and

11 ‘‘(D) $15,000,000 in loans as provided in

12 section 7(m).

13 ‘‘(3) For the programs authorized by title III of

14 the Small Business Investment Act of 1958, the Ad15 ministration is authorized to make—

16 ‘‘(A) $33,000,000 in purchases of pre17 ferred securities;

18 ‘‘(B) $275,000,000 in guarantees of de19 bentures, of which $65,000,000 is authorized in

20 guarantees of debentures from companies oper21 ating pursuant to section 301(d) of such Act;

22 and

23 ‘‘(C) $500,000,000 in guarantees of par24 ticipating securities.
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1 ‘‘(4) For the programs authorized by part B of

2 title IV of the Small Business Investment Act of

3 1958, the Administration is authorized to enter into

4 guarantees not to exceed $1,800,000,000, of which

5 not more than $450,000,000 may be in bonds ap6 proved pursuant to the provisions of section

7 411(a)(3) of such Act.

8 ‘‘(5) The Administration is authorized to make

9 grants or enter into cooperative agreements—

10 ‘‘(A) for the Service Corps of Retired Ex11 ecutives program authorized by section 8(b)(1),

12 $3,500,000;

13 ‘‘(B) for the Small Business Institute pro14 gram authorized by section 8(b)(1),

15 $3,000,000; and

16 ‘‘(C) for activities of small business devel17 opment centers pursuant to section 21(c)(3)(G),

18 $25,000,000, to remain available until ex19 pended.

20 ‘‘(m) There are authorized to be appropriated to the

21 Administration for fiscal year 1995 such sums as may be

22 necessary to carry out the provisions of this Act, including

23 administrative expenses and necessary loan capital for dis24 aster loans pursuant to section 7(b), and to carry out the
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1 provisions of the Small Business Investment Act of 1958,

2 including salaries and expenses of the Administration.

3 ‘‘(n) The following program levels are authorized for

4 fiscal year 1996:

5 ‘‘(1) For the programs authorized by this Act,

6 the Administration is authorized to make

7 $175,000,000 in direct and immediate participation

8 loans, and $65,000,000 in technical assistance

9 grants as provided in section 7(m).

10 ‘‘(2) For the programs authorized by this Act,

11 the Administration is authorized to make

12 $15,320,000,000 in deferred participation loans and

13 other financings. Of such sum, the Administration is

14 authorized to make—

15 ‘‘(A) $10,000,000,000 in general business

16 loans as provided in section 7(a);

17 ‘‘(B) $2,800,000,000 in financings as pro18 vided in section 7(a)(13) and section 504 of the

19 Small Business Investment Act of 1958;

20 ‘‘(C) $2,500,000,000 in loans as provided

21 in section 7(a)(21); and

22 ‘‘(D) $20,000,000 in loans as provided in

23 section 7(m).
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1 ‘‘(3) For the programs authorized by title III of

2 the Small Business Investment Act of 1958, the Ad3 ministration is authorized to make—

4 ‘‘(A) $39,000,000 in purchases of pre5 ferred securities;

6 ‘‘(B) $300,000,000 in guarantees of de7 bentures, of which $70,000,000 is authorized in

8 guarantees of debentures from companies oper9 ating pursuant to section 301(d) of such Act;

10 and

11 ‘‘(C) $750,000,000 in guarantees of par12 ticipating securities.

13 ‘‘(4) For the programs authorized by part B of

14 title IV of the Small Business Investment Act of

15 1958, the Administration is authorized to enter into

16 guarantees not to exceed $2,000,000,000, of which

17 not more than $500,000,000 may be in bonds ap18 proved pursuant to the provisions of section

19 411(a)(3) of such Act.

20 ‘‘(5) The Administration is authorized to make

21 grants or enter cooperative agreements—

22 ‘‘(A) for the Service Corps of Retired Ex23 ecutives program authorized by section 8(b)(1),

24 $3,750,000;
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1 ‘‘(B) for the small business institute pro2 gram authorized by section 8(b)(1),

3 $3,250,000; and

4 ‘‘(C) for activities of small business devel5 opment centers pursuant to section 21(c)(3)(G),

6 not to exceed $25,000,000, to remain available

7 until expended.

8 ‘‘(o) There are authorized to be appropriated to the

9 Administration for fiscal year 1996 such sums as may be

10 necessary to carry out the provisions of this Act, including

11 administrative expenses and necessary loan capital for dis12 aster loans pursuant to section 7(b), and to carry out the

13 provisions of the Small Business Investment Act of 1958,

14 including salaries and expenses of the Administration.

15 ‘‘(p) The following program levels are authorized for

16 fiscal year 1997:

17 ‘‘(1) For the programs authorized by this Act,

18 the Administration is authorized to make

19 $250,000,000 in direct and immediate participation

20 loans and $98,000,000 in technical assistance grants

21 as provided in section 7(m), to remain available until

22 expended.

23 ‘‘(2) For the programs authorized by this Act,

24 the Administration is authorized to make

25 $19,020,000,000 in deferred participation loans and
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1 other financings. Of such sum, the Administration is

2 authorized to make—

3 ‘‘(A) $12,000,000,000 in general business

4 loans as provided in section 7(a);

5 ‘‘(B) $3,500,000,000 in financings as pro6 vided in section 7(a)(13) and section 504 of the

7 Small Business Investment Act of 1958;

8 ‘‘(C) $3,500,000,000 in loans as provided

9 in section 7(a)(21); and

10 ‘‘(D) $20,000,000 in loans as provided in

11 section 7(m).

12 ‘‘(3) For the programs authorized by title III of

13 the Small Business Investment Act of 1958, the Ad14 ministration is authorized to make—

15 ‘‘(A) $45,000,000 in purchases of pre16 ferred securities;

17 ‘‘(B) $375,000,000 in guarantees of de18 bentures, of which $75,000,000 is authorized in

19 guarantees of debentures from companies oper20 ating pursuant to section 301(d) of such Act;

21 and

22 ‘‘(C) $1,125,000,000 in guarantees of par23 ticipating securities.

24 ‘‘(4) For the programs authorized by part B of

25 title IV of the Small Business Investment Act of
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1 1958, the Administration is authorized to enter into

2 guarantees not to exceed $2,200,000,000, of which

3 not more than $650,000,000 may be in bonds ap4 proved pursuant to the provisions of section

5 411(a)(3) of such Act.

6 ‘‘(5) The Administration is authorized to make

7 grants or enter cooperative agreements—

8 ‘‘(A) for the Service Corps of Retired Ex9 ecutives program authorized by section 8(b)(1),

10 $4,000,000;

11 ‘‘(B) for the small business institute pro12 gram authorized by section 8(b)(1),

13 $3,500,000; and

14 ‘‘(C) for activities of small business devel15 opment centers pursuant to section 21(c)(3)(G),

16 not to exceed $25,000,000, to remain available

17 until expended.

18 ‘‘(q) There are authorized to be appropriated to the

19 Administration for fiscal year 1997 such sums as may be

20 necessary to carry out the provisions of this Act, including

21 administrative expenses and necessary loan capital for dis22 aster loans pursuant to section 7(b), and to carry out the

23 provisions of the Small Business Investment Act of 1958,

24 including salaries and expenses of the Administration.’’.
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1 TITLE II—FINANCIAL

2 ASSISTANCE PROGRAMS

3 SEC. 201. MICROLOAN FINANCING PILOT.

4 Section 7(m) of the Small Business Act (15 U.S.C.

5 636(m)) is amended by adding at the end the following

6 new paragraph:

7 ‘‘(12) DEFERRED PARTICIPATION LOAN

8 PILOT.—In lieu of making direct loans to

9 intermediaries as authorized in paragraph (1)(B),

10 during fiscal years 1995 through 1997, the Adminis11 tration may, on a pilot program basis, participate on

12 a deferred basis of not less than 90 percent and not

13 more than 100 percent on loans made to

14 intermediaries by a for-profit or nonprofit entity or

15 by alliances of such entities, subject to the following

16 conditions:

17 ‘‘(A) NUMBER OF LOANS.—In carrying out

18 this paragraph, the Administration shall not

19 participate in providing financing on a deferred

20 basis to more than 10 intermediaries in urban

21 areas or more than 10 intermediaries in rural

22 areas.

23 ‘‘(B) TERM OF LOANS.—The term of each

24 loan shall be 10 years. During the first year of

25 the loan, the intermediary shall not be required
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1 to repay any interest or principal. During the

2 second through fifth years of the loan, the

3 intermediary shall be required to pay interest

4 only. During the sixth through tenth years of

5 the loan, the intermediary shall be required to

6 make interest payments and fully amortize the

7 principal.

8 ‘‘(C) INTEREST RATE.—The interest rate

9 on each loan shall be the rate specified by para10 graph (3)(F) for direct loans. Subject to the

11 availability of appropriations, the Administra12 tion may make payments to lenders on behalf

13 of intermediaries in order to achieve such inter14 est rate.’’.

15 SEC. 202. ELIGIBILITY OF NATIVE AMERICAN TRIBAL GOV16 ERNMENTS TO BE MICROLOAN

17 INTERMEDIARIES.

18 Section 7(m)(11)(A) of the Small Business Act (15

19 U.S.C. 636(m)(11)(A)) is amended—

20 (1) in clause (iii), by striking ‘‘or’’ at the end;

21 (2) in clause (iv), by striking the comma at the

22 end and inserting ‘‘; or’’; and

23 (3) by adding at the end the following new

24 clause:
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1 ‘‘(v) an agency of or nonprofit entity

2 established by a Native American Tribal

3 Government,’’.

4 SEC. 203. MICROLOAN PROGRAM EXTENSION.

5 Section 609(j) of Public Law 102–140 (105 Stat.

6 831) is amended by striking ‘‘5 years after the date of

7 enactment of this Act’’, and inserting ‘‘on October 1,

8 1998’’.

9 SEC. 204. MICROLOAN PROGRAM FUNDING AND STATE LIM10 ITATIONS.

11 Section 7(m) of the Small Business Act (15 U.S.C.

12 636(m)) is amended—

13 (1) in paragraph (5)(A)—

14 (A) by striking ‘‘25 grants’’ and inserting

15 ‘‘50 grants’’; and

16 (B) by striking ‘‘$125,000’’ and inserting

17 ‘‘$150,000’’; and

18 (2) by striking paragraph (7) and inserting the

19 following:

20 ‘‘(7) PROGRAM FUNDING FOR MICROLOANS.—

21 ‘‘(A) NUMBER OF PARTICIPANTS.—In car22 rying out paragraph (1)(B)(i), the Administra23 tion may fund, on a competitive basis, not more

24 than—
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1 ‘‘(i) 150 microloan programs in fiscal

2 year 1995; and

3 ‘‘(ii) 200 microloan programs in each

4 succeeding fiscal year.

5 ‘‘(B) STATE LIMITATIONS.—A State shall

6 not receive more than $10,000,000 in loan

7 funds during any year of program participa8 tion.’’.

9 SEC. 205. DISTRIBUTION OF INTERMEDIARIES.

10 Section 7(m)(8) of the Small Business Act (15

11 U.S.C. 636(m)(8)) is amended to read as follows:

12 ‘‘(8) DISTRIBUTION OF INTERMEDIARIES.—In

13 approving microloan program applicants under this

14 subsection, the Administration shall select such

15 intermediaries as will further microloan availability

16 for small businesses in all industries located

17 throughout each State, especially small businesses

18 located in economically distressed urban and rural

19 areas.’’.

20 SEC. 206. MICROLOAN INTERMEDIARY LOAN LIMITATION.

21 Section 7(m)(3)(C) of the Small Business Act (15

22 U.S.C. 636(m)(3)(C)) is amended by striking

23 ‘‘$1,250,000’’ and inserting ‘‘$2,000,000’’.
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1 SEC. 207. MICROLOAN TECHNICAL ASSISTANCE TO

2 NONBORROWERS.

3 Section 7(m)(4) of the Small Business Act (15

4 U.S.C. 636(m)(4)) is amended by adding at the end the

5 following new subparagraph:

6 ‘‘(E) ASSISTANCE TO CERTAIN SMALL

7 BUSINESS CONCERNS.—Each intermediary may

8 expend an amount not to exceed 20 percent of

9 the grant funds authorized under paragraph

10 (1)(B)(ii) to provide marketing, management,

11 and technical assistance to small business con12 cerns that are not borrowers under this sub13 section.’’.

14 SEC. 208. MICROLOAN DEMONSTRATION PROGRAM

15 GRANTS.

16 Section 7(m)(4) of the Small Business Act (15

17 U.S.C. 636(m)(4)) is amended—

18 (1) in subparagraph (B), by inserting ‘‘except

19 for a grant made to an intermediary that provides

20 not less than 50 percent of its loans to small busi21 ness concerns owned by one or more members of a

22 federally recognized Indian tribe,’’ after ‘‘under sub23 paragraph (A),’’; and

24 (2) in subparagraph (C), by striking clause (i)

25 and inserting the following:
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1 ‘‘(i) IN GENERAL.—In addition to

2 grants made under subparagraph (A), each

3 intermediary shall be eligible to receive a

4 grant equal to 5 percent of the total out5 standing balance of loans made to the

6 intermediary under this subsection if—

7 ‘‘(I) the intermediary provides

8 not less than 25 percent of its loans

9 to small business concerns owned by

10 one or more members of a federally

11 recognized Indian tribe; or

12 ‘‘(II) the intermediary has a

13 portfolio of loans made under this

14 subsection that averages not more

15 than $7,500 during the period of the

16 intermediary’s participation in the

17 program.’’.

18 SEC. 209. ELIGIBILITY TO PARTICIPATE AS A MICROLOAN

19 INTERMEDIARY AND A TECHNICAL ASSIST20 ANCE PROVIDER.

21 Section 7(m)(2) of the Small Business Act (15

22 U.S.C. 636(m)(2)) is amended—

23 (1) by striking ‘‘(2) ELIGIBILITY FOR PARTICI24 PATION.—An’’ and inserting the following:

25 ‘‘(2) ELIGIBILITY FOR PARTICIPATION.—
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1 ‘‘(A) IN GENERAL.—An’’;

2 (2) by redesignating subparagraphs (A) and

3 (B) as clauses (i) and (ii), respectively, and indent4 ing accordingly; and

5 (3) by adding at the end the following new sub6 paragraph:

7 ‘‘(B) PARTICIPATION AS INTERMEDIARY

8 AND TECHNICAL ASSISTANCE PROVIDER.—A

9 single entity may simultaneously receive 1 grant

10 as an intermediary pursuant to paragraph

11 (1)(B)(ii) and 1 grant as a nonintermediary

12 technical assistance provider pursuant to para13 graph (1)(B)(iii) if the Administration deter14 mines that—

15 ‘‘(i) the purposes of the grants are not

16 duplicative;

17 ‘‘(ii) the grants will enable the entity

18 to provide technical assistance to different

19 geographic areas, or to support both guar20 anteed and direct loans in the same geo21 graphic area; and

22 ‘‘(iii) the entity meets all of the re23 quirements of the programs authorized

24 pursuant to clauses (ii) and (iii) of para25 graph (1)(B).’’.
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1 SEC. 210. LOANS TO EXPORTERS.

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

3 U.S.C. 636(a)(14)(A)) is amended to read as follows:

4 ‘‘(14)(A) The Administration may provide ex5 tensions of credit, standby letters of credit, revolving

6 lines of credit for export purposes, and other financ7 ing to enable small business concerns, including

8 small business export trading companies and small

9 business export management companies, to develop

10 foreign markets. A bank or participating lending in11 stitution may establish the rate of interest on such

12 financings as may be legal and reasonable.’’.

13 SEC. 211. WORKING CAPITAL INTERNATIONAL TRADE

14 LOANS.

15 Section 7(a)(3)(B) of the Small Business Act (15

16 U.S.C. 636(a)(3)(B)) is amended to read as follows:

17 ‘‘(B) if the total amount outstanding and

18 committed (on a deferred basis) solely for the

19 purposes provided in paragraph (16) to the bor20 rower from the business loan and investment

21 fund established by this Act would exceed

22 $1,250,000, of which not more than $750,000

23 may be used for working capital, supplies, or

24 financings under section 7(a)(14) for export

25 purposes; and’’.
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1 SEC. 212. GUARANTEES ON INTERNATIONAL TRADE LOANS.

2 Section 7(a)(2)(B)(iv) of the Small Business Act (15

3 U.S.C. 636(a)(2)(B)(iv)) is amended to read as follows:

4 ‘‘(iv) not less than 85 percent nor

5 more than 90 percent of the financing out6 standing at the time of disbursement if

7 such financing is a loan under paragraph

8 (14) or (16).’’.

9 SEC. 213. ACCREDITED LENDERS PROGRAM.

10 (a) ESTABLISHMENT.—Title V of the Small Business

11 Investment Act of 1958 (15 U.S.C. 695 et seq.) is amend12 ed by adding at the end the following new section:

13 ‘‘SEC. 507. ACCREDITED LENDERS PROGRAM.

14 ‘‘(a) ESTABLISHMENT.—The Administration is au15 thorized to establish an Accredited Lenders Program for

16 qualified State and local development companies that meet

17 the requirements of subsection (b).

18 ‘‘(b) REQUIREMENTS.—The Administration may des19 ignate a qualified State or local development company as

20 an accredited lender if such company—

21 ‘‘(1) has been an active participant in the De22 velopment Company Program authorized by sections

23 502, 503, and 504 for not less than the preceding

24 12 months;

25 ‘‘(2) has well-trained, qualified personnel who

26 are knowledgeable in the Administration’s lending
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1 policies and procedures for such Development Com2 pany Program;

3 ‘‘(3) has the ability to process, close, and serv4 ice financing for plant and equipment under such

5 Development Company Program;

6 ‘‘(4) has a reasonable and acceptable loss rate

7 on the company’s debentures;

8 ‘‘(5) has a history of submitting to the Admin9 istration complete and accurate debenture guaranty

10 application packages; and

11 ‘‘(6) has demonstrated the ability to serve small

12 business credit needs for financing plant and equip13 ment through the Development Company Program

14 authorized by sections 502, 503, and 504.

15 ‘‘(c) EXPEDITED PROCESSING OF LOAN APPLICA16 TIONS.—The Administration shall develop an expedited

17 procedure for processing a loan application or servicing

18 action submitted by a qualified State or local development

19 company that has been designated as an accredited lender

20 in accordance with subsection (b).

21 ‘‘(d) SUSPENSION OR REVOCATION OF DESIGNA22 TION.—

23 ‘‘(1) IN GENERAL.—The designation of a quali24 fied State or local development company as an ac-
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1 credited lender may be suspended or revoked if the

2 Administration determines that—

3 ‘‘(A) the development company has not

4 continued to meet the criteria for eligibility

5 under subsection (b); or

6 ‘‘(B) the development company has failed

7 to adhere to the Administration’s rules and reg8 ulations or is violating any other applicable pro9 vision of law.

10 ‘‘(2) EFFECT.—A suspension or revocation

11 under paragraph (1) shall not affect any outstanding

12 debenture guarantee.

13 ‘‘(e) DEFINITION.—For purposes of this section, the

14 term ‘qualified State or local development company’ has

15 the same meaning as in section 503(e).’’.

16 (b) REGULATIONS.—Not later than 120 days after

17 the date of enactment of this Act, the Administration shall

18 promulgate final regulations to carry out this section.

19 (c) REPORT.—Not later than 1 year after the effec20 tive date of regulations promulgated under subsection (b),

21 the Administration shall report to the Committees on

22 Small Business of the Senate and the House of Represent23 atives on the implementation of this section. Such report

24 shall include data on the number of development compa25 nies designated as accredited lenders, their debenture
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1 guarantee volume, their loss rates, the average processing

2 time on their guarantee applications, and such other infor3 mation as the Administration deems appropriate.

4 SEC. 214. INTEREST RATE ON CERTIFIED DEVELOPMENT

5 COMPANY LOANS.

6 Section 112(c) of the Small Business Administration

7 Reauthorization and Amendment Act of 1988 (102 Stat.

8 2996) is amended—

9 (1) in paragraph (1), by striking ‘‘(1) IN GEN10 ERAL.—Section 503’’ and inserting ‘‘Section 503’’;

11 and

12 (2) by striking paragraph (2).

13 SEC. 215. CERTIFICATIONS OF ELIGIBILITY FOR SBIC AND

14 SSBIC FINANCING.

15 Section 308 of the Small Business Investment Act

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

17 the following new subsection:

18 ‘‘(h) CERTIFICATIONS OF ELIGIBILITY.—

19 ‘‘(1) CERTIFICATION BY SMALL BUSINESS CON20 CERN.—Prior to receiving financial assistance from

21 a company licensed pursuant to subsection (c) or (d)

22 of section 301, a small business concern shall certify

23 in writing that it meets the eligibility requirements

24 of the Small Business Investment Company Pro-
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1 gram or the Specialized Small Business Investment

2 Company Program, as applicable.

3 ‘‘(2) CERTIFICATION BY COMPANY.—Prior to

4 providing financial assistance to a small business

5 concern under this Act, a company licensed pursuant

6 to subsection (c) or (d) of section 301 shall certify

7 in writing that it has reviewed the application for as8 sistance of the small business concern and that all

9 documentation and other information supports the

10 eligibility of the applicant.

11 ‘‘(3) RETENTION OF CERTIFICATIONS.—Certifi12 cates made pursuant to paragraphs (1) and (2) shall

13 be retained by the company licensed pursuant to

14 subsection (c) or (d) of section 301 for the duration

15 of the financial assistance.’’.

16 SEC. 216. PARTICIPATING SECURITIES FOR SMALLER

17 SBICS.

18 Section 303(g) of the Small Business Investment Act

19 of 1958 (15 U.S.C. 683(g)) is amended by adding at the

20 end the following new paragraph:

21 ‘‘(13) PARTICIPATING SECURITIES FOR SMALL22 ER SMALL BUSINESS INVESTMENT COMPANIES.—

23 ‘‘(A) IN GENERAL.—Subject to the provi24 sions of subparagraph (B), of the amount of

25 the annual program level of participating secu-
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1 rities approved in appropriations Acts, 50 per2 cent shall be reserved for funding small busi3 ness investment companies with private capital

4 of less than $20,000,000.

5 ‘‘(B) EXCEPTION.—During the last quar6 ter of each fiscal year, if the Administrator de7 termines that there is a lack of qualified appli8 cants with private capital of less than

9 $20,000,000, the Administrator may utilize all

10 or any part of the program level for securities

11 reserved under subparagraph (A) for qualified

12 applicants with private capital of $20,000,000

13 or more.’’.

14 TITLE III—SIZE STANDARDS AND

15 BOND GUARANTEES

16 SEC. 301. SIZE STANDARD CRITERIA.

17 Section 3(a)(2) of the Small Business Act (15 U.S.C.

18 632(a)(2)) is amended to read as follows:

19 ‘‘(2) SIZE STANDARD CRITERIA.—

20 ‘‘(A) IN GENERAL.—In addition to the cri21 teria specified in paragraph (1), the Adminis22 trator may specify detailed definitions or stand23 ards by which a business concern may be deter24 mined to be a small business concern for the

25 purposes of this Act or any other Act.
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1 ‘‘(B) ADDITIONAL CRITERIA.—The stand2 ards described in paragraph (1) may utilize

3 number of employees, dollar volume of business,

4 net worth, net income, or a combination there5 of.

6 ‘‘(C) REQUIREMENTS.—Unless specifically

7 authorized by statute, no Federal department

8 or agency may prescribe a size standard for cat9 egorizing a business concern as a small business

10 concern, unless such proposed size standard—

11 ‘‘(i) is proposed after an opportunity

12 for public notice and comment;

13 ‘‘(ii) provides for determining—

14 ‘‘(I) the size of a manufacturing

15 concern as measured by the manufac16 turing concern’s average employment

17 based upon employment during each

18 of the manufacturing concern’s pay

19 periods for the preceding 12 months;

20 ‘‘(II) the size of a business con21 cern providing services on the basis of

22 the annual average gross receipts of

23 the business concern over a period of

24 not less than 3 years; and
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1 ‘‘(III) the size of other business

2 concerns on the basis of data over a

3 period of not less than 3 years; and

4 ‘‘(iii) is approved by the Adminis5 trator.’’.

6 SEC. 302. SUNSET ON PREFERRED SURETY BOND GUARAN7 TEE PROGRAM.

8 Section 207 of the Small Business Administration

9 Reauthorization and Amendment Act of 1988 (15 U.S.C.

10 694b note) is amended by striking ‘‘September 30, 1994’’

11 and inserting ‘‘September 30, 1995’’.

12 SEC. 303. MANUFACTURING CONTRACTS THROUGH MANU13 FACTURING APPLICATION AND EDUCATION

14 CENTERS.

15 (a) IN GENERAL.—The Small Business Administra16 tion shall promote the award of Federal manufacturing

17 contracts to small business concerns that participate in

18 manufacturing application and education centers by work19 ing with the Department of Commerce and other agencies

20 to identify components and subsystems that are both criti21 cal and currently foreign-sourced.

22 (b) QUALIFICATIONS.—In order to qualify as a man23 ufacturing application and education center under this

24 section, an entity shall have the capacity to assist small
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1 business concerns in a shared-use production environment

2 and to offer the following services:

3 (1) Technology demonstration.

4 (2) Technology education.

5 (3) Technology application support.

6 (4) Technology advancement support.

7 (c) INAPPLICABILITY OF CERTAIN REQUIRE8 MENTS.—The requirements of section 15(o)(1)(B) of the

9 Small Business Act shall not apply with respect to any

10 manufacturing contract carried out by a small business

11 concern in conjunction with a manufacturing application

12 and education center under this section.

13 (d) REGULATIONS.—Not later than 180 days after

14 the date of enactment of this Act, the Administrator of

15 the Small Business Administration shall promulgate final

16 regulations to carry out this section.

17 (e) TERMINATION OF AUTHORITY.—The authority of

18 the Small Business Administration under this section shall

19 terminate on September 30, 1997.

20 TITLE IV—BUSINESS

21 DEVELOPMENT ASSISTANCE

22 Subtitle A—General Provisions

23 SEC. 401. SUNSET ON COSPONSORED TRAINING.

24 (a) IN GENERAL.—
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1 (1) REPEAL.—The amendments made by sec2 tion 5(a) of Small Business Computer Security and

3 Education Act of 1984 (15 U.S.C. 633 note) are

4 hereby repealed.

5 (2) EFFECTIVE DATE.—Paragraph (1) shall

6 take effect on September 30, 1997.

7 (b) CONFORMING AMENDMENT.—Section 7(b) of the

8 Small Business Computer Security and Education Act of

9 1984 (15 U.S.C. 633 note) is amended in the second sen10 tence by striking ‘‘and the amendments made to section

11 8(b)(1)(A) of the Small Business Act by section 5(a)(2)

12 of this Act are’’ and inserting ‘‘is’’.

13 SEC. 402. SMALL BUSINESS DEVELOPMENT CENTER PRO14 GRAM LEVEL.

15 Section 21(a)(4) of the Small Business Act (15

16 U.S.C. 648(a)(4)) is amended to read as follows:

17 ‘‘(4) SMALL BUSINESS DEVELOPMENT CENTER PRO18 GRAM LEVEL.—

19 ‘‘(A) IN GENERAL.—The Administration shall

20 require as a condition of any grant (or amendment

21 or modification thereof) made to an applicant under

22 this section, that a matching amount (excluding any

23 fees collected from recipients of such assistance)

24 equal to the amount of such grant be provided from

25 sources other than the Federal Government, to be
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1 comprised of not less than 50 percent cash and not

2 more than 50 percent of indirect costs and in-kind

3 contributions.

4 ‘‘(B) RESTRICTION.—The matching amount de5 scribed in subparagraph (A) shall not include any

6 indirect costs or in-kind contributions derived from

7 any Federal program.

8 ‘‘(C) NATIONAL PROGRAM.—

9 ‘‘(i) IN GENERAL.—No recipient of funds

10 under this section shall receive a grant that ex11 ceeds—

12 ‘‘(I) for fiscal year 1995, the greater

13 of—

14 ‘‘(aa) the sum of such recipient’s

15 pro rata share of a national program

16 based upon the population to be

17 served by the small business develop18 ment center as compared to the total

19 population in the United States, and

20 $100,000; or

21 ‘‘(bb) $200,000; and

22 ‘‘(II) except as provided in clause (ii),

23 in each succeeding fiscal year, the greater

24 of—
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1 ‘‘(aa) the sum of such recipient’s

2 pro rata share of a national program

3 based upon the population to be

4 served by the small business develop5 ment center as compared to the total

6 population in the United States, and

7 $200,000; or

8 ‘‘(bb) $300,000.

9 ‘‘(ii) EXCEPTION.—The provisions of

10 clause (i)(I) shall apply in any fiscal year after

11 fiscal year 1995 in which, based on funds ap12 propriated, a small business development center

13 would, under the provisions of clause (i)(II), re14 ceive less than the small business development

15 center received in fiscal year 1995.

16 ‘‘(iii) AMOUNT.—The amount of the na17 tional program shall be—

18 ‘‘(I) $70,000,000 through September

19 30, 1995;

20 ‘‘(II) $77,500,000 from October 1,

21 1995 through September 30, 1996; and

22 ‘‘(III) $85,000,000 beginning October

23 1, 1996.

24 The amount for which a small business develop25 ment center is eligible under this paragraph
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1 shall be based upon the amount of the national

2 program in effect as of the date for commence3 ment of performance of the small business de4 velopment center’s grant.’’.

5 SEC. 403. FEDERAL CONTRACTS WITH SMALL BUSINESS DE6 VELOPMENT CENTERS.

7 Section 21(a)(5) of the Small Business Act (15

8 U.S.C. 648(a)(5)) is amended to read as follows:

9 ‘‘(5) FEDERAL CONTRACTS WITH SMALL BUSINESS

10 DEVELOPMENT CENTERS.—

11 ‘‘(A) IN GENERAL.—A small business develop12 ment center may enter into a contract with a Fed13 eral department or agency to provide specific assist14 ance to small business concerns, if the contract is

15 approved in advance by the Associate Administrator

16 of the small business development center program.

17 ‘‘(B) APPROVAL CRITERIA.—Each approval of a

18 contract under subparagraph (A) shall be based

19 upon a determination that the contract will provide

20 assistance to small business concerns and that per21 formance of the contract will not hinder the small

22 business development center in carrying out the

23 terms of the grant received by the small business de24 velopment center from the Administration.
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1 ‘‘(C) EXEMPTION FROM MATCHING REQUIRE2 MENT.—A contract under this paragraph shall not

3 be subject to the matching funds or eligibility re4 quirements of paragraph (4).

5 ‘‘(D) ADDITIONAL PROVISION.—Notwithstand6 ing any other provision of law, a contract for assist7 ance under this paragraph may not be applied to

8 any Federal department or agency’s small business,

9 woman-owned business, or socially and economically

10 disadvantaged business contracting goal under sec11 tion 15(g).’’.

12 SEC. 404. SMALL BUSINESS DEVELOPMENT CENTER PRO13 GRAM EXAMINATION AND CERTIFICATION.

14 Section 21(k) of the Small Business Act (15 U.S.C.

15 648(k)) is amended to read as follows:

16 ‘‘(k) PROGRAM EXAMINATION AND CERTIFI17 CATION.—

18 ‘‘(1) EXAMINATION.—Not later than 180 days

19 after the date of enactment of this subsection, the

20 Administration shall develop and implement a bian21 nual programmatic and financial examination of

22 each small business development center established

23 pursuant to this section.

24 ‘‘(2) CERTIFICATION.—The Administration may

25 provide financial support, by contract or otherwise,
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1 to the association authorized by subsection (a)(3)(A)

2 for the purpose of developing a small business devel3 opment center certification program.

4 ‘‘(3) EXTENSION OR RENEWAL OF COOPERA5 TIVE AGREEMENTS.—In extending or renewing a co6 operative agreement of a small business development

7 center, the Administration shall consider the results

8 of the examination and certification program con9 ducted pursuant to paragraphs (1) and (2).’’.

10 SEC. 405. SERVICE CORPS OF RETIRED EXECUTIVES

11 (SCORE) PROGRAM.

12 Section 8(b)(1) of the Small Business Act (15 U.S.C.

13 637(b)(1)) is amended by adding at the end the following

14 new subparagraph:

15 ‘‘(H) In carrying out subparagraph (B), the

16 Administration shall encourage the Service Corps of

17 Retired Executives (SCORE) established pursuant

18 to such subparagraph, to the maximum extent prac19 ticable, to consult and work in conjunction with the

20 Corporation for National and Community Service

21 and the Points of Light Foundation established

22 under the National and Community Service Act of

23 1990.’’.
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1 SEC. 406. INFORMATION CONCERNING FRANCHISING.

2 Section 8(b)(1)(A) of the Small Business Act (15

3 U.S.C. 637(b)(1)(A)) is amended by inserting ‘‘including

4 information on the benefits and risks of franchising,’’ after

5 ‘‘small-business enterprises,’’.

6 Subtitle B—Development of

7 Woman-Owned Businesses

8 SEC. 411. EXTENSION OF AUTHORITY FOR DEMONSTRA9 TION PROJECTS.

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

11 amended—

12 (1) by redesignating section 28 (as added by

13 section 2 of the Women’s Business Development Act

14 of 1991) as section 29; and

15 (2) in section 29(g), as redesignated, by strik16 ing ‘‘1995’’ and inserting ‘‘1997’’.

17 SEC. 412. ESTABLISHMENT OF OFFICE OF WOMEN’S BUSI18 NESS OWNERSHIP.

19 Section 29 of the Small Business Act (15 U.S.C.

20 656), as redesignated by section 411, is amended by add21 ing at the end the following new subsection:

22 ‘‘(h) OFFICE OF WOMEN’S BUSINESS OWNERSHIP.—

23 There is hereby established within the Administration an

24 Office of Women’s Business Ownership, which shall be re25 sponsible for the administration of the Administration’s

26 programs for the development of women’s business enter-
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1 prises, as such term is defined in section 408 of the Wom2 en’s Business Ownership Act of 1988. The Office of Wom3 en’s Business Ownership shall be administered by an As4 sistant Administrator, who shall be appointed by the Ad5 ministrator.’’.

6 SEC. 413. NATIONAL COMMISSION ON WOMEN IN BUSINESS.

7 (a) ESTABLISHMENT.—Section 401 of the Women’s

8 Business Ownership Act of 1988 (15 U.S.C. 631 note) is

9 amended to read as follows:

10 ‘‘SEC. 401. ESTABLISHMENT.

11 ‘‘There is hereby established a Commission to be

12 known as the ‘National Commission on Women in Busi13 ness’ (hereafter in this title referred to as the ‘Commis14 sion’).’’.

15 (b) DUTIES OF THE COMMISSION.—Section 402 of

16 the Women’s Business Ownership Act of 1988 (15 U.S.C.

17 631 note) is amended to read as follows:

18 ‘‘SEC. 402. DUTIES OF THE COMMISSION.

19 ‘‘The Commission shall—

20 ‘‘(1) review, promote, coordinate, and monitor

21 plans and programs, developed in the public and pri22 vate sectors, which affect the ability of woman23 owned businesses to obtain capital and credit;

24 ‘‘(2) promote and assist in the development of

25 the Intermediate Census on Women’s Business Own-
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1 ership and other surveys of woman-owned busi2 nesses;

3 ‘‘(3) provide assistance to and outreach for the

4 involvement of women business owners in White

5 House Conference on Small Business;

6 ‘‘(4) study and assess—

7 ‘‘(A) the obstacles faced by women seeking

8 to establish businesses and women seeking sen9 ior management positions in large and small

10 businesses and in the professions; and

11 ‘‘(B) the contributions to the Nation’s

12 economy by businesses owned or managed by

13 women; and

14 ‘‘(5) design a comprehensive plan for a joint

15 public-private sector effort to facilitate the develop16 ment and growth of woman-owned businesses.

17 ‘‘(b) REPORT.—Not later than January 31, 1996, the

18 Commission shall submit a report to the President and

19 the Committees on Small Business of the Senate and the

20 House of Representatives describing the plan developed

21 pursuant to subsection (a)(5).’’.

22 (c) MEMBERSHIP.—Section 403 of the Women’s

23 Business Ownership Act of 1988 (15 U.S.C. 631 note) is

24 amended to read as follows:
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1 ‘‘SEC. 403. MEMBERSHIP OF THE COMMISSION.

2 ‘‘(a) IN GENERAL.—The Commission shall be com3 posed of 14 members, of whom—

4 ‘‘(1) 7 members shall be the individuals de5 scribed in subsection (b); and

6 ‘‘(2) 7 members shall be appointed in accord7 ance with subsection (c).

8 ‘‘(b) PUBLIC SECTOR MEMBERS.—For purposes of

9 subsection (a)(1), the individuals described in this section

10 are—

11 ‘‘(1) the Administrator of the Small Business

12 Administration;

13 ‘‘(2) the Assistant Administrator of the Office

14 of Women’s Business Ownership of the Small Busi15 ness Administration;

16 ‘‘(3) the Secretary of the Treasury, or the Sec17 retary’s designee;

18 ‘‘(4) the Secretary of Labor, or the Secretary’s

19 designee;

20 ‘‘(5) the Secretary of Commerce, or the Sec21 retary’s designee;

22 ‘‘(6) the Administrator of the General Services

23 Administration, or the Administrator’s designee; and

24 ‘‘(7) 1 member of the Board of Governors of

25 the Federal Reserve System, or the designee of a

26 member.
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1 ‘‘(c) PRIVATE SECTOR MEMBERS.—

2 ‘‘(1) CHAIRPERSON.—Not later than 45 days

3 after the date of enactment of the Small Business

4 Administration Reauthorization and Amendment Act

5 of 1994, the President shall appoint an individual to

6 serve as the chairperson of the Commission (here7 after in this title referred to as the ‘Chairperson’)

8 who shall be a prominent business-woman who is

9 qualified to head the Commission by virtue of her

10 education, training, and experience.

11 ‘‘(2) OTHER MEMBERS.—Not later than 60

12 days after the date of enactment of the Small Busi13 ness Administration Reauthorization and Amend14 ment Act of 1994, the Administrator of the Small

15 Business Administration shall appoint 6 members of

16 the Commission, of whom—

17 ‘‘(A) 1 shall be an owner of a small busi18 ness concern, as such term is defined in section

19 3 of the Small Business Act, who is a member

20 of the same political party as the President;

21 ‘‘(B) 1 shall be an owner of a small busi22 ness concern, as such term is defined in section

23 3 of the Small Business Act, who is not a mem24 ber of the same political party as the President;

25 and
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1 ‘‘(C) 4 shall be representatives of national

2 women’s business organizations.

3 ‘‘(d) ADMINISTRATIVE PROVISIONS.—

4 ‘‘(1) RESTRICTION.—The members of the Com5 mission appointed pursuant to subsection (c) shall

6 not be officers or employees of the Federal Govern7 ment.

8 ‘‘(2) VICE CHAIRPERSON.—The member of the

9 Commission appointed pursuant to subsection (b)(2)

10 shall serve as vice chairperson of the Commission.

11 ‘‘(3) TERMS.—The term of service of the mem12 bers of the Commission appointed pursuant to sub13 section (c) shall be 1 year. No member of the Com14 mission may serve for more than 2 consecutive

15 terms.

16 ‘‘(4) DESIGNEES.—Each designee appointed

17 pursuant to subsection (b) shall—

18 ‘‘(A) be a policy-making official whose du19 ties are consistent with the duties of the Com20 mission; and

21 ‘‘(B) report directly to the head of the

22 agency on the activities of the Commission.

23 ‘‘(5) COMPENSATION AND TRAVEL EX24 PENSES.—
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1 ‘‘(A) PUBLIC SECTOR MEMBERS.—The

2 members of the Commission described in sub3 section (b) shall serve on the Commission with4 out additional compensation.

5 ‘‘(B) PRIVATE SECTOR MEMBERS.—The

6 members of the Commission appointed pursu7 ant to subsection (c) shall serve without pay for

8 membership, except that such members shall be

9 entitled to reimbursement for domestic travel,

10 subsistence, and other necessary expenses in11 curred by them in carrying out the functions of

12 the Commission in the same manner as persons

13 serving on advisory boards pursuant to section

14 8(b) of the Small Business Act.

15 ‘‘(6) VACANCIES.—A vacancy on the Commis16 sion shall, not later than 30 days after the date on

17 which the vacancy occurs, be filled in the same man18 ner in which the original appointment was made.

19 ‘‘(7) MEETINGS.—The Commission shall meet

20 at the call of the Chairperson not less than 4 times

21 each year.

22 ‘‘(8) QUORUMS.—

23 ‘‘(A) RECEIPT OF TESTIMONY.—Four

24 members of the Commission shall constitute a
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1 quorum for the receipt of testimony and other

2 evidence.

3 ‘‘(B) APPROVAL OF RECOMMENDATIONS.—

4 A majority of the members of the Commission

5 shall constitute a quorum for the approval of

6 recommendations or reports issued pursuant to

7 sections 402 and 406.’’.

8 (d) EXECUTIVE DIRECTOR AND STAFF.—Section 404

9 of the Women’s Business Ownership Act of 1988 (15

10 U.S.C. 631 note) is amended to read as follows:

11 ‘‘SEC. 404. EXECUTIVE DIRECTOR AND STAFF.

12 ‘‘(a) EXECUTIVE DIRECTOR.—The Commission shall

13 have an Executive Director who shall be appointed by the

14 Chairperson and the Assistant Administrator of the Small

15 Business Administration Office of Women’s Business

16 Ownership. Upon the recommendation by the Executive

17 Director, the Chairperson may appoint and fix the pay of

18 4 additional employees at a rate of pay not to exceed the

19 maximum rate of pay payable for a position at GS–15 of

20 the General Schedule.

21 ‘‘(b) ADMINISTRATIVE PROVISIONS.—The Executive

22 Director and staff of the Commission may be appointed

23 without regard to the provisions of title 5, United States

24 Code, governing appointments in the competitive service,

25 and except as provided in subsection (a), may be paid
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1 without regard to the provisions of chapter 51 and sub2 chapter III of chapter 53 of such title relating to classi3 fication and General Schedule pay rates, except that the

4 Executive Director so appointed may not receive pay in

5 excess of the annual rate of basic pay payable for a posi6 tion at ES–1 of the Senior Executive Pay Schedule under

7 section 5832 of title 5, United States Code.

8 ‘‘(c) DETAIL OF ADDITIONAL PERSONNEL.—Upon

9 request to the Chairperson, the head of any Federal de10 partment or agency may detail any of the personnel of

11 such agency to the Commission to assist the Commission

12 in carrying out its duties under this title without regard

13 to section 3341 of title 5, United States Code.’’.

14 (e) POWERS OF THE COMMISSION.—Section 405 of

15 the Women’s Business Ownership Act of 1988 (15 U.S.C.

16 631 note) is amended—

17 (1) by striking ‘‘Council’’ each place it appears

18 and inserting ‘‘Commission’’; and

19 (2) by adding at the end the following new sub20 section:

21 ‘‘(f) COOPERATION WITH PRIVATE ENTITIES.—

22 ‘‘(1) IN GENERAL.—Subject to the require23 ments of paragraph (2), the Commission may carry

24 out its duties under section 402 through cooperation

25 with private nonprofit and for-profit entities.
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1 ‘‘(2) RESTRICTION.—If the Commission cooper2 ates with private entities pursuant to paragraph (1),

3 the Commission shall ensure that—

4 ‘‘(A) the Commission receives appropriate

5 recognition and publicity;

6 ‘‘(B) the cooperation does not constitute or

7 imply an endorsement by the Commission of the

8 products and services of the cosponsor; and

9 ‘‘(C) the Commission avoids unnecessary

10 promotion of the products and services of the

11 cosponsor and minimizes utilization of any 1 co12 sponsor in a marketing area.’’.

13 (f) REPORTS.—Section 406 of the Women’s Business

14 Ownership Act of 1988 (15 U.S.C. 631 note) is amend15 ed—

16 (1) by striking ‘‘Council’’ each place it appears

17 and inserting ‘‘Commission’’;

18 (2) by striking ‘‘December 31, 1989’’ and in19 serting ‘‘not later than 1 year after the date of en20 actment of the Small Business Administration Reau21 thorization and Amendment Act of 1994’’; and

22 (3) by striking ‘‘based upon its reviews con23 ducted under section 402’’.
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1 (g) AUTHORIZATION.—Section 407 of the Women’s

2 Business Ownership Act of 1988 (15 U.S.C. 631 note) is

3 amended—

4 (1) by striking subsection (a) and inserting the

5 following:

6 ‘‘(a) IN GENERAL.—There are authorized to be ap7 propriated to carry out this title—

8 ‘‘(1) $500,000 in fiscal year 1995;

9 ‘‘(2) $500,000 is fiscal year 1996; and

10 ‘‘(3) $100,000 in fiscal year 1997.’’; and

11 (2) by striking subsection (c).

12 (h) TRANSITION REIMBURSEMENT.—In order to fa13 cilitate the transition from the National Women’s Busi14 ness Council, established by title IV of the Women’s Busi15 ness Ownership Act of 1988, to the National Commission

16 on Women in Business established by this section, the Na17 tional Commission on Women in Business may, during the

18 30-day period beginning on the date on which the Chair19 person of the National Commission on Women in Business

20 is appointed pursuant to section 413 of this Act, reim21 burse the costs and salaries, where appropriate, of the

22 Chairperson, Executive Director, and staff of the National

23 Women’s Business Council for transition activities .

24 (i) SUNSET.—The authority of the National Commis25 sion on Women in Business established under title IV of
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1 the Women’s Business Ownership Act of 1988, as amend2 ed by this section, shall terminate on November 30, 1996.

3 TITLE V—RELIEF FROM DEBEN4 TURE PREPAYMENT PEN5 ALTIES

6 SEC. 501. SHORT TITLE.

7 This title may be cited as the ‘‘Small Business Pre8 payment Penalty Relief Act of 1994’’.

9 SEC. 502. PREPAYMENT OF DEVELOPMENT COMPANY DE10 BENTURES.

11 (a) IN GENERAL.—Title V of the Small Business In12 vestment Act of 1958 (15 U.S.C. 695 et seq.) is amended

13 by adding at the end the following new section:

14 ‘‘SEC. 508. PREPAYMENT OF DEVELOPMENT COMPANY DE15 BENTURES.

16 ‘‘(a) IN GENERAL.—

17 ‘‘(1) PREPAYMENT AUTHORIZED.—Subject to

18 the requirements set forth in subsection (b), an is19 suer of a debenture purchased by the Federal Fi20 nancing Bank and guaranteed by the Administration

21 under section 503 may, at the election of the bor22 rower whose loan secures such debenture and with

23 the approval of the Administration, prepay such de24 benture in accordance with the provisions of this sec25 tion.
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1 ‘‘(2) PROCEDURE.—

2 ‘‘(A) IN GENERAL.—In making a prepay3 ment under paragraph (1)—

4 ‘‘(i) the borrower shall pay to the

5 Federal Financing Bank an amount that is

6 equal to the sum of the unpaid principal

7 balance due on the debenture as of the

8 date of the prepayment (plus accrued in9 terest at the coupon rate on the debenture)

10 and the amount of the repurchase pre11 mium described in subparagraph (B); and

12 ‘‘(ii) the Administration shall pay to

13 the Federal Financing Bank the difference

14 between the repurchase premium paid by

15 the borrower under this subsection and the

16 repurchase premium that the Federal Fi17 nancing Bank would otherwise have re18 ceived.

19 ‘‘(B) REPURCHASE PREMIUM.—

20 ‘‘(i) IN GENERAL.—For purposes of

21 subparagraph (A)(i), the repurchase pre22 mium is the amount equal to the product

23 of—
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1 ‘‘(I) the unpaid principal balance

2 due on the debenture on the date of

3 prepayment; and

4 ‘‘(II) the applicable percentage

5 rate, as determined in accordance

6 clause (ii).

7 ‘‘(ii) APPLICABLE PERCENTAGE

8 RATE.—For purposes of clause (i)(II), the

9 applicable percentage rate means—

10 ‘‘(I) with respect to a 10-year

11 term loan, 9.5 percent;

12 ‘‘(II) with respect to a 15-year

13 term loan, 9.5 percent;

14 ‘‘(III) with respect to a 20-year

15 term loan, 10.5 percent; and

16 ‘‘(IV) with respect to a 25-year

17 term loan, 11.5 percent.

18 ‘‘(b) REQUIREMENTS.—For purposes of subsection

19 (a), the requirements of this subsection are that—

20 ‘‘(1) the debenture is outstanding and neither

21 the loan that secures the debenture nor the deben22 ture is in default on the date on which the prepay23 ment is made;

24 ‘‘(2) State, local, or personal funds, or the pro25 ceeds of a refinancing in accordance with subsection
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1 (d) of this section under the programs authorized by

2 sections 504 and 505, are used to prepay the deben3 ture; and

4 ‘‘(3) the issuer certifies that the benefits, net of

5 fees and expenses authorized herein, associated with

6 prepayment of the debenture are entirely passed

7 through to the borrower.

8 ‘‘(c) NO PREPAYMENT FEES OR PENALTIES.—No

9 fees or penalties other than those specified in this section

10 may be imposed on the issuer, the borrower, the Adminis11 tration, or any fund or account administered by the Ad12 ministration as the result of a prepayment under this sec13 tion.

14 ‘‘(d) REFINANCING LIMITATIONS.—

15 ‘‘(1) IN GENERAL.—The refinancing of a deben16 ture under sections 504 and 505, in accordance with

17 subsection (b)(2) of this section—

18 ‘‘(A) shall not exceed the amount nec19 essary to prepay existing debentures, including

20 all costs associated with the refinancing and

21 any applicable prepayment penalty or repur22 chase premium; and

23 ‘‘(B) shall be subject to the provisions of

24 sections 504 and 505 and the rules and regula25 tions promulgated thereunder, including rules
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1 and regulations governing payment of author2 ized expenses, commissions, fees, and discounts

3 to brokers and dealers in trust certificates is4 sued pursuant to section 505.

5 ‘‘(2) JOB CREATION.—An applicant for refi6 nancing under section 504 of a loan made pursuant

7 to section 503 shall not be required to demonstrate

8 that a requisite number of jobs will be created with

9 the proceeds of a refinancing.

10 ‘‘(3) LOAN PROCESSING FEE.—To cover the

11 cost of loan packaging, processing, and other admin12 istrative functions, a development company that pro13 vides refinancing under subsection (b)(2) may im14 pose a loan processing fee, not to exceed 0.5 percent

15 of the principal amount of the loan.

16 ‘‘(e) DEFINITIONS.—For purposes of this section—

17 ‘‘(1) the term ‘issuer’ means the qualified State

18 or local development company that issued a deben19 ture pursuant to section 503, which has been pur20 chased by the Federal Financing Bank; and

21 ‘‘(2) the term ‘borrower’ means a small busi22 ness concern whose loan secures a debenture issued

23 pursuant to section 503.’’.

24 (b) REGULATIONS.—Not later than 30 days after the

25 date of enactment of this Act, the Administration shall
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1 promulgate such regulations as may be necessary to carry

2 out this section, including regulations establishing a dead3 line for receipt of applications for prepayment and refi4 nancing under title V of the Small Business Investment

5 Act of 1958.

6 (c) AUTHORIZATION.—There are authorized to be ap7 propriated such sums as may be necessary to carry out

8 this section.

9 TITLE VI—MISCELLANEOUS

10 AMENDMENTS

11 SEC. 601. CONSOLIDATION OF FUNDING ACCOUNTS.

12 (a) IN GENERAL.—Section 4(c) of the Small Busi13 ness Act (15 U.S.C. 633(c)) is amended by striking

14 ‘‘(c)(1) There’’ and all that follows through paragraph (4)

15 and inserting the following:

16 ‘‘(c) LOAN LIQUIDATION FUND.—

17 ‘‘(1) IN GENERAL.—

18 ‘‘(A) ESTABLISHMENT.—There is hereby

19 established in the United States Treasury a

20 fund to be known as the Loan Liquidation

21 Fund (hereafter in this subsection referred to

22 as the ‘Fund’).

23 ‘‘(B) AMOUNTS CONTAINED IN FUND.—All

24 amounts received by the Administration prior to

25 October 1, 1991, from the repayment of loans
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1 and debentures, payments of interest, and other

2 receipts arising out of transactions entered into

3 by the Administration pursuant to section 5(e),

4 5(g), 7(a), 7(b), 7(c)(2), 7(e), 7(h), 7(l), 7(m),

5 or 8(a) of this Act, or title III, IV, or V of the

6 Small Business Investment Act of 1958, shall

7 be paid into the Fund. Balances existing in the

8 revolving funds on or after the effective date of

9 this paragraph shall be transferred to the Fund

10 on such date.

11 ‘‘(C) OPERATING EXPENSES.—The Fund

12 shall have available, without fiscal year limita13 tion, such funds as may be necessary to finance

14 the operational needs of the Fund.

15 ‘‘(2) ANNUAL STATUS REPORT.—As soon as

16 practicable after the end of each fiscal year, the Ad17 ministration shall submit to the Committees on

18 Small Business and Appropriations of the Senate

19 and the House of Representatives a complete report

20 on the status of the Fund.’’.

21 (b) INTEREST PAYMENTS TO TREASURY.—Section

22 4(c) of the Small Business Act (15 U.S.C. 633(c)) is

23 amended—

24 (1) by redesignating paragraph (5) as para25 graph (3); and
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1 (2) in paragraph (3)(B), as redesignated, by

2 striking clause (ii) and inserting the following:

3 ‘‘(ii) Upon the expiration of each fiscal year, the Ad4 ministration shall pay into the miscellaneous receipts of

5 the United States Treasury the actual interest the Admin6 istration has collected during the preceding fiscal year on

7 all financings made under the authority of this Act.’’.

8 SEC. 602. IMPOSITION OF FEES.

9 Section 5(b) of the Small Business Act (15 U.S.C.

10 634(b)) is amended—

11 (1) in paragraph (10), by striking ‘‘and’’ at the

12 end;

13 (2) in paragraph (11), by striking the period at

14 the end and inserting a semicolon; and

15 (3) by adding at the end the following new

16 paragraphs:

17 ‘‘(12) impose, retain, and use only those fees

18 which are specifically authorized by law or which are

19 in effect on September 30, 1994, and in the

20 amounts and at the rates in effect on such date, ex21 cept that the Administrator may, subject to approval

22 in appropriations Acts, impose, retain, and utilize,

23 additional fees—

24 ‘‘(A) not to exceed $300 for each loan

25 servicing action requested after disbursement of
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1 the loan, including any substitution of collat2 eral, loan assumption, release or substitution of

3 a guarantor, reamortization, or similar action;

4 and

5 ‘‘(B) to recover the direct, incremental cost

6 involved in the production and dissemination of

7 compilations of information produced by the

8 Administration under the authority of the Small

9 Business Act and the Small Business Invest10 ment Act of 1958; and

11 ‘‘(13) collect, retain and utilize, subject to ap12 proval in appropriations Acts, any amounts collected

13 by fiscal transfer agents and not used by such agent

14 as payment of the cost of loan pooling or debenture

15 servicing operations, except that amounts collected

16 under this paragraph shall be utilized solely to facili17 tate the administration of the program that gen18 erated the excess amounts.’’.

19 SEC. 603. JOB CREATION AND COMMUNITY BENEFIT.

20 Section 7(a)(21) of the Small Business Act (15

21 U.S.C. 636(a)(21)) is amended by adding at the end the

22 following new subparagraph:

23 ‘‘(E) JOB CREATION AND COMMUNITY

24 BENEFIT.—In providing assistance under this

25 paragraph, the Administration shall develop
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1 procedures to ensure, to the maximum extent

2 practicable, that such assistance is used for

3 projects that—

4 ‘‘(i) have the greatest potential for—

5 ‘‘(I) creating new jobs for indi6 viduals whose employment is involun7 tarily terminated due to reductions in

8 Federal defense expenditures; or

9 ‘‘(II) preventing the loss of jobs

10 by employees of small business con11 cerns described in subparagraph

12 (A)(i); and

13 ‘‘(ii) have substantial potential for

14 stimulating new economic activity in com15 munities most affected by reductions in

16 Federal defense expenditures.’’.

17 SEC. 604. MICROLOAN PROGRAM AMENDMENTS.

18 Section 7(m)(9)(B) of the Small Business Act (15

19 U.S.C. 636(m)(9)(B)) is amended—

20 (1) by inserting ‘‘and loan guarantees’’ after

21 ‘‘for loans’’; and

22 (2) by inserting after ‘‘experienced microlending

23 organizations’’ the following: ‘‘and national and re24 gional nonprofit organizations that have dem-
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1 onstrated experience in providing training support

2 for microenterprise development and financing.’’.

3 SEC. 605. TECHNICAL CLARIFICATION.

4 (a) DEFENSE CONVERSION.—Section 7(a)(21)(A) of

5 the Small Business Act (15 U.S.C. 636(a)(21)(A)) is

6 amended by striking ‘‘under the’’ and inserting ‘‘on a

7 guaranteed basis under the’’.

8 (b) ADDITIONAL TECHNICAL CLARIFICATION.—Sec9 tion 204 of Public Law 94–305 (15 U.S.C. 634d) is

10 amended by striking ‘‘section 202’’ and inserting ‘‘this

11 title’’.

12 SEC. 606. SECONDARY MARKET STUDY DUE DATE.

13 Section 6 of the Small Business Credit Enhancement

14 Act of 1993 (15 U.S.C. 634 note) is amended by striking

15 ‘‘16 months after the date of enactment’’ and inserting

16 ‘‘November 1, 1994’’.

17 SEC. 607. STUDY AND DATA BASE: GUARANTEED BUSINESS

18 LOAN PROGRAM AND DEVELOPMENT COM19 PANY PROGRAM.

20 (a) STUDY AUTHORIZED.—The Administration shall

21 conduct a study of—

22 (1) the Guaranteed Business Loan program

23 under section 7(a) of the Small Business Act; and
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1 (2) the Development Company program under

2 sections 502, 503, and 504 of the Small Business

3 Investment Act of 1958.

4 (b) EVALUATION.—After conducting the study under

5 subsection (a), the Administration shall evaluate the per6 formance of the programs described in paragraphs (1) and

7 (2) of subsection (a) on an annual and aggregated basis

8 during the most recent 4-year period for which data are

9 available. Such evaluation shall focus on the following fac10 tors:

11 (1) The number, dollar amount, and average

12 size of the loans or financings under each program.

13 (2) The number, dollar amount, and average

14 size of the loans or financings made to woman15 owned and minority-owned businesses under each

16 program.

17 (3) The geographic distribution of the loans or

18 financings under each program.

19 (4) The jobs created or maintained attributable

20 to the loans or financings under each program.

21 (5) The number, dollar amount, and average

22 size of the loans or financings on which borrowers

23 defaulted under each program.
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1 (6) The amounts recovered by the Administra2 tion after default, foreclosure, or otherwise under

3 each program.

4 (7) The number of companies which are no

5 longer in business despite receiving the loans or

6 financings under each program.

7 (8) The taxes paid by businesses which received

8 the loans or financings under each program.

9 (9) Such other information as the Administra10 tion determines to be appropriate for a complete

11 evaluation of each program.

12 (c) CONTRACTING WITH INDEPENDENT ENTITIES.—

13 In carrying out subsections (a) and (b), the Administra14 tion may contract with an independent entity or entities—

15 (1) to conduct the study pursuant to subsection

16 (a); and

17 (2) to develop a database of information to en18 able the Administration to maintain and access, on

19 an ongoing basis, current information relating to the

20 factors set forth in subsection (b).

21 (d) DATE.—The study authorized by subsection (a)

22 shall be completed not later than September 30, 1995.

23 SEC. 608. SBIR VENDORS.

24 Section 9(q)(2) of the Small Business Act (15 U.S.C.

25 638(q)(2)) is amended to read as follows:
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1 ‘‘(2) VENDOR SELECTION.—Each agency may

2 select a vendor to assist small business concerns to

3 meet the goals listed in paragraph (1) for a term not

4 to exceed 3 years. Such selection shall be competitive

5 and shall utilize merit-based criteria.’’.

6 SEC. 609. PROGRAM EXTENSION.

7 Section 602(e) of the Business Opportunity Develop8 ment Reform Act of 1988 (15 U.S.C. 637 note) is amend9 ed by striking ‘‘September 30, 1994’’, and inserting ‘‘Sep10 tember 30, 1995’’.

11 SEC. 610. PROHIBITION ON THE USE OF FUNDS FOR INDI12 VIDUALS NOT LAWFULLY WITHIN THE UNIT13 ED STATES.

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

15 is amended by adding at the end the following new sub16 section:

17 ‘‘(i) PROHIBITION ON THE USE OF FUNDS FOR INDI18 VIDUALS NOT LAWFULLY WITHIN THE UNITED

19 STATES.—None of the funds made available pursuant to

20 this Act may be used to provide any direct benefit or as21 sistance to any individual in the United States if the Ad22 ministrator or the official to which the funds are made

23 available receives notification that the individual is not

24 lawfully within the United States.’’.
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1 SEC. 611. OFFICE OF ADVOCACY EMPLOYEES.

2 Section 204 of Public Law 94–305 (15 U.S.C. 634d)

3 is amended—

4 (1) in the matter preceding paragraph (1) by

5 striking ‘‘after consultation with and subject to the

6 approval of the Administrator,’’; and

7 (2) in paragraph (1), by striking ‘‘ten’’ and in8 serting ‘‘14’’.

9 SEC. 612. PROHIBITION ON THE PROVISION OF ASSIST10 ANCE.

11 Section 4 of the Small Business Act (15 U.S.C. 633)

12 is amended by adding at the end the following new sub13 section:

14 ‘‘(e) PROHIBITION ON THE PROVISION OF ASSIST15 ANCE.—Notwithstanding any other provision of law, the

16 Administration is prohibited from providing any financial

17 or other assistance to any business concern or other per18 son engaged in the production or distribution of any prod19 uct or service that is determined to be obscene.’’.

20 SEC. 613. CERTIFICATION OF COMPLIANCE WITH CHILD

21 SUPPORT OBLIGATIONS.

22 Section 4 of the Small Business Act (15 U.S.C. 633),

23 as amended by section 612, is amended by adding at the

24 end the following new subsection:

25 ‘‘(f) CERTIFICATION OF COMPLIANCE WITH CHILD

26 SUPPORT OBLIGATIONS.—
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1 ‘‘(1) IN GENERAL.—Each applicant for finan2 cial assistance under this Act, including an applicant

3 for a direct loan or a loan guarantee, shall certify

4 that the applicant is not in violation of the terms of

5 any—

6 ‘‘(A) administrative order;

7 ‘‘(B) court order; or

8 ‘‘(C) repayment agreement entered into be9 tween the applicant and the custodial parent or

10 State agency providing child support enforce11 ment services,

12 that requires the applicant to pay child support, as

13 such term is defined in section 462(b) of the Social

14 Security Act.

15 ‘‘(2) ENFORCEMENT.—Not later than 6 months

16 after the date of enactment of this subsection, the

17 Administration shall issue such regulations as may

18 be necessary to enforce compliance the requirements

19 of this subsection.’’.

Passed the Senate August 18, 1994.

Attest:

Secretary.
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