I 

113TH CONGRESS 

2D SESSION H. R. 4876 

To amend the Small Business Act to provide for contracting preferences 

and other benefits for emerging business enterprises, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 17, 2014 

Mr. CARSON of Indiana (for himself, Mr. ENYART, Mr. CONYERS, Mr. 

SABLAN, and Ms. BROWN of Florida) introduced the following bill; which 

was referred to the Committee on Small Business 

A BILL 

To amend the Small Business Act to provide for contracting 

preferences and other benefits for emerging business enterprises, 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 ‘‘Emerging Business 

5 Encouragement Act of 2014’’. 

6 SEC. 2. EMERGING BUSINESS ENTERPRISES. 

7 (a) DESIGNATION.—Section 3 of the Small Business 

8 Act (15 U.S.C. 632) is amended by adding at the end the 

9 following: 


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1 ‘‘(dd) EMERGING BUSINESS ENTERPRISES.— 

2 ‘‘(1) IN GENERAL.—Not later than the date 

3 that is 1 year after the date of enactment of this 

4 paragraph, for each industry category for which the 

5 Administrator established a size standard under this 

6 subsection, the Administrator shall by rule establish 

7 procedures for designating a small business concern 

8 in that industry category as an emerging business 

9 enterprise. Such procedures shall include the criteria 

10 under paragraph (2), and a process for appealing 

11 decisions of the Administrator on designations. Such 

12 a designation shall expire on the date that the small 

13 business concern is no longer in compliance with 

14 such criteria, except that— 

15 ‘‘(A) in the case of an emerging business 

16 enterprise that receives a designation as such 

17 but which existed as a business entity prior to 

18 such designation, the designation shall not ex19 pire by reason of the emerging business enter20 prise being more than 5 years old; instead, the 

21 designation shall expire on the date that is 5 

22 years after the date of the designation; and 

23 ‘‘(B) if the emerging business enterprise 

24 exceeds the size limitation described in the cri25 terion under paragraph (2)(A) following desVerDate Mar 15 2010 03:23 Jun 18, 2014 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4876.IH H4876

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1 ignation as an emerging business enterprise, 

2 the designation shall expire only if the size is 

3 50 percent or more of the maximum size of a 

4 small business concern within that industry cat5 egory. 

6 The rulemaking under this paragraph shall include 

7 a procedure for self certification as an emerging 

8 business enterprise, for annual submission of docu9 mentation establishing eligibility for designation as 

10 an emerging business enterprise, and for periodic 

11 audits of emerging business enterprises based on 

12 such documentation. 

13 ‘‘(2) CRITERIA FOR DESIGNATION.—The Ad14 ministrator shall establish criteria for designation of 

15 an emerging business enterprise, which shall include 

16 the following: 

17 ‘‘(A) NUMBER OF EMPLOYEES.—That the 

18 small business concern employs, in the Adminis19 trator’s determination a number of employees 

20 that is less than the larger of— 

21 ‘‘(i) not more than 10 percent of the 

22 number of employees that a small business 

23 concern within that industry category may 

24 employ, if that small business concern is so 

25 classified by reason of a size standard 


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1 under section 3(a) pertaining to the num2 ber of employees of the concern; or 

3 ‘‘(ii) 25 employees. 

4 ‘‘(B) AGE OF BUSINESS.—That the small 

5 business concern is, in the Administrator’s de6 termination, not more than 5 years old. 

7 ‘‘(C) SALARY REQUIREMENTS.—That the 

8 small business concern does not, in the Admin9 istrator’s determination, pay to an individual 

10 who owns any part of the concern or who is in 

11 a management position a salary greater than 

12 200 percent of the mean annual salary for 

13 Managers of Companies and Enterprises or the 

14 equivalent from the most recent Employment 

15 and Wage Estimates developed by the Secretary 

16 of Labor. 

17 ‘‘(3) PUBLIC NOTIFICATION.—The Adminis18 trator shall take appropriate action to publicize the 

19 establishment of the procedures for designations 

20 under this paragraph, including by conducting out21 reach to eligible small business concerns. 

22 ‘‘(4) CONTRACTOR TRAINING.—The Adminis23 trator shall provide for training regarding Federal 

24 procurement on an Internet Web site of the AdminVerDate Mar 15 2010 03:23 Jun 18, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4876.IH H4876

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1 istrator, which shall be available to the public at no 

2 charge.’’. 

3 (b) CONTRACTING PREFERENCE.—Section 15(g)(2) 

4 of the Small Business Act (15 U.S.C. (g)(2)) is amended 

5 by adding at the end the following: 

6 ‘‘(G) EMERGING BUSINESS ENTER7 PRISES.— 

8 ‘‘(i) IN GENERAL.—The head of each 

9 Federal agency shall, after consultation 

10 with the Administrator, establish goals for 

11 participation by emerging business enter12 prises designated under section 3(a)(6) in 

13 not less than 5 percent of all contracts, in14 cluding prime contracts and subcontracts, 

15 for each fiscal year. The head of the agen16 cy may give preference in making contract 

17 awards to such emerging business enter18 prises and shall make consistent efforts to 

19 annually expand participation by emerging 

20 business enterprises from each industry 

21 category in procurement contracts of the 

22 agency. 

23 ‘‘(ii) REPORTS.— 

24 ‘‘(I) REPORTS FROM AGEN25 CIES.—At the conclusion of each fiscal 


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1 year, the head of each Federal agency 

2 shall report to the Administrator on 

3 the extent of participation by emerg4 ing business enterprises in procure5 ment contracts of such agency. Such 

6 reports shall contain appropriate jus7 tifications for failure to meet the goals 

8 established under this subparagraph. 

9 ‘‘(II) REPORTS TO CONGRESS.— 

10 The Administrator shall annually 

11 compile and analyze the reports sub12 mitted by the individual agencies pur13 suant to subclause (I) and shall sub14 mit to the President and the Com15 mittee on Small Business and Entre16 preneurship of the Senate and the 

17 Committee on Small Business of the 

18 House of Representatives the compila19 tion and analysis, which shall include 

20 the following: 

21 ‘‘(aa) The goals in effect for 

22 each agency and the agency’s 

23 performance in attaining such 

24 goals. 


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1 ‘‘(bb) An analysis of any 

2 failure to achieve individual agen3 cy goals and the actions planned 

4 by such agency (and approved by 

5 the Administrator) to achieve the 

6 goals in the succeeding fiscal 

7 year. 

8 ‘‘(cc) The total number and 

9 dollar value of prime contracts 

10 and subcontracts awarded to 

11 emerging business enterprises. 

12 ‘‘(III) ANNUAL PRESIDENTIAL

13 REPORT ON THE STATE OF SMALL

14 BUSINESS.—The President shall in15 clude the information required by sub16 clause (II) in each annual report to 

17 the Congress on the state of small 

18 business prepared pursuant to section 

19 303(a) of the Small Business Eco20 nomic Policy Act of 1980 (15 U.S.C. 

21 631b(a)).’’. 

22 (c) AMENDMENTS TO SBA EXPRESS.—Section 

23 7(a)(31) of the Small Business Act (15 U.S.C. 

24 636(a)(31)) is amended by adding at the end the fol25 lowing: 


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1 ‘‘(G) EMERGING BUSINESS ENTER2 PRISES.— 

3 ‘‘(i) IN GENERAL.—The Administrator 

4 may make a loan under the Express Loan 

5 Program to an emerging business enter6 prise designated under section 3(dd), ex7 cept that such loans shall be made in ac8 cordance with the terms of this subpara9 graph. 

10 ‘‘(ii) GUARANTY RATE.—The guaranty 

11 rate of such a loan shall be in accordance 

12 with the following: 

13 ‘‘(I) Except as otherwise provided 

14 in this clause, 65 percent. 

15 ‘‘(II) Except as provided in sub16 clause (III), if, in a report submitted 

17 under clause (iii), the total number of 

18 loans made and the total amount 

19 loaned by a lender is greater by 10 

20 percent than the prior fiscal year, 75 

21 percent. 

22 ‘‘(III) If, in a report submitted 

23 under clause (iii), the total rate of de24 fault on loans issued under subclauses 

25 (I) and (II) is greater by 10 percent 


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1 than the prior year, 50 percent in the 

2 succeeding fiscal year. 

3 ‘‘(iii) REPORTS.—On the date that is 

4 1 year after the end if the first fiscal year 

5 for which a loan is first guaranteed under 

6 this subparagraph, and annually there7 after, each lender making a loan guaran8 teed under this section shall report to the 

9 Administrator total number of loans made 

10 during the preceding fiscal year, the total 

11 amount loaned, and the default rate for all 

12 guaranteed loans. 

13 ‘‘(iv) VERIFICATION.—A lender mak14 ing a loan guaranteed under this section 

15 shall verify the status of a business con16 cern as an emerging business enterprise 

17 before issuing a loan. 

18 ‘‘(v) SANCTION.—If a business con19 cern has received a loan under this sub20 paragraph and that business concern has 

21 fraudulently misrepresented its status as 

22 an emerging business enterprise, that busi23 ness concern shall repay the amount of the 

24 loan to the lender (from which amount the 

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1 antee paid on the loan), and shall in addi2 tion pay a fine in an amount determined 

3 by the Administrator.’’. 

4 SEC. 3. RULEMAKINGS. 

5 (a) SELF-CERTIFICATION.—Not later than 180 days 

6 after the date of enactment of this Act, the Administrator 

7 shall by rule establish a process for initial self-certification 

8 of emerging business enterprises for purposes of participa9 tion in Federal contracts, and eligibility for Express Loans 

10 under section 7(a)(31)(G) of the Small Business Act. 

Æ 


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