II 

★(Star Print)

Calendar No. 577 

109TH CONGRESS 

2D SESSION S. 3778 

To reauthorize and improve the Small Business Act and the Small Business 

Investment Act of 1958, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 2, 2006 

Ms. SNOWE, from the Committee on Small Business and Entrepreneurship, 

reported the following original bill; which was read twice and placed on 

the calendar 

A BILL 

To reauthorize and improve 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 Reauthorization and Improvements Act 

6 of 2006’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—REAUTHORIZATION OF PROGRAMS 

Sec. 101. Reauthorization of programs in Small Business Act. 

Sec. 102. Other reauthorizations. 

Sec. 103. Conforming technical change in average smaller loan size. 

Sec. 104. Accurate subsidy model. 

Sec. 105. Inclusion of persons with disabilities. 

TITLE II—NATIONAL PREFERRED LENDERS PROGRAM 

Sec. 201. National Preferred Lenders Program. 

Sec. 202. Maximum loan amount. 

Sec. 203. Alternative size standard. 

Sec. 204. Minority small business development. 

Sec. 205. Lowering of fees. 

TITLE III—SMALL BUSINESS INVESTMENT ACT OF 1958 

Subtitle A—Debentures and Securities 

Sec. 301. Participating debenture companies. 

Sec. 302. Participating securities. 

Subtitle B—Development Companies 

Sec. 321. Development company loan programs. 

Sec. 322. Loan liquidations. 

Sec. 323. Additional equity injections. 

Sec. 324. Businesses in low-income areas. 

Sec. 325. Combinations of certain goals. 

Sec. 326. Maximum 504 and 7(a) loan eligibility. 

Sec. 327. Refinancing under the Local Development Business Loan Program. 

Sec. 328. Technical correction. 

Sec. 329. Definitions for the Small Business Investment Act of 1958. 

Sec. 330. Repeal of sunset on reserve requirements for premier certified lenders. 

Sec. 331. Certified development companies. 

Sec. 332. Conforming amendments. 

Sec. 333. Closing costs. 

Sec. 334. Definition of rural. 

Sec. 335. Regulations and effective date. 

Sec. 336. Low-income geographic areas. 

Sec. 337. Limitation on time for final approval of companies. 

TITLE IV—DISASTER RESPONSE 

Subtitle A—Private Disaster Loans 

Sec. 401. Private disaster loans. 

Sec. 402. Technical and conforming amendments. 

Subtitle B—Disaster Relief and Reconstruction 

Sec. 421. Definition of disaster area. 

Sec. 422. Disaster loans to nonprofits. 


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Sec. 423. Disaster loan amounts. 

Sec. 424. Small business development center portability grants. 

Sec. 425. Assistance to out-of-State businesses. 

Sec. 426. Outreach programs. 

Sec. 427. Small business bonding threshold. 

Sec. 428. Small business participation. 

Sec. 429. Emergency procurement authority. 

Sec. 430. Paperwork reciprocity for small disaster contractors. 

Sec. 431. Small business multiple award disaster contracts. 

Sec. 432. Contracting priority for local small businesses. 

Sec. 433. Termination of program. 

Sec. 434. Increasing collateral requirements. 

Subtitle C—Disaster Response 

Sec. 451. Definitions. 

Sec. 452. State bridge loan guarantee. 

Sec. 453. Catastrophic national disasters. 

Sec. 454. Public awareness of disaster declaration and application periods. 

Sec. 455. Consistency between Administration regulations and standard operating procedures. 

Sec. 456. Processing disaster loans. 

Sec. 457. Development and implementation of major disaster response plan. 

Sec. 458. Congressional oversight. 

Subtitle D—Energy Emergencies 

Sec. 471. Findings. 

Sec. 472. Small business energy emergency disaster loan program. 

Sec. 473. Agricultural producer emergency loans. 

Sec. 474. Guidelines and rulemaking. 

Sec. 475. Reports. 

TITLE V—VETERANS AND MEMBERS OF THE GUARD AND 

RESERVE 

Sec. 501. Definitions. 

Subtitle A—Veterans 

Sec. 521. Findings. 

Sec. 522. Increased funding for the Office of Veterans Business Development. 

Sec. 523. Extension of Advisory Committee on Veterans Business Affairs. 

Sec. 524. Relief from time limitations for veteran-owned small businesses. 

Subtitle B—Guard and Reserve 

Sec. 541. Guard and Reserve loans. 

Sec. 542. Study of insurance program for members of the Guard and Reserve. 

Sec. 543. Grant assistance for military Reservists’ small business concerns. 

Subtitle C—Veterans Corporation 

Sec. 561. Purposes of the Corporation. 

Sec. 562. Management of the Corporation. 

Sec. 563. Timing of transfer of Advisory Committee duties. 

Sec. 564. Authorization of appropriations. 

Sec. 565. Privatization. 


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TITLE VI—ENERGY LOANS FOR SMALL BUSINESS CONCERNS 

Sec. 601. Express loans for renewable energy and energy efficiency. 

TITLE VII—HEALTH INSURANCE 

Sec. 701. Purpose. 

Sec. 702. Definitions. 

Sec. 703. Small Business Health Insurance Information Pilot Program. 

Sec. 704. Reports. 

Sec. 705. Authorization of appropriations. 

TITLE VIII—WOMEN’S SMALL BUSINESS OWNERSHIP PROGRAMS 

Sec. 801. Office of Women’s Business Ownership. 

Sec. 802. Women’s Business Center Program. 

Sec. 803. National Women’s Business Council. 

Sec. 804. Interagency Committee on Women’s Business Enterprise. 

Sec. 805. Preserving the independence of the National Women’s Business 

Council. 

TITLE IX—INTERNATIONAL TRADE 

Sec. 901. Small Business Administration Associate Administrator for International Trade. 

Sec. 902. Office of International Trade. 

Sec. 903. International trade loans. 

TITLE X—CONTRACT BUNDLING 

Sec. 1001. Presidential policy. 

Sec. 1002. Leadership and oversight. 

Sec. 1003. Removal of impediments to contract bundling database implementation. 

TITLE XI—SUBCONTRACTING INTEGRITY 

Sec. 1101. GAO recommendations on subcontracting misrepresentations. 

Sec. 1102. Small business subcontracting bait-and-switch fraud. 

Sec. 1103. Evaluating subcontracting participation. 

Sec. 1104. Pilot program on direct payments to subcontractors. 

Sec. 1105. Pilot program. 

TITLE XII—SMALL BUSINESS PROCUREMENT PROGRAMS 

IMPROVEMENT 

Sec. 1201. Definitions. 

Subtitle A—HUBZone Program 

Sec. 1211. HUBZone reauthorization. 

Sec. 1212. Equity for suburban HUBZones. 

Subtitle B—Service-Disabled Veteran-Owned Small Business Program 

Sec. 1221. Certification. 

Sec. 1222. Temporary waiver. 

Sec. 1223. Transition period for surviving spouses or permanent care givers. 

Sec. 1224. Contracting authority. 


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Subtitle C—Women-Owned Small Business Program 

Sec. 1231. Implementation deadline. 

Sec. 1232. Certification. 

Subtitle D—Small Disadvantaged Business Program 

Sec. 1241. Certification. 

Sec. 1242. Net worth threshold. 

Subtitle E—BusinessLINC Program 

Sec. 1251. BusinessLINC Program. 

TITLE XIII—ACQUISITION PROCESS 

Sec. 1301. Procurement improvements. 

Sec. 1302. Reservation of prime contract awards for small businesses. 

Sec. 1303. GAO study of reporting systems. 

Sec. 1304. Meeting small business goals. 

Sec. 1305. Micropurchase guidelines. 

Sec. 1306. Reporting on overseas contracts. 

Sec. 1307. Agency accountability. 

TITLE XIV—SMALL BUSINESS SIZE AND STATUS INTEGRITY 

Sec. 1401. Policy and presumptions. 

Sec. 1402. Annual certification. 

Sec. 1403. SBA suspensions and debarments authority. 

Sec. 1404. Meaningful protests of small business size and status. 

Sec. 1405. Training for contracting and enforcement personnel. 

Sec. 1406. Protests of sole source awards. 

Sec. 1407. Small business size and status for purpose of multiple award contracts. 

Sec. 1408. Size standards development. 

Sec. 1409. Full-time employee equivalents. 

TITLE XV—SMALL BUSINESS INNOVATION RESEARCH AND 

SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAMS 

Sec. 1501. Definitions. 

Sec. 1502. Congressional findings and policy. 

Subtitle A—Small Business Innovation Leadership 

Sec. 1511. Status of the SBA Office of Technology; National Advisory Board; 

transfer plan. 

Subtitle B—Fair Access to Federal Innovations Investments 

Sec. 1521. Accuracy in funding base calculations; Comptroller General’s audits. 

Sec. 1522. SBIR cap increase. 

Sec. 1523. STTR cap increase. 

Sec. 1524. Adjustments in SBIR and STTR award levels. 

Sec. 1525. Majority-venture investments in SBIR firms. 

Subtitle C—Acquisition of Small Business Innovations 


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Sec. 1531. National SBIR and STTR technology insertion goal; reporting requirements. 

Sec. 1532. Intellectual property protections for small business innovations. 

Sec. 1533. SBIR and STTR special acquisition preference. 

Sec. 1534. SBIR and STTR mentor-prote ́ge ́ programs. 

Sec. 1535. Subcontracting with Federal laboratories and research and development centers. 

Sec. 1536. Innovation commercialization pilot programs. 

Sec. 1537. Enforcement. 

Subtitle D—Technical and Financial Assistance for Small Business 

Innovation 

Sec. 1541. Reauthorization and enhancement of State, local, and rural innovation assistance programs. 

Sec. 1542. Continued evaluation by the National Academy of Sciences. 

Sec. 1543. Phase II innovation development challenge pilot program. 

Sec. 1544. Encouraging innovation in energy efficiency. 

Sec. 1545. SBIR–STEM Workforce Development Grant Pilot Program. 

Subtitle E—Implementation 

Sec. 1551. Conforming amendments to the SBIR and the STTR policy directives. 

TITLE XVI—NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT 

PROGRAM 

Sec. 1601. Short title. 

Sec. 1602. Native American Small Business Development Program. 

Sec. 1603. Pilot programs. 

TITLE XVII—NATIONAL SMALL BUSINESS REGULATORY 

ASSISTANCE 

Sec. 1701. Short title. 

Sec. 1702. Purpose. 

Sec. 1703. Small Business Regulatory Assistance Pilot Program. 

Sec. 1704. Rulemaking. 

TITLE XVIII—INTERMEDIARY LENDING PILOT PROGRAM 

Sec. 1801. Short title. 

Sec. 1802. Findings. 

Sec. 1803. Small business intermediary lending pilot program. 

TITLE XIX—OTHER PROVISIONS 

Sec. 1901. Compliance assistance. 

Sec. 1902. Appointment of officials. 

Sec. 1903. Second-stage Pilot Program. 

Sec. 1904. PRIME reauthorization and transfer to the Small Business Act. 

Sec. 1905. Child Care Lending Pilot Program. 

Sec. 1906. Study on the impact of the low documentation loan program. 

Sec. 1907. Enforcement Ombudsman. 

Sec. 1908. Minority entrepreneurship and innovation pilot program. 

Sec. 1909. Office of Native American Affairs pilot program. 

Sec. 1910. Institutions of higher education. 


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1 SEC. 2. DEFINITIONS. 

2 In this Act— 

3 (1) the terms ‘‘Administration’’ and ‘‘Adminis4 trator’’ mean the Small Business Administration 

5 and the Administrator thereof, respectively; 

6 (2) the term ‘‘small business concern’’ has the 

7 same meaning as in section 3 of the Small Business 

8 Act (15 U.S.C. 632); and 

9 (3) the term ‘‘small business concern owned 

10 and controlled by socially and economically disadvan11 taged individuals’’ has the same meaning as in sec12 tion 8 of the Small Business Act (15 U.S.C. 637). 

13 TITLE I—REAUTHORIZATION OF 

14 PROGRAMS 

15 SEC. 101. REAUTHORIZATION OF PROGRAMS IN SMALL 

16 BUSINESS ACT. 

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

18 amended— 

19 (1) in section 7— 

20 (A) in subsection (b)(1)(C), by striking 

21 ‘‘fiscal years 2000 through 2004’’ and inserting 

22 ‘‘fiscal years 2007 through 2009’’; and 

23 (B) in subsection (m)— 

24 (i) in paragraph (4)(F)(ii), by striking 

25 ‘‘not more than 20’’ and all that follows 

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1 ing ‘‘not more than 30 grantees in each of 

2 fiscal years 2007 through 2009, each of 

3 whom may receive a grant under this sub4 paragraph in an amount not to exceed 

5 $200,000 per year.’’; and 

6 (ii) in paragraph (12), in the matter 

7 preceding subparagraph (A), by striking 

8 ‘‘during fiscal years 1998 through 2000’’ 

9 and inserting ‘‘during fiscal years 2007 

10 through 2009’’; 

11 (2) in section 9— 

12 (A) by striking subsection (m); 

13 (B) in subsection (n)(1), by striking 

14 ‘‘through fiscal year 2009’’; and 

15 (C) in subsection (s)(2), by striking ‘‘fiscal 

16 years 2000 through 2005’’ and inserting ‘‘fiscal 

17 years 2007 through 2009’’; 

18 (3) in section 20, by striking subsections (d) 

19 and (e) and inserting the following: 

20 ‘‘(d) FISCAL YEAR 2007.— 

21 ‘‘(1) PROGRAM LEVELS.—The following pro22 gram levels are authorized for fiscal year 2007: 

23 ‘‘(A) For the programs authorized by this 

24 Act, the Administration is authorized to 

25 make— 


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1 ‘‘(i) $80,000,000 in technical assist2 ance grants, as provided in section 7(m); 

3 and 

4 ‘‘(ii) $110,000,000 in direct loans, as 

5 provided in 7(m). 

6 ‘‘(B) For the programs authorized by this 

7 Act, the Administration is authorized to make 

8 $27,050,000,000 in deferred participation loans 

9 and other financings, and of such sum, the Ad10 ministrator is authorized to make— 

11 ‘‘(i) $18,000,000,000 in general busi12 ness loans, as provided in section 7(a); 

13 ‘‘(ii) $8,500,000,000 in certified de14 velopment company financings, as provided 

15 in section 7(a)(13) and as provided in sec16 tion 504 of the Small Business Investment 

17 Act of 1958; 

18 ‘‘(iii) $500,000,000 in loans, as pro19 vided in section (7)(a)(21); and 

20 ‘‘(iv) $50,000,000 in loans, as pro21 vided in section 7(m). 

22 ‘‘(C) For the programs authorized by title 

23 III of the Small Business Investment Act of 

24 1958, the Administrator is authorized to 

25 make— 


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1 ‘‘(i) $500,000,000 in purchases of 

2 participating securities; and 

3 ‘‘(ii) $4,000,000,000 in guarantees of 

4 debentures. 

5 ‘‘(D) For the programs authorized by part 

6 B of title IV of the Small Business Investment 

7 Act of 1958, the Administrator is authorized to 

8 enter into guarantees not to exceed 

9 $6,500,000,000, of which not more than 50 

10 percent may be in bonds approved pursuant to 

11 section 411(a)(3) of that Act. 

12 ‘‘(E) The Administrator is authorized to 

13 make grants or enter into cooperative agree14 ments for a total of $7,000,000 for the Service 

15 Corps of Retired Executives program author16 ized by section 8(b)(1). 

17 ‘‘(2) ADDITIONAL AUTHORIZATIONS.— 

18 ‘‘(A) IN GENERAL.—There are authorized 

19 to be appropriated to the Administrator for fis20 cal year 2007, such sums as may be necessary 

21 to carry out the provisions of this Act not else22 where provided for, including administrative ex23 penses and necessary loan capital for disaster 

24 pursuant to section 7(b), and to carry out the 


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1 Small Business Investment Act of 1958, includ2 ing salaries and expenses of the Administration. 

3 ‘‘(B) LIMITATIONS.—Notwithstanding any 

4 other provision of this paragraph, for fiscal year 

5 2007— 

6 ‘‘(i) no funds are authorized to be 

7 used as loan capital for the loan program 

8 authorized by section 7(a)(21), except by 

9 transfer from another Federal department 

10 or agency to the Administration, unless the 

11 program level authorized for general busi12 ness loans under paragraph (1)(B)(I) is 

13 fully funded; and 

14 ‘‘(ii) the Administration may not ap15 prove loans on its own behalf or on behalf 

16 of any other Federal department or agen17 cy, by contract or otherwise, under terms 

18 and conditions other than those specifically 

19 authorized under this Act or the Small 

20 Business Investment Act of 1958, except 

21 that it may approve loans under section 

22 7(a)(21) in gross amounts of not more 

23 than $2,000,000. 

24 ‘‘(e) FISCAL YEAR 2008.— 


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1 ‘‘(1) PROGRAM LEVELS.—The following pro2 gram levels are authorized for fiscal year 2008: 

3 ‘‘(A) For the programs authorized by this 

4 Act, the Administration is authorized to 

5 make— 

6 ‘‘(i) $80,000,000 in technical assist7 ance grants, as provided in section 7(m); 

8 and 

9 ‘‘(ii) $110,000,000 in direct loans, as 

10 provided in 7(m). 

11 ‘‘(B) For the programs authorized by this 

12 Act, the Administration is authorized to make 

13 $29,550,000,000 in deferred participation loans 

14 and other financings, and of such sum, the Ad15 ministrator is authorized to make— 

16 ‘‘(i) $19,500,000,000 in general busi17 ness loans, as provided in section 7(a); 

18 ‘‘(ii) $9,500,000,000 in certified de19 velopment company financings, as provided 

20 in section 7(a)(13) and as provided in sec21 tion 504 of the Small Business Investment 

22 Act of 1958; 

23 ‘‘(iii) $500,000,000 in loans, as pro24 vided in section (7)(a)(21); and 


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1 ‘‘(iv) $50,000,000 in loans, as pro2 vided in section 7(m). 

3 ‘‘(C) For the programs authorized by title 

4 III of the Small Business Investment Act of 

5 1958, the Administrator is authorized to 

6 make— 

7 ‘‘(i) $600,000,000 in purchases of 

8 participating securities; and 

9 ‘‘(ii) $4,000,000,000 in guarantees of 

10 debentures. 

11 ‘‘(D) For the programs authorized by part 

12 B of title IV of the Small Business Investment 

13 Act of 1958, the Administrator is authorized to 

14 enter into guarantees not to exceed 

15 $7,000,000,000, of which not more than 50 

16 percent may be in bonds approved pursuant to 

17 section 411(a)(3) of that Act. 

18 ‘‘(E) The Administrator is authorized to 

19 make grants or enter into cooperative agree20 ments for a total of $8,000,000 for the Service 

21 Corps of Retired Executives program author22 ized by section 8(b)(1). 

23 ‘‘(2) ADDITIONAL AUTHORIZATIONS.— 

24 ‘‘(A) IN GENERAL.—There are authorized 

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1 cal year 2008, such sums as may be necessary 

2 to carry out the provisions of this Act not else3 where provided for, including administrative ex4 penses and necessary loan capital for disaster 

5 pursuant to section 7(b), and to carry out the 

6 Small Business Investment Act of 1958, includ7 ing salaries and expenses of the Administration. 

8 ‘‘(B) LIMITATIONS.—Notwithstanding any 

9 other provision of this paragraph, for fiscal year 

10 2008— 

11 ‘‘(i) no funds are authorized to be 

12 used as loan capital for the loan program 

13 authorized by section 7(a)(21) except by 

14 transfer from another Federal department 

15 or agency to the Administration, unless the 

16 program level authorized for general busi17 ness loans under paragraph (1)(B)(I) is 

18 fully funded; and 

19 ‘‘(ii) the Administration may not ap20 prove loans on its own behalf or on behalf 

21 of any other Federal department or agen22 cy, by contract or otherwise, under terms 

23 and conditions other than those specifically 

24 authorized under this Act or the Small 

25 Business Investment Act of 1958, except 


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1 that it may approve loans under section 

2 7(a)(21) in gross amounts of not more 

3 than $2,000,000. 

4 ‘‘(f) FISCAL YEAR 2009.— 

5 ‘‘(1) PROGRAM LEVELS.—The following pro6 gram levels are authorized for fiscal year 2009: 

7 ‘‘(A) For the programs authorized by this 

8 Act, the Administration is authorized to 

9 make— 

10 ‘‘(i) $80,000,000 in technical assist11 ance grants, as provided in section 7(m); 

12 and 

13 ‘‘(ii) $110,000,000 in direct loans, as 

14 provided in 7(m). 

15 ‘‘(B) For the programs authorized by this 

16 Act, the Administration is authorized to make 

17 $32,050,000,000 in deferred participation loans 

18 and other financings, and of such sum, the Ad19 ministrator is authorized to make— 

20 ‘‘(i) $21,000,000,000 in general busi21 ness loans, as provided in section 7(a); 

22 ‘‘(ii) $10,500,000,000 in certified de23 velopment company financings, as provided 

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1 tion 504 of the Small Business Investment 

2 Act of 1958; 

3 ‘‘(iii) $500,000,000 in loans, as pro4 vided in section (7)(a)(21); and 

5 ‘‘(iv) $50,000,000 in loans, as pro6 vided in section 7(m). 

7 ‘‘(C) For the programs authorized by title 

8 III of the Small Business Investment Act of 

9 1958, the Administrator is authorized to 

10 make— 

11 ‘‘(i) $700,000,000 in purchases of 

12 participating securities; and 

13 ‘‘(ii) $4,000,000,000 in guarantees of 

14 debentures. 

15 ‘‘(D) For the programs authorized by part 

16 B of title IV of the Small Business Investment 

17 Act of 1958, the Administrator is authorized to 

18 enter into guarantees not to exceed 

19 $7,500,000,000, of which not more than 50 

20 percent may be in bonds approved pursuant to 

21 section 411(a)(3) of that Act. 

22 ‘‘(E) The Administrator is authorized to 

23 make grants or enter into cooperative agree24 ments for a total of $9,000,000 for the Service 


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1 Corps of Retired Executives program author2 ized by section 8(b)(1). 

3 ‘‘(2) ADDITIONAL AUTHORIZATIONS.— 

4 ‘‘(A) IN GENERAL.—There are authorized 

5 to be appropriated to the Administrator for fis6 cal year 2009, such sums as may be necessary 

7 to carry out the provisions of this Act not else8 where provided for, including administrative ex9 penses and necessary loan capital for disaster 

10 pursuant to section 7(b), and to carry out the 

11 Small Business Investment Act of 1958, includ12 ing salaries and expenses of the Administration. 

13 ‘‘(B) LIMITATIONS.—Notwithstanding any 

14 other provision of this paragraph, for fiscal year 

15 2009— 

16 ‘‘(i) no funds are authorized to be 

17 used as loan capital for the loan program 

18 authorized by section 7(a)(21) except by 

19 transfer from another Federal department 

20 or agency to the Administration, unless the 

21 program level authorized for general busi22 ness loans under paragraph (1)(B)(I) is 

23 fully funded; and 

24 ‘‘(ii) the Administration may not ap25 prove loans on its own behalf or on behalf 


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1 of any other Federal department or agen2 cy, by contract or otherwise, under terms 

3 and conditions other than those specifically 

4 authorized under this Act or the Small 

5 Business Investment Act of 1958, except 

6 that it may approve loans under section 

7 7(a)(21) in gross amounts of not more 

8 than $2,000,000.’’; 

9 (4) in section 21— 

10 (A) in subsection (a)(4)(C), by amending 

11 clause (vii) to read as follows: 

12 ‘‘(vii) AUTHORIZATION OF APPROPRIA13 TIONS.—There are authorized to be appro14 priated to carry out this subparagraph— 

15 ‘‘(I) $135,000,000 for fiscal year 

16 2007; 

17 ‘‘(II) $140,000,000 for fiscal 

18 year 2008; and 

19 ‘‘(III) $145,000,000 for fiscal 

20 year 2009.’’; and 

21 (B) in subsection (c)(3)(T), by striking 

22 ‘‘October 1, 2006’’ and inserting ‘‘October 1, 

23 2009’’; 

24 (5) in section 27(g)— 


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1 (A) in paragraph (1), by striking ‘‘fiscal 

2 years 2005 and 2006’’ and inserting ‘‘fiscal 

3 years 2007 through 2009’’; and 

4 (B) in paragraph (2), by striking ‘‘fiscal 

5 years 2005 and 2006’’ and inserting ‘‘fiscal 

6 years 2007 through 2009’’; 

7 (6) in section 32(c), by striking ‘‘to carry out 

8 this section’’ and all that follow through the period 

9 at the end and inserting ‘‘to carry out this section, 

10 $2,000,000 for each of fiscal years 2007 through 

11 2009.’’; and 

12 (7) in section 34(i), by striking ‘‘September 30, 

13 2005’’ and inserting ‘‘September 30, 2009’’. 

14 SEC. 102. OTHER REAUTHORIZATIONS. 

15 (a) NEW MARKETS VENTURE CAPITAL PROGRAM.— 

16 Section 368(a) of the Small Business Investment Act of 

17 1958 (15 U.S.C. 689q(a)) is amended, in the matter pre18 ceding paragraph (1), by striking ‘‘fiscal years 2001 

19 through 2006’’ and inserting ‘‘fiscal years 2007 through 

20 2009’’. 

21 (b) GIFT ACCEPTANCE AND COSPONSORSHIP AU22 THORITY.—Section 132(c) of the Small Business Reau23 thorization and Manufacturing Assistance Act of 2004 (15 

24 U.S.C. 633 note) is amended by striking ‘‘October 1, 

25 2006’’ and inserting ‘‘October 1, 2009’’. 


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1 SEC. 103. CONFORMING TECHNICAL CHANGE IN AVERAGE 

2 SMALLER LOAN SIZE. 

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

4 U.S.C. 636(m)(3)(F)(iii)) is amended by striking 

5 ‘‘$7,500’’ and inserting ‘‘$10,000’’. 

6 SEC. 104. ACCURATE SUBSIDY MODEL. 

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

8 636(m)) is amended by adding at the end the following: 

9 ‘‘(14) IMPROVED SUBSIDY MODEL.—The Ad10 ministrator shall develop a subsidy model for the 

11 microloan program under this subsection, to be used 

12 in the fiscal year 2008 budget, that is more accurate 

13 than the subsidy model in effect on the day before 

14 the date of enactment of this paragraph.’’. 

15 SEC. 105. INCLUSION OF PERSONS WITH DISABILITIES. 

16 Section 7(m)(1)(A)(i) of the Small Business Act (15 

17 U.S.C. 636(m)(1)(A)(i)) is amended by inserting ‘‘persons 

18 with disabilities,’’ before ‘‘and minority’’. 

19 TITLE II—NATIONAL PRE20 FERRED LENDERS PROGRAM 

21 SEC. 201. NATIONAL PREFERRED LENDERS PROGRAM. 

22 Section 7(a)(2) of the Small Business Act (15 U.S.C. 

23 636(a)(2)) is amended by adding at the end the following: 

24 ‘‘(E) NATIONAL PREFERRED LENDERS

25 PROGRAM.— 


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

2 shall establish a National Preferred Lend3 ers Program by regulation. 

4 ‘‘(ii) EXISTING PREFERRED LEND5 ERS.—Any preferred lender authorized by 

6 the Administrator to operate as a preferred 

7 lender on a national basis prior to the date 

8 of enactment of the Small Business Reau9 thorization and Improvements Act of 2006, 

10 shall continue that status to the extent 

11 that the lender continues to meet the 

12 qualifications for preferred lender status 

13 under this section.’’. 

14 SEC. 202. MAXIMUM LOAN AMOUNT. 

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

16 U.S.C. 636(a)(3)(A)) is amended by striking ‘‘$1,500,000 

17 (or if the gross loan amount would exceed $2,000,000’’ 

18 and inserting ‘‘$2,250,000 (or if the gross loan amount 

19 would exceed $3,000,000’’. 

20 SEC. 203. ALTERNATIVE SIZE STANDARD. 

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

22 632(a)(3)) is amended— 

23 (1) by striking ‘‘When establishing’’ and insert24 ing the following: ‘‘ESTABLISHMENT OF SIZE STAND25 ARDS.— 


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1 ‘‘(A) IN GENERAL.—When establishing’’; and 

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

3 ‘‘(B) ALTERNATIVE SIZE STANDARD.— 

4 ‘‘(i) IN GENERAL.—Not later than 180 

5 days after the date of enactment of this sub6 paragraph, the Administrator shall establish an 

7 alternative size standard under paragraph (2), 

8 that shall be applicable to loan applicants under 

9 section 7(a) of this Act or under title V of the 

10 Small Business Investment Act of 1958 (15 

11 U.S.C. 695 et seq.). 

12 ‘‘(ii) CRITERIA.—The alternative size 

13 standard established under clause (i) shall uti14 lize the maximum net worth and maximum net 

15 income of the prospective borrower as an alter16 native to the use of industry standards. 

17 ‘‘(iii) INTERIM RULE.—Until the Adminis18 trator establishes an alternative size standard 

19 under clause (i), the Administrator shall use the 

20 alternative size standard in section 121.301(b) 

21 of title 13, Code of Federal Regulations, for 

22 loan applicants under section 7(a) of this Act or 

23 under title V of the Small Business Investment 

24 Act of 1958 (15 U.S.C. 695 et seq.).’’. 


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1 SEC. 204. MINORITY SMALL BUSINESS DEVELOPMENT. 

2 (a) IN GENERAL.—The Small Business Act (15 

3 U.S.C. 631 et seq.) is amended— 

4 (1) by redesignating section 37 as section 41; 

5 and 

6 (2) by inserting after section 36 the following: 

7 ‘‘SEC. 37. MINORITY SMALL BUSINESS DEVELOPMENT. 

8 ‘‘(a) OFFICE OF MINORITY SMALL BUSINESS DE9 VELOPMENT.—There is established in the Administration 

10 an Office of Minority Small Business Development, which 

11 shall be administered by the Associate Administrator for 

12 Minority Small Business Development (in this section re13 ferred to as the ‘Associate Administrator’) appointed 

14 under section 4(b)(1). 

15 ‘‘(b) ASSOCIATE ADMINISTRATOR FOR MINORITY

16 SMALL BUSINESS DEVELOPMENT.—The Associate Ad17 ministrator— 

18 ‘‘(1) shall be either— 

19 ‘‘(A) an appointee in the Senior Executive 

20 Service who is a career appointee; or 

21 ‘‘(B) an employee in the competitive serv22 ice; 

23 ‘‘(2) shall be responsible for the formulation, 

24 execution, and promotion of policies and programs of 

25 the Administration that provide assistance to small 


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1 business concerns owned and controlled by minori2 ties; 

3 ‘‘(3) shall act as an ombudsman for full consid4 eration of minorities in all programs of the Adminis5 tration (including those under section 7(j) and 8(a)); 

6 ‘‘(4) shall work with the Associate Deputy Ad7 ministrator for Capital Access to increase the pro8 portion of loans and loan dollars, and investments 

9 and investment dollars, going to minorities through 

10 the finance programs under this Act and the Small 

11 Business Investment Act of 1958 (including sub12 sections (a), (b), and (m) of section 7 of this Act 

13 and the programs under part A and B of title III 

14 and title V of the Small Business Investment Act of 

15 1958); 

16 ‘‘(5) shall work with the Associate Deputy Ad17 ministrator for Entrepreneurial Development to in18 crease the proportion of counseling and training that 

19 goes to minorities through the entrepreneurial devel20 opment programs of the Administration; 

21 ‘‘(6) shall work with the Associate Deputy Ad22 ministrator for Government Contracting and Minor23 ity Enterprise Development to increase the propor24 tion of contracts, including through the Small Busi25 ness Innovation Research Program and the Small 


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1 Business Technology Transfer Program, to minori2 ties; 

3 ‘‘(7) shall work with the partners of the Admin4 istration, trade associations, and business groups to 

5 identify and carry out policies and procedures to 

6 more effectively market the resources of the Admin7 istration to minorities; 

8 ‘‘(8) shall work with the Office of Field Oper9 ations to ensure that district offices and regional of10 fices have adequate staff, funding, and other re11 sources to market the programs of the Administra12 tion to meet the objectives described in paragraphs 

13 (4) through (7); and 

14 ‘‘(9) shall report to and be responsible directly 

15 to the Administrator. 

16 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated to carry out this sec18 tion— 

19 ‘‘(1) $5,000,000 for fiscal year 2007; 

20 ‘‘(2) $5,000,000 for fiscal year 2008; and 

21 ‘‘(3) $5,000,000 for fiscal year 2009.’’. 

22 (b) CONFORMING AMENDMENTS.—Section 4(b)(1) of 

23 the Small Business Act (15 U.S.C. 633(b)(1)) is amended 

24 in sixth sentence, by striking ‘‘Minority Small Business 

25 and Capital Ownership Development’’ and all that follows 


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1 through the end of the sentence and inserting ‘‘Minority 

2 Small Business Development.’’. 

3 SEC. 205. LOWERING OF FEES. 

4 Section 7(a)(23) of the Small Business Act (15 

5 U.S.C. 636(a)(23)) is amended by striking subparagraph 

6 (C) and inserting the following: 

7 ‘‘(C) LOWERING OF FEES.— 

8 ‘‘(i) IN GENERAL.—For loan guaran9 tees made or approved in each full fiscal 

10 year after the date of enactment of the 

11 Small Business Reauthorization and Im12 provements Act of 2006, if the fees paid by 

13 all small business borrowers and by lenders 

14 for guarantees under this subsection, or 

15 the sum of such fees plus any funds made 

16 available for the purpose of reducing fees 

17 for loans under this subsection, as applica18 ble, is more than the amount necessary to 

19 equal the cost to the Administration of 

20 making such guarantees, the Administrator 

21 shall reduce fees paid by small business 

22 borrowers and lenders under clauses (i) 

23 through (iv) of paragraph (18)(A) and 

24 subparagraph (A) of this paragraph. 


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1 ‘‘(ii) MAXIMUM.—The fees paid by 

2 small business borrowers and lenders for 

3 guarantees under this subsection may not 

4 be increased above the maximum level au5 thorized under the amendments made by 

6 division K of the Consolidated Appropria7 tions Act, 2005 (Public Law 108–447; 118 

8 Stat. 3441).’’. 

9 TITLE III—SMALL BUSINESS 

10 INVESTMENT ACT OF 1958 

11 Subtitle A—Debentures and 

12 Securities 

13 SEC. 301. PARTICIPATING DEBENTURE COMPANIES. 

14 Part A of title III of the Small Business Investment 

15 Act of 1958 (15 U.S.C. 681 et seq.) is amended by adding 

16 at the end the following: 

17 ‘‘SEC. 321. PARTICIPATING DEBENTURE COMPANIES. 

18 ‘‘(a) DEFINITIONS.—In this section: 

19 ‘‘(1) EQUITY CAPITAL.—In this paragraph, the 

20 term ‘equity capital’ means common or preferred 

21 stock or a similar instrument, including subordi22 nated debt with equity features which is not amor23 tized and which provides for interest payments from 

24 appropriate sources, as determined by the Adminis25 trator. 


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1 ‘‘(2) GENERAL PARTNER.—The term ‘general 

2 partner’ means an investor in a small business in3 vestment company that participates in the daily 

4 management of the small business investment com5 pany, and may include a managing partner in a lim6 ited liability company. 

7 ‘‘(3) GROSS RECEIPTS.—The term ‘gross re8 ceipts’ means any cash received by a small business 

9 investment company, including investment proceeds 

10 (both return of capital and profit), interest, divi11 dends, and fees, other than capital contributed by a 

12 partner, the proceeds of the issuance of participating 

13 debentures, and other money (if any) borrowed by 

14 the small business investment company. 

15 ‘‘(4) INTERIM FUNDING PROVIDER.—The term 

16 ‘interim funding provider’ means any entity that 

17 provides funding guaranteed by the Administrator to 

18 a licensed company in between the periodic pools 

19 created by any trustee. 

20 ‘‘(5) LICENSED COMPANY.—The term ‘licensed 

21 company’ means a small business investment com22 pany authorized to issue participating debentures by 

23 a license issued under section 301 for that purpose. 

24 ‘‘(6) LIMITED PARTNER.—The term ‘limited 

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1 vestment company, other than the Administrator, 

2 that does not participate in the daily management of 

3 the small business investment company. 

4 ‘‘(7) PARTICIPATING DEBENTURE.—The term 

5 ‘participating debenture’ means a debt security that 

6 is— 

7 ‘‘(A) in a form prescribed by the Adminis8 trator that obligates the issuing company to 

9 pay— 

10 ‘‘(i) on the seventh anniversary of the 

11 date of issuance of the debenture, all ac12 crued interest on that debenture that has 

13 not previously been paid; 

14 ‘‘(ii) semiannually thereafter, interest 

15 accruing after the seventh anniversary of 

16 the date of issuance of the debenture; and 

17 ‘‘(iii) any other amount required by 

18 this section; and 

19 ‘‘(B) is subject to the terms and conditions 

20 set forth in this section and to any additional 

21 terms and conditions as may be prescribed by 

22 the Administrator that are consistent with this 

23 subsection. 

24 ‘‘(8) PRIVATE COLLATERAL.—The term ‘private 

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1 ner has contractually committed to invest in a li2 censed company during the most recent licensing of 

3 the licensed company, but that has not yet been paid 

4 to the licensed company. 

5 ‘‘(9) TRUSTEE.—The term ‘trustee’ means an 

6 entity that combines any securities, interests, or ob7 ligations from licensed companies in the partici8 pating debenture program under subsection (b) into 

9 pools and issues trust certificates. 

10 ‘‘(10) TRUST CERTIFICATE.—The term ‘trust 

11 certificate’ means a certificate issued by the trustee 

12 that represents an interest in a particular pool of 

13 any securities, interests, or obligations from licensed 

14 companies in the participating debenture program. 

15 ‘‘(11) TRUST CERTIFICATE HOLDER.—The 

16 term ‘trust certificate holder’ means an investor that 

17 purchases a trust certificate. 

18 ‘‘(b) PARTICIPATING DEBENTURES PROGRAM.— 

19 ‘‘(1) GUARANTEE OF PARTICIPATING DEBEN20 TURES.— 

21 ‘‘(A) REDEMPTION PRICE AND INTER22 EST.—The Administrator may guarantee the 

23 payment of the redemption price and interest 

24 on a participating debenture issued by a li25 censed company to the interim funding provider 


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1 under such terms and conditions as the Admin2 istrator shall establish, by regulation. 

3 ‘‘(B) REPAYMENT IN DEFAULT.—The Ad4 ministrator may guarantee the repayment to 

5 the interim funding provider in the event of a 

6 default by a licensed company of the funds ad7 vanced by the interim funding provider to the 

8 licensed company under the agreement between 

9 the Administrator and the licensed company, 

10 under such terms and conditions as the Admin11 istrator shall establish, by regulation. 

12 ‘‘(C) TRUST CERTIFICATES.—The Admin13 istrator may guarantee the payment of the re14 demption price and interest on a trust certifi15 cate issued by the trustee to the trust certifi16 cate holders under such terms and conditions as 

17 the Administrator shall establish, by regulation. 

18 ‘‘(2) GUARANTEE FEE.—The Administrator 

19 may charge a separate fee— 

20 ‘‘(A) under paragraph (1)(A), to the in21 terim funding provider; 

22 ‘‘(B) under paragraph (1)(B), to the li23 censed company; and 

24 ‘‘(C) under paragraph (1)(C), to the trust25 ee. 


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1 ‘‘(3) ZERO-SUBSIDY.—Each of the fees author2 ized under paragraph (2) shall, when added to other 

3 fees, be sufficient to reduce to zero the cost (as de4 fined in section 502 of the Federal Credit Reform 

5 Act of 1990 (2 U.S.C. 661a)) of each corresponding 

6 guarantee in paragraph (1). 

7 ‘‘(4) MATCHING PAYMENT STREAMS.—With re8 spect to any participating debenture issued by a li9 censed company, or with respect to any security 

10 issued representing an interest in a pool of such se11 curities, the amount and schedule of— 

12 ‘‘(A) the interest payment obligations of 

13 the Administrator to the trust certificate hold14 ers shall be equal to the amount and schedule 

15 of the interest obligations of the licensed com16 pany to the trust certificate holders; and 

17 ‘‘(B) the principal redemption obligations 

18 of the Administrator to the trust certificate 

19 holders shall be equal to the amount and sched20 ule of the licensed company’s principal redemp21 tion obligations to the trust certificate holders. 

22 ‘‘(5) INTEREST TO INTERIM FUNDING PRO23 VIDER.— 

24 ‘‘(A) RIGHT TO RECEIVE INTEREST.—For 

25 the advancing of monies to a licensed company 


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1 under the license of that company, the interim 

2 funding provider shall have the right to receive 

3 interest from the licensed company. 

4 ‘‘(B) AMOUNTS.—The interest authorized 

5 under subparagraph (A) shall be calculated 

6 based on the time period beginning on the date 

7 on which the interim funding provider advances 

8 the funding, and ending on the date on which 

9 the interim funding provider provides the secu10 rities of the licensed company to a trustee for 

11 the purpose of pooling those securities and sell12 ing interests in that pool. 

13 ‘‘(C) COLLECTION OF INTEREST.—The in14 terim funding provider may collect interest re15 ferred to in this paragraph by withholding 

16 money from the money advanced to the licensed 

17 company by the interim funding provider. 

18 ‘‘(6) MAXIMUM LEVERAGE.—Notwithstanding 

19 any other provision of this subsection, the Adminis20 trator may not guarantee a new participating deben21 ture to be issued by a small business investment 

22 company, and the company shall not make any dis23 tribution to its private investors, if immediately after 

24 such issuance or distribution the aggregate unpaid 

25 principal balance of the participating debentures 


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1 issued by the company would exceed 100 percent of 

2 the leverageable capital of the licensed company. 

3 ‘‘(7) PURCHASE OF PARTICIPATING DEBEN4 TURES.—The Administrator may authorize a trust 

5 or pool acting on behalf of the Administrator to pur6 chase participating debentures issued by a small 

7 business investment company, under such terms and 

8 conditions as the Administrator shall establish, by 

9 regulation. 

10 ‘‘(8) REDEMPTION.—Not later than 10 years 

11 after the date on which it is issued, a participating 

12 debenture shall be redeemed for an amount equal to 

13 its outstanding principal balance plus any accrued 

14 but unpaid interest on such participating debenture 

15 as of the date on which it is redeemed. 

16 ‘‘(9) INTEREST.— 

17 ‘‘(A) IN GENERAL.—For purposes of this 

18 subparagraph, interest on a participating de19 benture— 

20 ‘‘(i) is preferred and cumulative; 

21 ‘‘(ii) is prepayable out of any gross re22 ceipts available for distribution; and 

23 ‘‘(iii) in any event, is payable at the 

24 scheduled or accelerated maturity of the 

25 participating debenture. 


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1 ‘‘(B) INTEREST ON PRINCIPAL BAL2 ANCE.—Interest on the principal balance out3 standing of a participating debenture shall ac4 crue on a daily basis, and unpaid accrued inter5 est shall compound semiannually from the date 

6 of issuance of the debenture, at a rate deter7 mined by the Secretary of the Treasury, taking 

8 into consideration the current average market 

9 yield on outstanding marketable obligations of 

10 the United States with remaining periods to 

11 maturity comparable to the average maturities 

on such securities, adjusted to the nearest 1 12 ⁄8 of 

13 1 percent, plus an additional charge, in an 

14 amount established annually by the Adminis15 trator, as necessary, when added to other fees, 

16 to reduce to zero the cost (as defined in section 

17 502 of the Federal Credit Reform Act of 1990 

18 (2 U.S.C. 661a)) to the Administration of pur19 chasing and guaranteeing participating deben20 tures under this subsection, which may not ex21 ceed 1.5 percent per annum, and which shall be 

22 paid to and retained by the Administration. 

23 ‘‘(10) PAYMENT DEFAULTS.— 

24 ‘‘(A) IN GENERAL.—In the event of a fail25 ure of a small business investment company to 


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1 pay any principal or interest on a participating 

2 debenture when due (including any mandatory 

3 prepayment out of gross receipts), the licensed 

4 company shall be in default, and shall be sub5 ject to the provisions of subparagraphs (B) 

6 through (D). 

7 ‘‘(B) ACCELERATION.—The Administrator, 

8 in addition to any other remedies, may demand 

9 immediate payment of the principal balance and 

10 accrued interest on any or all participating de11 bentures issued by the defaulting company. 

12 ‘‘(C) DEFAULT RATE OF INTEREST.—The 

13 interest rate on the participating debenture 

14 with respect to which the payment default oc15 curred may increase, at the discretion of the 

16 Administrator, by not greater than 50 basis 

17 points from the date of the payment default, 

18 and by not greater than an additional 50 basis 

19 points on each 6-month anniversary of that 

20 date, up to a maximum total increase of 300 

21 basis points, until all of the payment defaults of 

22 the defaulting company have been cured or 

23 waived. 

24 ‘‘(D) PRIVATE COLLATERAL.—The Admin25 istrator may apply the private collateral of the 


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1 licensed company to pay any interest or prin2 cipal payment that has not been paid on time 

3 according to the payment schedule for the li4 censed company. 

5 ‘‘(11) LIQUIDATION OF LICENSED COMPANY.— 

6 In the event of the liquidation of a licensed company 

7 issuing participating debentures under this sub8 section, a participating debenture shall be senior in 

9 priority for all purposes to any interest in the 

10 issuing company, whenever created. In liquidation, 

11 the private collateral of the licensed company may, 

12 at the option of the Administrator, be applied to pay 

13 accrued interest and principal of outstanding partici14 pating debentures. 

15 ‘‘(12) DEFAULT OF A LICENSED COMPANY.—In 

16 the event of the default of a licensed company 

17 issuing participating debentures under this sub18 section— 

19 ‘‘(A) a participating debenture shall be 

20 senior in priority for all purposes to any inter21 est in the issuing company, whenever created; 

22 and 

23 ‘‘(B) at the option of the Administrator, 

24 the private collateral of the licensed company 

25 may be applied to pay accrued interest and 


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1 principal on outstanding participating deben2 tures. 

3 ‘‘(13) INVESTMENT OBLIGATION.—Any com4 pany issuing a participating debenture under this 

5 subsection shall invest or commit to invest an 

6 amount equal to the outstanding face value of such 

7 participating debenture solely in equity capital. 

8 ‘‘(14) OTHER DEBT.—A licensed company 

9 issuing a participating debenture under this sub10 section shall have no debt other than leverage ob11 tained in accordance with this Act, and temporary 

12 debt in an amount equal to not more than 50 per13 cent of the private capital of the company. 

14 ‘‘(15) USE OF PROCEEDS.—Unless otherwise 

15 determined by the Administrator, a licensed com16 pany may use the proceeds of a participating deben17 ture issued by the company to pay the principal 

18 amount and accrued interest due on outstanding 

19 participating debentures issued by that company, if 

20 the company has outstanding equity capital invested 

21 in an amount equal to the amount being refinanced. 

22 ‘‘(16) DISTRIBUTION OF GROSS RECEIPTS.— 

23 ‘‘(A) IN GENERAL.—Except as otherwise 

24 provided in this subsection, gross receipts, from 

25 any source or however categorized for generally 


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1 accepted accounting principles or tax account2 ing purposes, shall be utilized first for the pay3 ment of accrued interest on participating deben4 tures, then for repayment of participating de5 benture principal and contributed private cap6 ital, and finally for profit distributions, as pro7 vided in subparagraphs (B) through (G). 

8 ‘‘(B) PAST DUE INTEREST AND PRIN9 CIPAL.—Gross receipts shall first be used, with10 in 10 days of receipt— 

11 ‘‘(i) to pay any past due interest on 

12 participating debentures issued by the li13 censed company; and 

14 ‘‘(ii) when there is no past due inter15 est outstanding, to repay any past due 

16 principal on such debentures (whether such 

17 interest and principal are past due by their 

18 terms or by acceleration). 

19 ‘‘(C) MANDATORY INTEREST PREPAY20 MENT.—If no unpaid accrued interest or past 

21 due principal is outstanding on any partici22 pating debenture issued by a licensed company, 

23 the company shall use its gross receipts, not 

24 later than the end of the calendar quarter in 

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1 endar quarter, if received within 15 days before 

2 the end of a calendar quarter) to prepay ac3 crued interest on the participating debentures 

4 issued by the company, which prepayments will 

5 be applied to such accrued interest in the order 

6 in which such interest would otherwise become 

7 due and payable. 

8 ‘‘(D) AMORTIZATION DISTRIBUTIONS.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in paragraph (17), if no unpaid ac11 crued interest or past due principal is out12 standing on any participating debenture 

13 issued by a licensed company, the company 

14 shall distribute its gross receipts— 

15 ‘‘(I) to the Administration to am16 ortize outstanding participating de17 benture leverage; and 

18 ‘‘(II) to its private investors. 

19 ‘‘(ii) PRO RATA DISTRIBUTION.—A 

20 distribution under clause (i) shall be pro 

21 rata according to the ratio of outstanding 

22 participating debenture leverage to out23 standing leverageable capital at the time of 

24 distribution. 


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1 ‘‘(E) POST-AMORTIZATION DISTRIBU2 TIONS.—If no accrued interest or principal is 

3 outstanding on any participating debenture 

4 issued by a licensed company, and the company 

5 has no outstanding leverageable capital, the 

6 gross receipts of the company— 

7 ‘‘(i) shall be distributed to the Admin8 istration in an amount equal to the profit 

9 participation percentage of the total 

10 amount being distributed, with the remain11 ing gross receipts distributed to the private 

12 investors; and 

13 ‘‘(ii) in the case of any post-amortiza14 tion distributions to the Administration 

15 under this subparagraph, shall be deemed 

16 to constitute ‘additional’ interest (not ‘ac17 crued’ interest). 

18 ‘‘(F) MANAGEMENT EXPENSES.—For pur19 poses of calculating the amount to be distrib20 uted to the Administration under subparagraph 

21 (E), except as otherwise prescribed by the Ad22 ministration, the management expenses of any 

23 company which issues participating debentures 

24 under this subsection shall not be greater than 

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1 pany per year, plus, in the case of a company 

2 with combined capital of less than $20,000,000, 

3 an additional $125,000. 

4 ‘‘(G) DEFINITIONS.—In this paragraph— 

5 ‘‘(i) the term ‘combined capital’ 

6 means the aggregate amount of private 

7 capital and outstanding leverage; 

8 ‘‘(ii) the term ‘profit participation 

9 percentage’ means 50 percent of the lever10 age ratio, reduced by the weighted average 

11 interest rate on the financing commitments 

12 issued by the company; 

13 ‘‘(iii) the term ‘leverage ratio’ means 

14 the ratio of the aggregate amount of fi15 nancing commitment leverage previously 

16 drawn by the company (including leverage 

17 that has been repaid, and not solely the 

18 maximum amount at any one time out19 standing, if different) to the aggregate 

20 amount of capital previously contributed to 

21 the company by private investors (not sole22 ly the maximum amount at any one time 

23 outstanding, if different); 

24 ‘‘(iv) the term ‘management expenses’ 

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1 tional salaries, office expenses, travel, busi2 ness development costs, office and equip3 ment rental, bookkeeping, and the develop4 ment, investigation, and monitoring of in5 vestments paid by the licensed company, 

6 but does not include the cost of services 

7 provided by specialized outside consultants, 

8 outside lawyers, and outside auditors, who 

9 perform services not generally expected of 

10 a venture capital company nor does such 

11 term include the cost of services provided 

12 by any affiliate of the company which are 

13 not part of the normal process of making 

14 and monitoring venture capital invest15 ments; and 

16 ‘‘(v) the term ‘outstanding 

17 leverageable capital’ means any aggregate 

18 capital contributions received by a licensed 

19 company from private investors which ex20 ceed aggregate distributions received by 

21 the private investors from the company. 

22 ‘‘(17) EXCEPTIONS TO ORDER OF DISTRIBU23 TIONS.— 

24 ‘‘(A) IN GENERAL.—Notwithstanding para25 graph (16)(D), if no unpaid accrued interest 


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1 (whether or not past due) and no past due prin2 cipal is outstanding on any participating deben3 ture issued by the licensed company, subpara4 graph (B) through (D) of this paragraph shall 

5 apply. 

6 ‘‘(B) TAX DISTRIBUTIONS.— 

7 ‘‘(i) IN GENERAL.—The company may 

8 make a special distribution of gross re9 ceipts or other cash to its private investors 

10 without a corresponding distribution to the 

11 Administration while principal is out12 standing on participating debentures 

13 issued by the company, if— 

14 ‘‘(I) the licensed company has an 

15 investment in a business (referred to 

16 in this subparagraph as the ‘portfolio 

17 company’) organized as a limited li18 ability company (referred to in this 

19 subparagraph as an ‘LLC’) or as a 

20 partnership; 

21 ‘‘(II) the portfolio company has 

22 income which will be taxable to its 

23 members or partners; 

24 ‘‘(III) the portfolio company 

25 makes a distribution to its members 


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1 or partners in an amount equal to 

2 their assumed tax liability on the 

3 portfolio company’s taxable income 

4 (referred to in this subparagraph as a 

5 ‘tax distribution’); or 

6 ‘‘(IV) the small business invest7 ment company is itself a partnership 

8 or an LLC, so that any portfolio com9 pany income allocated to it is reallo10 cated to the private investors, and it 

11 is those private investors who are lia12 ble for payment of tax on that income 

13 as if it was their own income, whether 

14 or not they receive any cash in respect 

15 of that income. 

16 ‘‘(ii) AUTHORITY TO MAKE DISTRIBU17 TION.—In circumstances described in 

18 clause (i), the issuing company may, quar19 terly, distribute to its private investors up 

20 to an amount equal to the difference be21 tween— 

22 ‘‘(I) the estimated aggregate 

23 maximum tax liability of the private 

24 investors on the income of portfolio 

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1 nerships during the preceding cal2 endar year; and 

3 ‘‘(II) the aggregate amount dis4 tributed to the private investors (other 

5 than under this subparagraph) since 

6 April 15 of the preceding calendar 

7 year, but in no event more than the 

8 aggregate amount of tax distributions 

9 that the issuing company received 

10 from all of its portfolio companies 

11 during the preceding calendar year. 

12 ‘‘(C) EXPENSES.—A small business invest13 ment company may use its gross receipts to pay 

14 previously incurred expenses (including manage15 ment fees) and other liabilities and it may, in 

16 addition, retain additional gross receipts in an 

17 expense reserve account in an amount which, 

18 added to any existing expense reserve, does not 

19 exceed such reasonably anticipated expenses 

20 and other liabilities for the following 12-month 

21 period, provided such expenses and other liabil22 ities are not prohibited under regulations estab23 lished by the Administrator or other applicable 

24 law. 


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1 ‘‘(D) PREPAYMENT.—Subject to any appli2 cable State law requirements, a small business 

3 investment company may use gross receipts or 

4 other cash to prepay outstanding participating 

5 debenture leverage and interest in whole or in 

6 part without penalty at any time. 

7 ‘‘(18) RESTRICTIONS ON DISTRIBUTIONS.— 

8 ‘‘(A) LIQUIDITY AND OTHER ADMINISTRA9 TIVE OR STATE LAW RESTRICTIONS.—A dis10 tribution under this subsection may not violate 

11 liquidity requirements or other applicable re12 strictions on distributions in regulations issued 

13 by the Administrator or under applicable State 

14 law. 

15 ‘‘(B) CAPITAL IMPAIRMENT OR REGU16 LATORY VIOLATION.—If a small business invest17 ment company is in restricted operations or liq18 uidation by reason of capital impairment or reg19 ulatory violation, the maturity date of the par20 ticipating debentures issued by that company, 

21 including both principal and accrued interest, is 

22 subject to acceleration at the option of the Ad23 ministrator, and, regardless of whether there 

24 has been such an acceleration, not more than 

25 100 percent of all gross receipts and the private 


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1 collateral of the licensed company may, at the 

2 option of the Administrator, be required to be 

3 distributed to the Administration until accrued 

4 interest and principal on the participating de5 bentures issued by the company have been paid 

6 in full, in accordance with any terms and condi7 tions that the Administrator may establish by 

8 regulation. 

9 ‘‘(19) DISTRIBUTIONS IN-KIND.— 

10 ‘‘(A) ELECTION OF IN-KIND DISTRIBUTION

11 OF SECURITIES.— 

12 ‘‘(i) IN GENERAL.—A small business 

13 investment company that issues partici14 pating debentures, has no accrual but un15 paid interest, and has no outstanding le16 verage, may elect to make an in-kind dis17 tribution of securities at any time, subject 

18 to applicable securities laws and regula19 tions, if such securities are publicly traded 

20 and marketable (referred to in this sub21 section as ‘marketable securities’). 

22 ‘‘(ii) GROSS RECEIPTS.—Marketable 

23 securities distributed in-kind shall be 

24 deemed to be gross receipts for purposes of 

25 this subsection, and their distribution shall 


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1 be subject to the priorities and restrictions 

2 applicable to gross receipts under this sub3 section and to applicable regulations issued 

4 by the Administrator. 

5 ‘‘(B) TREATMENT OF ADMINISTRATION

6 SHARE.—The licensed company shall either de7 posit the Administration share of such securi8 ties with a trustee designated by the Adminis9 trator, or retain the Administration share, if 

10 the Administrator so directs and with the 

11 agreement of the company. 

12 ‘‘(C) RETENTION OF ADMINISTRATION

13 SHARE.—If the company retains the Adminis14 tration share, it shall sell such share and 

15 promptly remit the proceeds to the Administra16 tion. 

17 ‘‘(D) VALUE OF ADMINISTRATION’S

18 SHARE.—For purposes of this paragraph— 

19 ‘‘(i) the value of the Administration 

20 share is the value of the securities, as of 

21 the date of distribution to the Administra22 tion under subparagraph (B), or as of the 

23 initial date of retention under subpara24 graph (C); and 


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1 ‘‘(ii) the Administration may receive a 

2 greater or lesser amount upon its ultimate 

3 sale of such share or upon the ultimate 

4 sale by the company of such share on be5 half of the Administration. 

6 ‘‘(20) TIMING OF DISTRIBUTIONS.— 

7 ‘‘(A) IN GENERAL.—Except as provided in 

8 subparagraph (B), and subject to paragraphs 

9 (15) and (17), any gross receipts received by a 

10 small business investment company issuing par11 ticipating debentures under this subsection that 

12 are not placed in an expense reserve under 

13 paragraph (17)(C) shall be distributed not later 

14 than the last day of the fiscal quarter in which 

15 such gross receipts were received by the com16 pany. 

17 ‘‘(B) EXCEPTIONS TO TIMING OF DIS18 TRIBUTIONS.— 

19 ‘‘(i) END OF QUARTER.—Gross re20 ceipts received within 15 days before the 

21 end of a fiscal quarter shall be distributed 

22 by the last day of the subsequent fiscal 

23 quarter. 

24 ‘‘(ii) MARKETABLE SECURITIES.— 

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1 curities shall be distributed within 6 

2 months of the date of receipt, unless the 

3 small business investment company has ob4 tained the prior consent of the Adminis5 trator. 

6 ‘‘(21) REINVESTMENT OF GROSS RECEIPTS.— 

7 Subject to such regulations and restrictions as may 

8 be prescribed by the Administrator, and by the 

9 agreement of the private investors in a small busi10 ness investment company, any gross receipts that ex11 ceed the amount needed to make payments required 

12 to be made to the Administration under this sub13 section, may at the option of the company be rein14 vested in qualified small business concerns. 

15 ‘‘(c) MAXIMUM.—Participating debentures guaran16 teed under this section may not exceed 100 percent of the 

17 regulatory capital of the licensed company, as determined 

18 by the Administrator. 

19 ‘‘(d) POST-DISTRIBUTION COMPUTATION.—After 

20 distributions have been made under this section, the Ad21 ministration share of such distributions shall not be re22 duced or recomputed. 

23 ‘‘(e) NO OWNERSHIP INTEREST TO ADMINISTRA24 TION.—This section shall not be construed as creating in 

25 the Administration any ownership interest in any small 


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1 business investment company which issues participating 

2 debentures. 

3 ‘‘(f) CONFLICT WITH OTHER PROVISIONS.— 

4 ‘‘(1) IN GENERAL.—In the event of a conflict 

5 between this subsection and any other provision of 

6 this part, this subsection shall apply. 

7 ‘‘(2) SPECIFIC PROVISIONS.—The provisions of 

8 this section supersede subsections (g) and (h) of sec9 tion 303 in their entirety with respect to all matters 

10 pertaining to participating debentures issued by a li11 censed company covered by this section.’’. 

12 SEC. 302. PARTICIPATING SECURITIES. 

13 Section 20(a) of the Small Business Act (15 U.S.C. 

14 631 note) is amended— 

15 (1) in paragraph (2), by striking ‘‘Subject to 

16 approval in appropriations Acts,’’ and inserting ‘‘Ex17 cept as provided in paragraph (5), and subject to 

18 approval in appropriations Acts,’’; and 

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

20 ‘‘(5) PARTICIPATING SECURITIES.— 

21 ‘‘(A) DEFINITIONS.—In this paragraph— 

22 ‘‘(i) the term ‘applicable 60-day period’ 

23 means the 60-day period ending on the date on 

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1 trator for a covered participating security ex2 pires; 

3 ‘‘(ii) the term ‘covered participating secu4 rity’ means a participating security under title 

5 III of the Small Business Investment Act of 

6 1958— 

7 ‘‘(I) that was obligated in fiscal year 

8 2002, 2003, or 2004, under a commitment 

9 made by the Administrator; and 

10 ‘‘(II) on the date that is 60 days prior 

11 to the date on which such commitment ex12 pires, for which the Administrator has not 

13 disbursed all of the funds committed; and 

14 ‘‘(iii) the term ‘small business investment 

15 company’ has the same meaning as in section 

16 103 of the Small Business Investment Act of 

17 1958. 

18 ‘‘(B) DISBURSAL OF FUNDS.—Notwithstanding 

19 any other provision of law, and subject to subpara20 graph (C), during the applicable 60-day period, the 

21 Administrator shall, upon request, disburse funds to 

22 a small business investment company for a covered 

23 participating security, up to the full amount com24 mitted by the Administrator, but not disbursed to 

25 the company. 


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1 ‘‘(C) CONDITIONS.—A small business invest2 ment company receiving funds under subparagraph 

3 (B) shall— 

4 ‘‘(i) be in compliance with all regulations 

5 under title III of the Small Business Invest6 ment Act of 1958, relating to small business in7 vestment companies; 

8 ‘‘(ii) pay a fee to the Administrator (in ad9 dition to any other applicable fee) in an amount 

10 equal to 0.5 percent of any funds disbursed 

11 under subparagraph (B); and 

12 ‘‘(iii) deposit any funds disbursed under 

13 subparagraph (B) that are not reasonably re14 quired for imminent investment purposes, as 

15 determined by the Administrator, in an interest 

16 bearing account approved by the Administrator. 

17 ‘‘(D) WITHDRAWAL OF FUNDS.— 

18 ‘‘(i) IN GENERAL.—Funds deposited under 

19 subparagraph (C)(iii) may not be withdrawn 

20 without the prior approval of the Administrator. 

21 ‘‘(ii) CRITERIA.—The Administrator shall 

22 grant approval for a withdrawal under clause 

23 (i) in accordance with the same criteria applica24 ble to the disbursal of funds for a participating 


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1 security under title III of the Small Business 

2 Investment Act of 1958.’’. 

3 Subtitle B—Development 

4 Companies 

5 SEC. 321. DEVELOPMENT COMPANY LOAN PROGRAMS. 

6 (a) TITLE OF PROGRAM.—Title V of the Small Busi7 ness Investment Act of 1958 (15 U.S.C. 695 et seq.) is 

8 amended by adding at the end the following: 

9 ‘‘SEC. 511. PROGRAM TITLE. 

10 ‘‘(a) IN GENERAL.—Except as provided in subsection 

11 (b), the programs authorized by this title shall be known 

12 collectively as the ‘Local Development Business Loan Pro13 gram’. The Administrator may refer to such program as 

14 the ‘504 Loan Program’, until such usage is no longer 

15 necessary. 

16 ‘‘(b) EXISTING NAME.—Participants in the Local 

17 Development Business Loan Program may continue to 

18 refer to such program as ‘the 504 loan program’.’’. 

19 (b) EXISTING MATERIALS.—The Administrator may 

20 use informational materials created, or that were in the 

21 process of being created, before the date of enactment of 

22 this Act that do not refer to a program under title V of 

23 the Small Business Investment Act of 1958 (15 U.S.C. 

24 695 et seq.) as the ‘‘Local Development Business Loan 

25 Program’’. 


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1 (c) NEW MATERIALS.—Any informational materials 

2 created by the Administrator on or after the date of enact3 ment of this Act shall refer to any program under title 

4 V of the Small Business Investment Act of 1958 (15 

5 U.S.C. 695 et seq.) as the ‘‘Local Development Business 

6 Loan Program’’, except that informational materials may 

7 refer to such program as the ‘‘504 Loan Program’’, until 

8 such usage is no longer necessary. 

9 SEC. 322. LOAN LIQUIDATIONS. 

10 Section 510 of the Small Business Investment Act 

11 of 1958 (15 U.S.C. 697g) is amended— 

12 (1) by redesignating subsection (e) as sub13 section (g); and 

14 (2) by inserting after subsection (d) the fol15 lowing: 

16 ‘‘(e) PARTICIPATION.— 

17 ‘‘(1) IN GENERAL.—Any qualified State or local 

18 development company which elects not to apply for 

19 authority to foreclose and liquidate defaulted loans 

20 under this section, or which the Administrator deter21 mines to be ineligible for such authority, shall con22 tract with a qualified third-party to perform fore23 closure and liquidation of defaulted loans in its port24 folio. The contract shall be contingent upon approval 

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1 tions of the contractor and the terms and conditions 

2 of liquidation activities. 

3 ‘‘(2) COMMENCEMENT.—This subsection does 

4 not require any development company to liquidate 

5 defaulted loans until the Administrator has adopted 

6 and implemented a program to compensate and re7 imburse development companies, as provided under 

8 subsection (f). 

9 ‘‘(f) COMPENSATION AND REIMBURSEMENT.— 

10 ‘‘(1) REIMBURSEMENT OF EXPENSES.—The 

11 Administrator shall reimburse each qualified State 

12 or local development company for all expenses paid 

13 by such company as part of the foreclosure and liq14 uidation activities, if the expenses— 

15 ‘‘(A) were approved in advance by the Ad16 ministrator, either specifically or generally; or 

17 ‘‘(B) were incurred by the development 

18 company on an emergency basis without prior 

19 approval from the Administrator, if the Admin20 istrator determines that the expenses were rea21 sonable and appropriate. 

22 ‘‘(2) COMPENSATION FOR RESULTS.— 

23 ‘‘(A) DEVELOPMENT.—The Administrator 

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1 velopment companies that foreclose and liq2 uidate defaulted loans. 

3 ‘‘(B) CRITERIA.—The schedule required 

4 under this paragraph shall— 

5 ‘‘(i) be based on a percentage of the 

6 net amount recovered, but shall not exceed 

7 a maximum amount; and 

8 ‘‘(ii) not apply to any foreclosure 

9 which is conducted under a contract be10 tween a development company and a quali11 fied third party to perform the foreclosure 

12 and liquidation.’’. 

13 SEC. 323. ADDITIONAL EQUITY INJECTIONS. 

14 Section 502(3)(B)(ii) of the Small Business Invest15 ment Act of 1958 (15 U.S.C. 696(3)(B)(ii)) is amended 

16 to read as follows: 

17 ‘‘(ii) FUNDING FROM INSTITU18 TIONS.—If a small business concern— 

19 ‘‘(I) provides the minimum con20 tribution required under subpara21 graph (C), not less than 50 percent of 

22 the total cost of any project financed 

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1 stitutions described in subclauses (I), 

2 (II), and (III) of clause (i); and 

3 ‘‘(II) provides more than the 

4 minimum contribution required under 

5 subparagraph (C), any excess con6 tribution may be used to reduce the 

7 amount required from the institutions 

8 described in subclauses (I), (II), and 

9 (III) of clause (i), except that the 

10 amount from such institutions may 

11 not be reduced to an amount that is 

12 less than the amount of the loan made 

13 by the Administrator.’’. 

14 SEC. 324. BUSINESSES IN LOW-INCOME AREAS. 

15 Section 501(d)(3)(A) of the Small Business Invest16 ment Act of 1958 (15 U.S.C. 695(d)(3)(A)) is amended 

17 by inserting after ‘‘business district revitalization,’’ the 

18 following: ‘‘or expansion of businesses in low-income com19 munities which would be eligible for a new markets tax 

20 credit under section 45D(a) of the Internal Revenue Code 

21 of 1986, or implementing regulations issued thereunder,’’. 

22 SEC. 325. COMBINATIONS OF CERTAIN GOALS. 

23 Section 501(e) of the Small Business Investment Act 

24 of 1958 (15 U.S.C. 695(e)) is amended by adding at the 

25 end the following: 


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1 ‘‘(7) A small business concern that is uncondi2 tionally owned by more than 1 individual, or a cor3 poration, the stock of which is owned by more than 

4 1 individual, shall be deemed to have achieved a 

5 public policy goal required under subsection (d)(3) if 

6 a combined ownership share of not less than 51 per7 cent is held by individuals who are in 1 of, or a com8 bination of, the groups described in subparagraph 

9 (C) or (E) of subsection (d)(3).’’. 

10 SEC. 326. MAXIMUM 504 AND 7(a) LOAN ELIGIBILITY. 

11 Section 502(2) of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 696(2)) is amended by adding at the 

13 end the following: 

14 ‘‘(C) COMBINATION FINANCING.—Notwith15 standing any other provision of law, financing 

16 under this title may be provided to a borrower 

17 in the maximum amount provided in this sub18 section, and a loan guarantee under section 

19 7(a) of the Small Business Act may be provided 

20 to the same borrower in the maximum amount 

21 provided in section 7(a)(3)(A) of such Act, to 

22 the extent that the borrower otherwise qualifies 

23 for such assistance.’’. 


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1 SEC. 327. REFINANCING UNDER THE LOCAL DEVELOPMENT 

2 BUSINESS LOAN PROGRAM. 

3 Section 502 of the Small Business Investment Act 

4 of 1958 (15 U.S.C. 696) is amended by adding at the end 

5 the following: 

6 ‘‘(7) PERMISSIBLE DEBT REFINANCING.— 

7 ‘‘(A) IN GENERAL.—Any financing ap8 proved under this title may include a limited 

9 amount of debt refinancing. 

10 ‘‘(B) EXPANSIONS.—If the project involves 

11 expansion of a small business concern which 

12 has existing indebtedness collateralized by fixed 

13 assets, any amount of existing indebtedness 

that does not exceed 1 14 ⁄2 of the project cost of 

15 the expansion may be refinanced and added to 

16 the expansion cost, if— 

17 ‘‘(i) the proceeds of the indebtedness 

18 were used to acquire land, including a 

19 building situated thereon, to construct a 

20 building thereon, or to purchase equip21 ment; 

22 ‘‘(ii) the borrower has been current on 

23 all payments due on the existing debt for 

24 not less than 1 year preceding the date of 

25 refinancing; and 


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1 ‘‘(iii) the financing under section 504 

2 will provide better terms or rate of interest 

3 than exists on the debt at the time of refi4 nancing.’’. 

5 SEC. 328. TECHNICAL CORRECTION. 

6 Section 501(e)(2) of the Small Business Investment 

7 Act of 1958 (15 U.S.C. 695(e)(2)) is amended by striking 

8 ‘‘outstanding’’. 

9 SEC. 329. DEFINITIONS FOR THE SMALL BUSINESS INVEST10 MENT ACT OF 1958. 

11 Section 103 of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 662) is amended— 

13 (1) by striking paragraph (6) and inserting the 

14 following: 

15 ‘‘(6) the term ‘development company’ means an 

16 entity incorporated under State law with the author17 ity to promote and assist the growth and develop18 ment of small business concerns in the areas in 

19 which it is authorized to operate by the Adminis20 trator;’’; 

21 (2) in paragraph (16), by striking ‘‘and’’ at the 

22 end; 

23 (3) in paragraph (17), by striking the period at 

24 the end and inserting ‘‘; and’’; and 

25 (4) by adding at the end the following: 


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1 ‘‘(18) the term ‘certified development company’ 

2 means a development company that the Adminis3 trator has certified meets the criteria of section 

4 506.’’. 

5 SEC. 330. REPEAL OF SUNSET ON RESERVE REQUIRE6 MENTS FOR PREMIER CERTIFIED LENDERS. 

7 Section 508(c)(6)(B) of the Small Business Invest8 ment Act of 1958 (15 U.S.C. 697e(c)(6)(B)) is amend9 ed— 

10 (1) in the subparagraph heading, by striking 

11 ‘‘TEMPORARY REDUCTION’’ and inserting ‘‘REDUC12 TION’’; and 

13 (2) by striking ‘‘Notwithstanding subparagraph 

14 (A), during the 2-year period beginning on the date 

15 that is 90 days after the date of enactment of this 

16 subparagraph, the’’ and inserting ‘‘The’’. 

17 SEC. 331. CERTIFIED DEVELOPMENT COMPANIES. 

18 Section 506 of the Small Business Investment Act 

19 of 1958 (15 U.S.C. 697c) is amended— 

20 (1) in the section heading, by striking ‘‘RE21 STRICTIONS ON DEVELOPMENT COMPANY AS22 SISTANCE’’ and inserting ‘‘CERTIFIED DEVELOP23 MENT COMPANIES’’; and 

24 (2) by inserting before ‘‘Notwithstanding any 

25 other provision of law’’ the following: 


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1 ‘‘(a) AUTHORITY TO ISSUE DEBENTURES.—A devel2 opment company may issue debentures under this title if 

3 the Administrator certifies that the company meets the 

4 following criteria: 

5 ‘‘(1) SIZE.— 

6 ‘‘(A) IN GENERAL.—Except as provided in 

7 subparagraph (B), the development company 

8 shall be a small business concern with fewer 

9 than 500 employees, and shall not be under the 

10 control of any entity that does not meet the size 

11 standards established by the Administrator for 

12 a small business concern. 

13 ‘‘(B) EXCEPTION.—Any development com14 pany that was certified by the Administrator 

15 before December 31, 2005, may continue to 

16 issue debentures under this title. 

17 ‘‘(2) PRIMARY PURPOSE.—A primary purpose 

18 of the development company shall be to benefit the 

19 community by fostering economic development to 

20 create and preserve jobs and stimulate private in21 vestment. 

22 ‘‘(3) PRIMARY FUNCTION.—A primary function 

23 of the development company shall be to accomplish 

24 its purpose by providing long-term financing to 

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1 ment Business Loan Program. The development 

2 company may also provide or support other local 

3 economic development activities to assist the commu4 nity. 

5 ‘‘(4) NONPROFIT STATUS.— 

6 ‘‘(A) IN GENERAL.—Except as provided in 

7 subparagraph (B), the development company 

8 shall be a nonprofit corporation. 

9 ‘‘(B) EXCEPTION.—A development com10 pany certified by the Administrator before Jan11 uary 1, 1987, may continue to issue debentures 

12 under this title and retain its status as a for13 profit enterprise. 

14 ‘‘(5) GOOD STANDING.—The development com15 pany— 

16 ‘‘(A) shall be in good standing in the State 

17 in which such company is incorporated and in 

18 any other State in which it conducts business; 

19 and 

20 ‘‘(B) shall be in compliance with all laws, 

21 including taxation requirements, in the State in 

22 which such company is incorporated and in any 

23 other State in which it conducts business. 

24 ‘‘(6) MEMBERSHIP OF DEVELOPMENT COM25 PANY.—There shall be— 


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1 ‘‘(A) not fewer than 25 members of the de2 velopment company (or owners or stockholders, 

3 if the corporation is a for-profit entity), none of 

4 whom may own or control more than 10 percent 

5 of the voting membership of the company; and 

6 ‘‘(B) at least 1 member of the development 

7 company (none of whom is in a position to con8 trol the development company) from each of the 

9 following: 

10 ‘‘(i) Government organizations that 

11 are responsible for economic development. 

12 ‘‘(ii) Financial institutions that pro13 vide commercial long-term fixed asset fi14 nancing. 

15 ‘‘(iii) Community organizations that 

16 are dedicated to economic development. 

17 ‘‘(iv) Businesses. 

18 ‘‘(7) BOARD OF DIRECTORS.— 

19 ‘‘(A) IN GENERAL.—The development com20 pany shall have a board of directors. 

21 ‘‘(B) MEMBERS OF BOARD.—Each member 

22 of the board of directors shall be— 

23 ‘‘(i) a member of the development 

24 company; and 


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1 ‘‘(ii) elected by a majority of the 

2 members of the development company. 

3 ‘‘(C) REPRESENTATION OF ORGANIZA4 TIONS AND INSTITUTIONS.— 

5 ‘‘(i) IN GENERAL.—There shall be at 

6 least 1 member of the board of directors 

7 from not fewer than 3 of the 4 organiza8 tions and institutions described in para9 graph (6)(B), none of whom is in a posi10 tion to control the development company. 

11 ‘‘(ii) MAXIMUM PERCENTAGE.—Not 

12 more than 50 percent of the members of 

13 the board of directors shall be from any 1 

14 of the organizations and institutions de15 scribed in paragraph (6)(B). 

16 ‘‘(D) MEETINGS.—The board of directors 

17 of the development company shall meet on a 

18 regular basis to make policy decisions for such 

19 company. 

20 ‘‘(8) PROFESSIONAL MANAGEMENT AND

21 STAFF.— 

22 ‘‘(A) IN GENERAL.—The development com23 pany shall have full-time professional manage24 ment, including a chief executive officer to man25 age daily operations and a full-time professional 


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1 staff qualified to market the Local Development 

2 Business Loan Program and handle all aspects 

3 of loan approval and servicing, including liq4 uidation, if appropriate. 

5 ‘‘(B) INDEPENDENT MANAGEMENT AND

6 OPERATION.—Except as provided in paragraph 

7 (9), the development company shall be inde8 pendently managed and operated to pursue the 

9 economic development purpose of the company 

10 and shall employ directly the chief executive of11 ficer. 

12 ‘‘(9) MANAGEMENT AND OPERATION EXCEP13 TIONS.— 

14 ‘‘(A) AFFILIATION.—A development com15 pany may be an affiliate of another local non16 profit service corporation (other than a develop17 ment company), a purpose of which is to sup18 port economic development in the area in which 

19 the development company operates. 

20 ‘‘(B) STAFFING.—A development company 

21 may satisfy the requirement for full-time pro22 fessional staff under paragraph (8)(A) by con23 tracting for the required staffing with— 

24 ‘‘(i) a local nonprofit service corpora25 tion; 


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1 ‘‘(ii) a nonprofit affiliate of a local 

2 nonprofit service corporation; 

3 ‘‘(iii) an entity wholly or partially op4 erated by a governmental agency; or 

5 ‘‘(iv) another entity approved by the 

6 Administrator. 

7 ‘‘(C) DIRECTORS.—A development com8 pany and a local nonprofit service corporation 

9 with which it is affiliated may have in common 

10 some, but not all, members of their respective 

11 board of directors. 

12 ‘‘(D) RURAL AREAS.—A development com13 pany in a rural area may satisfy the require14 ments of a full-time professional staff and pro15 fessional management ability under paragraph 

16 (8)(A) by contracting for such services with an17 other certified development company that— 

18 ‘‘(i) has such staff and management 

19 ability; and 

20 ‘‘(ii) is located in the same State as 

21 the development company or in a State 

22 that is contiguous to the State in which 

23 the development company is located. 

24 ‘‘(E) PREVIOUSLY CERTIFIED.—A develop25 ment company that, on or before December 31, 


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1 2005, was certified by the Administrator and 

2 had contracted with a for-profit company to 

3 provide staffing and management services, may 

4 continue to do so. 

5 ‘‘(b) USE OF EXCESS FUNDS.—Any funds generated 

6 by a certified development company from making loans 

7 under section 503 or 504 that remain unexpended after 

8 payment of staff, operating, and overhead expenses shall 

9 be retained by the certified development company as a re10 serve for— 

11 ‘‘(1) future operations; 

12 ‘‘(2) expanding the area in which the certified 

13 development company operates through the methods 

14 authorized by this Act; or 

15 ‘‘(3) investment in other local economic develop16 ment activity or community development in the 

17 State from which such funds were generated. 

18 ‘‘(c) ETHICAL REQUIREMENTS.— 

19 ‘‘(1) IN GENERAL.—A certified development 

20 company and the officers, employees, and other staff 

21 of the company shall at all times act ethically and 

22 avoid activities which constitute a conflict of interest 

23 or appear to constitute a conflict of interest. 

24 ‘‘(2) PROHIBITED CONFLICT IN PROJECT

25 LOANS.— 


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1 ‘‘(A) IN GENERAL.—No certified develop2 ment company may— 

3 ‘‘(i) recommend or approve a guar4 antee of a debenture by the Administrator 

5 under the Local Business Development 

6 Loan Program that is collateralized by a 

7 second lien position on the property being 

8 constructed or acquired; and 

9 ‘‘(ii) provide, or be affiliated with a 

10 corporation or other entity which provides, 

11 financing collateralized by a first lien on 

12 the same property. 

13 ‘‘(B) EXCEPTION.—During the 2-year pe14 riod beginning on the date of enactment of the 

15 Small Business Reauthorization and Improve16 ments Act of 2006, a certified development 

17 company that was participating as a first mort18 gage lender for the Local Business Develop19 ment Loan Program in either of fiscal years 

20 2004 or 2005 may continue to do so. 

21 ‘‘(3) OTHER ECONOMIC DEVELOPMENT ACTIVI22 TIES.—It shall not be a conflict of interest for a cer23 tified development company to operate multiple pro24 grams to assist small business concerns as part of 

25 carrying out its economic development purpose. 


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1 ‘‘(d) MULTISTATE OPERATIONS.— 

2 ‘‘(1) AUTHORIZATION.—Notwithstanding any 

3 other provision of law, the Administrator shall per4 mit a certified development company to make loans 

5 in any State that is contiguous to the State of incor6 poration of that certified development company, only 

7 if such company— 

8 ‘‘(A) is— 

9 ‘‘(i) an accredited lender under section 

10 507; or 

11 ‘‘(ii) a premier certified lender under 

12 section 508; 

13 ‘‘(B) has a membership that contains, 

14 from each of the States in which it operates, 

15 not fewer than 25 members who reside in that 

16 State; 

17 ‘‘(C) has a board of directors that contains 

18 not fewer than 2 members from each State in 

19 which the company makes loans; 

20 ‘‘(D) maintains not fewer than 1 loan com21 mittee, which shall have not fewer than 1 mem22 ber from each State in which the company 

23 makes loans; and 

24 ‘‘(E) submits to the Administrator, in writ25 ing— 


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1 ‘‘(i) a notice of the intention of the 

2 company to make loans in multiple States; 

3 ‘‘(ii) the names of the States in which 

4 the company intends to make loans; and 

5 ‘‘(iii) a detailed statement of how the 

6 company will comply with this paragraph, 

7 including a list of the members described 

8 in subparagraph (B). 

9 ‘‘(2) REVIEW.—The Administrator shall verify 

10 whether a certified development company satisfies 

11 the requirements of paragraph (1) on an expedited 

12 basis and, not later than 30 days after the date on 

13 which the Administrator receives the statement de14 scribed in paragraph (1)(E)(iii), the Administrator 

15 shall determine whether such company satisfies such 

16 criteria and provide notice to such company. 

17 ‘‘(3) LOAN COMMITTEE PARTICIPATION.—For 

18 any loan made by a company described in paragraph 

19 (1), not fewer than 1 member of the loan committee 

20 from the State in which the loan is to be made shall 

21 participate in the review of such loan. 

22 ‘‘(4) AGGREGATE ACCOUNTING.—A company 

23 described in paragraph (1) may maintain an aggre24 gate accounting of all revenue and expenses of the 

25 company for purposes of this title. 


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1 ‘‘(5) SERVICE TO CERTIFIED DEVELOPMENT

2 COMPANIES.— 

3 ‘‘(A) IN GENERAL.—Except as provided in 

4 subparagraph (B), an associate of a certified 

5 development company may not be an officer, di6 rector, or manager of more than 1 certified de7 velopment company. 

8 ‘‘(B) EXCEPTION.— 

9 ‘‘(i) IN GENERAL.—Notwithstanding 

10 any other provision of law, a person who is 

11 serving on the board of directors of a cer12 tified development company may serve on 

13 the board of directors, but not as an offi14 cer, of not more than 1 additional certified 

15 development company, if— 

16 ‘‘(I) such companies are not lo17 cated in the same State; 

18 ‘‘(II) each board of directors de19 termines that the service by such per20 son on such board does not constitute 

21 a conflict of interest; and 

22 ‘‘(III) there is not a contractual 

23 relationship between— 

24 ‘‘(aa) the person and such 

25 additional certified development 


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1 company, except for the contract 

2 of such person to serve as a 

3 member of the board of directors 

4 of such company, if any; or 

5 ‘‘(bb) the certified develop6 ment companies of which such 

7 person is a member of the board 

8 of directors. 

9 ‘‘(ii) MAXIMUM NUMBER OF MEM10 BERS.—A certified development company 

11 may not have more than 1 member of the 

12 board of directors of such company in com13 mon with any other board of directors of 

14 a certified development company. 

15 ‘‘(C) DEFINITION.—As used in this para16 graph, the term ‘associate of a certified develop17 ment company’ has the meaning given the term 

18 ‘Associate of a CDC’ in section 120.10 of title 

19 13, Code of Federal Regulations (or any cor20 responding similar regulation or ruling). 

21 ‘‘(6) LOCAL JOB CREATION REQUIREMENTS.— 

22 Any certified development company making loans in 

23 multiple States shall satisfy any applicable job cre24 ation or retention requirements separately for each 

25 such State. Such a company shall not count jobs 


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1 created or retained in 1 State towards any applica2 ble job creation or retention requirement in another 

3 State. 

4 ‘‘(7) CONTIGUOUS STATES.—For purposes of 

5 this subsection, the States of Alaska and Hawaii 

6 shall be deemed to be contiguous to any State abut7 ting the Pacific Ocean. 

8 ‘‘(8) LOCAL ECONOMIC AREA REQUIREMENT

9 AND EXEMPTION.— 

10 ‘‘(A) DEFINITION.—In this paragraph, the 

11 term ‘local economic area’ means an area, as 

12 determined by the Administrator, that— 

13 ‘‘(i) is in a State other than the State 

14 in which a development company is incor15 porated; 

16 ‘‘(ii) shares a border with the area of 

17 operations of the development company; 

18 and 

19 ‘‘(iii) is a part of a local trade area 

20 (including a city that is bisected by a State 

21 line and a metropolitan statistical area 

22 that is bisected by a State line) that is 

23 contiguous to the area of operations of the 

24 development company. 


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1 ‘‘(B) EXEMPTION.—An applicant operating 

2 in a local economic area shall not be considered 

3 to be operating in a multistate area, and shall 

4 not be required to comply with the require5 ments for multistate operation. 

6 ‘‘(e) RESTRICTIONS ON DEVELOPMENT COMPANY

7 ASSISTANCE.—’’. 

8 SEC. 332. CONFORMING AMENDMENTS. 

9 Section 503 of the Small Business Investment Act 

10 of 1958 (15 U.S.C. 697) is amended— 

11 (1) in subsection (a)(1), by striking ‘‘qualified 

12 State or local development company’’ and inserting 

13 ‘‘certified development company’’; and 

14 (2) by striking subsection (e) and inserting the 

15 following: 

16 ‘‘(e) SECTION 7(a) LOANS.—Notwithstanding any 

17 other provision of law, a certified development company 

18 is authorized to prepare applications for deferred partici19 pation loans under section 7(a) of the Small Business Act, 

20 to service such loans, and to charge a reasonable fee for 

21 servicing such loans.’’. 

22 SEC. 333. CLOSING COSTS. 

23 Section 503(b) of the Small Business Investment Act 

24 of 1958 (15 U.S.C. 697(b)) is amended by striking para25 graph (4) and inserting the following: 


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1 ‘‘(4) the aggregate amount of such debenture 

2 does not exceed the amount of the loans to be made 

3 from the proceeds of such debenture plus, at the 

4 election of the borrower, other amounts attributable 

5 to the administrative and closing costs of such loans, 

6 except for the attorney fees of the borrower;’’. 

7 SEC. 334. DEFINITION OF RURAL. 

8 Section 501 of the Small Business Investment Act 

9 of 1958 (15 U.S.C. 695) is amended by adding at the end 

10 the following: 

11 ‘‘(f) As used in this title, the term ‘rural’ includes 

12 any area that is not— 

13 ‘‘(1) a city or town that has a population great14 er than 50,000 inhabitants; or 

15 ‘‘(2) the urbanized area contiguous and adja16 cent to a city or town described in paragraph (1).’’. 

17 SEC. 335. REGULATIONS AND EFFECTIVE DATE. 

18 (a) IN GENERAL.—Except as provided in subsection 

19 (b), the Administrator shall— 

20 (1) publish proposed rules to implement this 

21 subtitle and the amendments made by this subtitle, 

22 not later than 120 days after the date of enactment 

23 of this Act; and 


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1 (2) publish such rules in final form not later 

2 than 120 days after the date of publication under 

3 paragraph (1). 

4 (b) MULTISTATE OPERATIONS.—As soon as is prac5 ticable after the date of enactment of this Act, the Admin6 istrator shall promulgate regulations to implement section 

7 506(d) of the Small Business Investment Act of 1958, as 

8 added by this subtitle. Such regulations shall become ef9 fective not later than 120 days after the date of enactment 

10 of this Act. 

11 (c) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as otherwise specifi13 cally provided this subtitle, this subtitle and the 

14 amendments made by this subtitle shall become ef15 fective 240 days after the date of enactment of this 

16 Act, regardless of whether the Administrator has 

17 promulgated the regulations required under sub18 section (a). 

19 (2) MULTISTATE OPERATIONS.—Section 506(d) 

20 of the Small Business Investment Act of 1958, as 

21 added by this subtitle, shall become effective 120 

22 days after the date of enactment of this Act, regard23 less of whether the Administrator has promulgated 

24 the regulations required under subsection (b). 


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1 SEC. 336. LOW-INCOME GEOGRAPHIC AREAS. 

2 (a) MODIFICATION OF DEFINITION OF LOW-INCOME

3 GEOGRAPHIC AREA FOR PURPOSES OF NEW MARKETS

4 VENTURE CAPITAL PROGRAM.— 

5 (1) IN GENERAL.—Section 351 of the Small 

6 Business Investment Act of 1958 (15 U.S.C. 689) is 

7 amended— 

8 (A) by striking paragraph (2); 

9 (B) in paragraph (3), by striking ‘‘(3)’’ 

10 and all that follows through the end of subpara11 graph (A) and inserting the following: 

12 ‘‘(2) LOW-INCOME GEOGRAPHIC AREA.—The 

13 term ‘low-income geographic area’ means— 

14 ‘‘(A) any ‘low-income community’, as that 

15 term is defined in section 45D of the Internal 

16 Revenue Code of 1986 (relating to the new 

17 markets tax credit); and’’; and 

18 (C) by redesignating paragraphs (4) 

19 through (8) as paragraphs (3) through (7), re20 spectively. 

21 (2) RETROACTIVE APPLICATION OF AMENDED

22 DEFINITION TO CAPITAL REQUIREMENT.—The defi23 nition of a low-income geographic area in section 

24 351(2) of the Small Business Investment Act of 

25 1958, as amended by paragraph (1) of this sub26 section, shall apply to private capital raised under 


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1 section 354(d)(1) of the Small Business Investment 

2 Act of 1958 (15 U.S.C. 689c(d)(1)) before, on, or 

3 after the date of enactment of this Act. 

4 (b) STUDY ON AVAILABILITY OF EQUITY CAPITAL.— 

5 (1) STUDY REQUIRED.—Not later than the end 

6 of the 180-day period beginning on the date of en7 actment of this Act, the Chief Counsel for Advocacy 

8 of the Administration shall conduct a study on the 

9 availability of equity capital in low-income geo10 graphic areas. 

11 (2) REPORT.—Not later than 90 days after the 

12 completion of the study under paragraph (1), the 

13 Administrator shall submit to Congress a report con14 taining the findings of the study required under 

15 paragraph (1) and any recommendations of the Ad16 ministrator based on such study. 

17 SEC. 337. LIMITATION ON TIME FOR FINAL APPROVAL OF 

18 COMPANIES. 

19 Section 354(d) of the Small Business Investment Act 

20 of 1958 (15 U.S.C. 689c(d)) is amended by striking ‘‘a 

21 period of time, not to exceed 2 years,’’ and inserting ‘‘2 

22 years’’. 


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1 TITLE IV—DISASTER RESPONSE 

2 Subtitle A—Private Disaster Loans 

3 SEC. 401. PRIVATE DISASTER LOANS. 

4 (a) IN GENERAL.—Section 7 of the Small Business 

5 Act (15 U.S.C. 636) is amended— 

6 (1) by redesignating subsections (c) and (d) as 

7 subsections (d) and (e), respectively; and 

8 (2) by inserting after subsection (b) the fol9 lowing: 

10 ‘‘(c) PRIVATE DISASTER LOANS.— 

11 ‘‘(1) DEFINITIONS.—In this subsection— 

12 ‘‘(A) the term ‘disaster area’ means a 

13 county, parish, or similar unit of general local 

14 government in which a disaster was declared 

15 under subsection (b); 

16 ‘‘(B) the term ‘eligible small business con17 cern’ means a business concern that is— 

18 ‘‘(i) is a small business concern, as 

19 defined in this Act; or 

20 ‘‘(ii) is a small business concern, as 

21 defined in section 103 of the Small Busi22 ness Investment Act of 1958; and 

23 ‘‘(C) the term ‘qualified private lender’ 

24 means any privately-owned bank or other lend25 ing institution that the Administrator deterVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 mines meets the criteria established under para2 graph (10). 

3 ‘‘(2) AUTHORIZATION.—The Administrator may 

4 guarantee timely payment of all principal and inter5 est as scheduled on any loan issued— 

6 ‘‘(A) by a qualified private lender to an eli7 gible small business concern located in a dis8 aster area; and 

9 ‘‘(B) during the 24-month period begin10 ning on the date on which the disaster area is 

11 designated. 

12 ‘‘(3) USE OF LOANS.—A loan guaranteed by 

13 the Administrator under this subsection may be used 

14 for— 

15 ‘‘(A) any purpose authorized under sub16 section (a) or (b); and 

17 ‘‘(B) acquiring or developing real estate for 

18 the purpose of selling or renting such real es19 tate. 

20 ‘‘(4) ONLINE APPLICATIONS.— 

21 ‘‘(A) IN GENERAL.— 

22 ‘‘(i) ESTABLISHMENT.—The Adminis23 trator may establish, directly or through 

24 an agreement with another entity, an onVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 line application process for loans guaran2 teed under this subsection. 

3 ‘‘(ii) OTHER FEDERAL ASSISTANCE.— 

4 The Administrator may coordinate with 

5 the head of any other appropriate Federal 

6 agency so that any application submitted 

7 through an online application process es8 tablished under clause (i) may be consid9 ered for any other Federal assistance pro10 gram for disaster relief. 

11 ‘‘(B) CONTENTS.— 

12 ‘‘(i) IN GENERAL.—An online applica13 tion process established under subpara14 graph (A) shall allow an applicant for a 

15 guarantee under this subsection to specify 

16 the qualified private lender from which the 

17 applicant seeks to obtain a loan. 

18 ‘‘(ii) OFFERS FOR LOANS.— 

19 ‘‘(I) IN GENERAL.—If an appli20 cant does not specify a qualified pri21 vate lender under clause (i), any 

22 qualified private lender may be se23 lected to or opt to consider the appli24 cation. 


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1 ‘‘(II) PROCESS.—The Adminis2 trator may, via the online process or 

3 another predetermined and objective 

4 process, determine a means of distrib5 uting or otherwise making available 

6 for consideration applications where a 

7 qualified private lender has not been 

8 specified by the applicant. 

9 ‘‘(5) REFINANCING.—A loan guaranteed under 

10 this subsection may be used to refinance any debt 

11 under this Act or the Small Business Investment 

12 Act of 1958. 

13 ‘‘(6) MAXIMUM AMOUNTS.— 

14 ‘‘(A) GUARANTEE PERCENTAGE.—The Ad15 ministrator may guarantee not more than 85 

16 percent of a loan under this subsection. 

17 ‘‘(B) LOAN AMOUNTS.—The maximum 

18 amount of a loan guaranteed under this sub19 section shall be $3,000,000. 

20 ‘‘(7) LOAN TERM.—The longest term of a loan 

21 for a loan guaranteed under this subsection shall 

22 be— 

23 ‘‘(A) 15 years for any loan that is issued 

24 without collateral; and 


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1 ‘‘(B) 25 years for any loan that is issued 

2 with collateral. 

3 ‘‘(8) FEES.— 

4 ‘‘(A) IN GENERAL.—The Administrator 

5 may not collect a guarantee fee under this sub6 section. 

7 ‘‘(B) ORIGINATION FEE.—The Adminis8 trator shall pay a qualified private lender an 

9 origination fee for a loan guaranteed under this 

subsection equal to 15 10 ⁄100 of 1 percent of the 

11 amount of the loan. 

12 ‘‘(9) DOCUMENTATION.—A qualified private 

13 lender may use its own loan documentation for a 

14 loan guaranteed by the Administrator, to the extent 

15 authorized by the Administrator. The ability of a 

16 lender to use its own loan documentation for a loan 

17 offered under this subsection shall not be considered 

18 part of the criteria for becoming a qualified private 

19 lender under the regulations promulgated under 

20 paragraph (10)(B). 

21 ‘‘(10) IMPLEMENTATION.— 

22 ‘‘(A) IN GENERAL.—Not later than 30 

23 days after the date of enactment of the Small 

24 Business Reauthorization and Improvements 

25 Act of 2006, the Administrator shall— 


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1 ‘‘(i) establish interim criteria for 

2 qualified private lenders; and 

3 ‘‘(ii) begin accepting applications from 

4 banks and lending institutions. 

5 ‘‘(B) REGULATIONS.— 

6 ‘‘(i) IN GENERAL.—Not later than 90 

7 days after the date of enactment of the 

8 Small Business Reauthorization and Im9 provements Act of 2006, the Administrator 

10 shall promulgate regulations establishing 

11 permanent criteria for qualified private 

12 lenders. 

13 ‘‘(ii) EXISTING QUALIFIED PRIVATE

14 LENDERS.—A bank or lending institution 

15 that the Administrator determined met the 

16 criteria established under subparagraph 

17 (A)(i) may continue to operate as a quali18 fied private lender if the Administrator de19 termines that such bank or lending institu20 tion meets the criteria established under 

21 clause (i). 

22 ‘‘(11) OTHER ASSISTANCE.—The fact that a 

23 small business concern receives assistance under this 

24 subsection shall not preclude such business concern 

25 from receiving other assistance under this Act. 


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1 ‘‘(12) AUTHORIZATION OF APPROPRIATIONS.— 

2 ‘‘(A) IN GENERAL.—Amounts necessary to 

3 carry out this subsection shall be made avail4 able from amounts appropriated to the Admin5 istration under subsection (b). 

6 ‘‘(B) AUTHORITY TO REDUCE INTEREST

7 RATES.—Funds appropriated to the Adminis8 tration to carry out this subsection, may be 

9 used by the Administrator, to the extent avail10 able, to reduce the applicable rate of interest 

11 for a loan guaranteed under this subsection by 

12 not more than 3 percentage points.’’. 

13 (b) EFFECTIVE DATE.— 

14 (1) IN GENERAL.—The amendments made by 

15 this section shall apply to disasters declared under 

16 section 7(b)(2) of the Small Business Act (631 

17 U.S.C. 636(b)(2)) before, on, or after the date of en18 actment of this Act. 

19 (2) CONSTRUCTION.—For any disaster de20 scribed in paragraph (1) that was declared before 

21 the date of enactment of this Act, the 24-month pe22 riod described in section 7(c)(2)(B) of the Small 

23 Business Act, as amended by this Act, shall begin on 

24 the date on which such disaster was declared. 


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1 SEC. 402. TECHNICAL AND CONFORMING AMENDMENTS. 

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

3 amended— 

4 (1) in section 4(c)— 

5 (A) in paragraph (1), by striking ‘‘7(c)(2)’’ 

6 and inserting ‘‘7(d)(2)’’; and 

7 (B) in paragraph (2)— 

8 (i) by striking ‘‘7(c)(2)’’ and inserting 

9 ‘‘7(d)(2)’’; and 

10 (ii) by striking ‘‘7(e),’’; and 

11 (2) in section 7(b), in the undesignated matter 

12 following paragraph (3)— 

13 (A) by striking ‘‘That the provisions of 

14 paragraph (1) of subsection (c)’’ and inserting 

15 ‘‘That the provisions of paragraph (1) of sub16 section (d)’’; and 

17 (B) by striking ‘‘Notwithstanding the pro18 visions of any other law the interest rate on the 

19 Administration’s share of any loan made under 

20 subsection (b) except as provided in subsection 

21 (c),’’ and inserting ‘‘Notwithstanding any other 

22 provision of law, and except as provided in sub23 section (d), the interest rate on the Administra24 tion’s share of any loan made under subsection 

25 (b)’’. 


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1 Subtitle B—Disaster Relief and 

2 Reconstruction 

3 SEC. 421. DEFINITION OF DISASTER AREA. 

4 In this subtitle, the term ‘‘disaster area’’ means an 

5 area affected by a natural or other disaster, as determined 

6 for purposes of paragraph (1) or (2) of section 7(b) of 

7 the Small Business Act, during the period of such declara8 tion. 

9 SEC. 422. DISASTER LOANS TO NONPROFITS. 

10 Section 7(b) of the Small Business Act (15 U.S.C. 

11 636(b)) is amended by inserting immediately after para12 graph (3) the following: 

13 ‘‘(4) LOANS TO NONPROFITS.—In addition to 

14 any other loan authorized by this subsection, the Ad15 ministrator may make such loans (either directly or 

16 in cooperation with banks or other lending institu17 tions through agreements to participate on an imme18 diate or deferred basis) as the Administrator deter19 mines appropriate to a nonprofit organization lo20 cated or operating in an area affected by a natural 

21 or other disaster, as determined under paragraph 

22 (1) or (2), or providing services to persons who have 

23 evacuated from any such area.’’. 


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1 SEC. 423. DISASTER LOAN AMOUNTS. 

2 (a) INCREASED LOAN CAPS.—Section 7(b) of the 

3 Small Business Act (15 U.S.C. 636(b)) is amended by in4 serting immediately after paragraph (4), as added by this 

5 subtitle, the following: 

6 ‘‘(5) INCREASED LOAN CAPS.— 

7 ‘‘(A) AGGREGATE LOAN AMOUNTS.—Ex8 cept as provided in clause (ii), and notwith9 standing any other provision of law, the aggre10 gate loan amount outstanding and committed to 

11 a borrower under this subsection may not ex12 ceed $5,000,000. 

13 ‘‘(B) WAIVER AUTHORITY.—The Adminis14 trator may, at the discretion of the Adminis15 trator, waive the aggregate loan amount estab16 lished under clause (i).’’. 

17 (b) DISASTER MITIGATION.— 

18 (1) IN GENERAL.—Section 7(b)(1)(A) of the 

19 Small Business Act (15 U.S.C. 636(b)(1)(A)) is 

20 amended by inserting ‘‘of the aggregate costs of 

21 such damage or destruction (whether or not com22 pensated for by insurance or otherwise)’’ after ‘‘20 

23 per centum’’. 

24 (2) EFFECTIVE DATE.—The amendment made 

25 by paragraph (1) shall apply with respect to a loan 


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1 or guarantee made after the date of enactment of 

2 this Act. 

3 (c) TECHNICAL AMENDMENTS.—Section 7(b) of the 

4 Small Business Act (15 U.S.C. 636(b)) is amended— 

5 (1) in the matter preceding paragraph (1), by 

6 striking ‘‘the, Administration’’ and inserting ‘‘the 

7 Administration’’; 

8 (2) in paragraph (2)(A), by striking ‘‘Disaster 

9 Relief and Emergency Assistance Act’’ and inserting 

10 ‘‘Robert T. Stafford Disaster Relief and Emergency 

11 Assistance Act (42 U.S.C. 5121 et seq.)’’; and 

12 (3) in the undesignated matter at the end— 

13 (A) by striking ‘‘, (2), and (4)’’ and insert14 ing ‘‘and (2)’’; and 

15 (B) by striking ‘‘, (2), or (4)’’ and insert16 ing ‘‘(2)’’. 

17 SEC. 424. SMALL BUSINESS DEVELOPMENT CENTER PORT18 ABILITY GRANTS. 

19 Section 21(a)(4)(C)(viii) of the Small Business Act 

20 (15 U.S.C. 648(a)(4)(C)(viii)) is amended— 

21 (1) in the first sentence, by striking ‘‘as a re22 sult of a business or government facility down sizing 

23 or closing, which has resulted in the loss of jobs or 

24 small business instability’’ and inserting ‘‘due to 


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1 events that have resulted or will result in, business 

2 or government facility downsizing or closing’’; and 

3 (2) by adding at the end ‘‘At the discretion of 

4 the Administrator, the Administrator may make an 

5 award greater than $100,000 to a recipient to ac6 commodate extraordinary occurrences having a cata7 strophic impact on the small business concerns in a 

8 community.’’. 

9 SEC. 425. ASSISTANCE TO OUT-OF-STATE BUSINESSES. 

10 Section 21(b)(3) of the Small Business Act (15 

11 U.S.C. 648(b)(3)) is amended— 

12 (1) by striking ‘‘At the discretion’’ and insert13 ing the following: ‘‘SMALL BUSINESS DEVELOPMENT

14 CENTERS.— 

15 ‘‘(A) IN GENERAL.—At the discretion’’; 

16 and 

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

18 ‘‘(B) DURING DISASTERS.— 

19 ‘‘(i) IN GENERAL.—At the discretion 

20 of the Administrator, the Administrator 

21 may authorize a small business develop22 ment center to provide such assistance to 

23 small business concerns located outside of 

24 the State, without regard to geographic 

25 proximity, if the small business concerns 


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1 are located in a disaster area declared 

2 under section 7(b)(2)(A). 

3 ‘‘(ii) CONTINUITY OF SERVICES.—A 

4 small business development center that 

5 provides counselors to an area described in 

6 clause (i) shall, to the maximum extent 

7 practicable, ensure continuity of services in 

8 any State in which such small business de9 velopment center otherwise provides serv10 ices. 

11 ‘‘(iii) ACCESS TO DISASTER RECOVERY

12 FACILITIES.—For purposes of providing 

13 disaster recovery assistance under this sub14 paragraph, the Administrator shall, to the 

15 maximum extent practicable, permit small 

16 business development center personnel to 

17 use any site or facility designated by the 

18 Administrator for use to provide disaster 

19 recovery assistance.’’. 

20 SEC. 426. OUTREACH PROGRAMS. 

21 (a) IN GENERAL.—Not later than 30 days after the 

22 date of the declaration of a disaster area, the Adminis23 trator may establish a contracting outreach and technical 

24 assistance program for small business concerns which have 


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1 had a primary place of business in, or other significant 

2 presence in, such disaster area. 

3 (b) ADMINISTRATOR ACTION.—The Administrator 

4 may fulfill the requirement of subsection (a) by acting 

5 through— 

6 (1) the Administration; 

7 (2) the Federal agency small business officials 

8 designated under section 15(k)(1) of the Small Busi9 ness Act (15 U.S.C. 644(k)(1)); or 

10 (3) any Federal, State, or local government en11 tity, higher education institution, procurement tech12 nical assistance center, or private nonprofit organi13 zation that the Administrator may determine appro14 priate, upon conclusion of a memorandum of under15 standing or assistance agreement, as appropriate, 

16 with the Administrator. 

17 SEC. 427. SMALL BUSINESS BONDING THRESHOLD. 

18 (a) IN GENERAL.—Except as provided in subsection 

19 (b), and notwithstanding any other provision of law, for 

20 any procurement related to a major disaster (as that term 

21 is defined in section 102 of the Robert T. Stafford Dis22 aster Relief and Emergency Assistance Act (42 U.S.C. 

23 5122)), the Administrator may, upon such terms and con24 ditions as the Administrator may prescribe, guarantee and 

25 enter into commitments to guarantee any surety against 


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1 loss resulting from a breach of the terms of a bid bond, 

2 payment bond, performance bond, or bonds ancillary 

3 thereto, by a principal on any total work order or contract 

4 amount at the time of bond execution that does not exceed 

5 $5,000,000. 

6 (b) INCREASE OF AMOUNT.—Upon request of the 

7 head of any Federal agency other than the Administration 

8 involved in reconstruction efforts in response to a major 

9 disaster, the Administrator may guarantee and enter into 

10 a commitment to guarantee any security against loss 

11 under subsection (a) on any total work order or contract 

12 amount at the time of bond execution that does not exceed 

13 $10,000,000. 

14 SEC. 428. SMALL BUSINESS PARTICIPATION. 

15 In order to facilitate the maximum practicable par16 ticipation of small business concerns in activities related 

17 to relief and recovery from an event for which a disaster 

18 area was declared, the Administrator and the head of any 

19 Federal agency making procurements related to the after20 math of the disaster, may, at the discretion of the Admin21 istrator, set a goal of awarding to small business concerns 

22 not less than 30 percent of amounts expended for prime 

23 contracts and not less than 40 percent of amounts ex24 pended for subcontracts on procurements by such agency 

25 related to the aftermath of the disaster. 


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1 SEC. 429. EMERGENCY PROCUREMENT AUTHORITY. 

2 (a) SMALL BUSINESS RESERVATION OFFSET.—Sec3 tion 15(j) of the Small Business Act (15 U.S.C. 644(j)) 

4 is amended by adding at the end the following: 

5 ‘‘(4) For any contract involving the use of the special 

6 emergency procurement authority under section 32A(c) of 

7 the Office of Federal Procurement Policy Act (41 U.S.C. 

8 428a(c)), the dollar ceiling of the small business reserva9 tion established in paragraph (1) shall be adjusted to 

10 match the applicable amount of the simplified acquisition 

11 threshold.’’. 

12 (b) RETENTION OF SMALL BUSINESS SUBCON13 TRACTING.—Section 8(d)(4)(D) of the Small Business Act 

14 (15 U.S.C. 637(d)(4)(D)) is amended— 

15 (1) by striking ‘‘(D) No contract’’ and inserting 

16 the following: 

17 ‘‘(D) SMALL BUSINESS PARTICIPATION.— 

18 ‘‘(i) IN GENERAL.—No contract’’; and 

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

20 ‘‘(ii) EMERGENCY PROCUREMENTS.— 

21 ‘‘(I) IN GENERAL.—For any contract 

22 which otherwise meets the requirements of 

23 this subsection, and which involves the use 

24 of special emergency procurement author25 ity under section 32A(c) of the Office of 

26 Federal Procurement Policy Act (41 


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1 U.S.C. 428a(c)), the subcontracting plan 

2 required under this subsection shall be ne3 gotiated as soon as practicable, but not 

4 later than 30 days after the date on which 

5 the contract is awarded. 

6 ‘‘(II) PAYMENT.—Not greater than 

7 50 percent of the amounts due under any 

8 contract described in subclause (I) may be 

9 paid, unless a subcontracting plan compli10 ant with this subsection is negotiated by 

11 the contractor.’’. 

12 SEC. 430. PAPERWORK RECIPROCITY FOR SMALL DISASTER 

13 CONTRACTORS. 

14 Not later than 30 days after the date of enactment 

15 of this Act, the Administrator shall ensure that all eligible 

16 small business concerns receive the full benefit of reci17 procity in certifications between Federal and federally 

18 funded contracting programs for small business concerns 

19 owned and controlled by socially and economically dis20 advantaged individuals. 

21 SEC. 431. SMALL BUSINESS MULTIPLE AWARD DISASTER 

22 CONTRACTS. 

23 (a) IN GENERAL.—The Administrator and the Ad24 ministrator for Federal Procurement Policy shall work 

25 with other Federal agencies to ensure that the Federal 


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1 Government establishes and maintains multiple award 

2 contracts with small business concerns of all categories on 

3 a nationwide and regional basis for the purpose of con4 ducting or supporting Federal disaster recovery efforts. 

5 (b) REPORT.—At the end of each fiscal year, the Ad6 ministrator and the Administrator for Federal Procure7 ment Policy shall submit to the Committee on Small Busi8 ness and Entrepreneurship of the Senate and the Com9 mittee on Small Business of the House of Representatives 

10 a report describing the terms, conditions, and status of 

11 the contracts described in subsection (a) awarded during 

12 the preceding fiscal year. 

13 SEC. 432. CONTRACTING PRIORITY FOR LOCAL SMALL 

14 BUSINESSES. 

15 Section 15(d) of the Small Business Act (15 U.S.C. 

16 644(d)) is amended— 

17 (1) by striking ‘‘(d) For purposes’’ and insert18 ing the following: 

19 ‘‘(d) CONTRACTING PRIORITIES.— 

20 ‘‘(1) IN GENERAL.—For purposes’’; and 

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

22 ‘‘(2) DISASTER CONTRACTING PRIORITY IN

23 GENERAL.—The Administrator shall designate any 

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1 ment or underemployment, or a labor surplus area 

2 for purposes of paragraph (1). 

3 ‘‘(3) LOCAL SMALL BUSINESSES.— 

4 ‘‘(A) IN GENERAL.—The head of each ex5 ecutive agency shall give priority in the award6 ing of contracts and the placement of sub7 contracts for disaster relief to local small busi8 ness concerns, by using, as appropriate— 

9 ‘‘(i) preferential factors in evaluations 

10 of contract bids and proposals; 

11 ‘‘(ii) competitions restricted to local 

12 small business concerns, where there is a 

13 reasonable expectation of receiving com14 petitive, reasonably priced bids or pro15 posals from not fewer than 2 local small 

16 business concerns; 

17 ‘‘(iii) requirements of preference for 

18 local small business concerns in subcon19 tracting plans; and 

20 ‘‘(iv) assessments of liquidated dam21 ages and other contractual penalties, in22 cluding contract termination. 

23 ‘‘(B) OTHER DISASTER ASSISTANCE.—Pri24 ority shall be given to local small business con25 cerns in the awarding of contracts and the 


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1 placement of subcontracts for disaster relief in 

2 any Federal procurement and any procurement 

3 by a State or local government made with Fed4 eral disaster assistance funds. 

5 ‘‘(4) DEFINITIONS.—In this subsection— 

6 ‘‘(A) the term ‘declared disaster’ means a 

7 disaster, as designated by the Administrator; 

8 ‘‘(B) the term ‘disaster area’ means any 

9 State or area affected by a declared disaster, as 

10 determined by the Administrator; 

11 ‘‘(C) the term ‘executive agency’ has the 

12 same meaning as in section 105 of title 5, 

13 United States Code; and 

14 ‘‘(D) the term ‘local small business con15 cern’ means a small business concern that— 

16 ‘‘(i) on the date immediately pre17 ceding the date on which a declared dis18 aster occurred— 

19 ‘‘(I) had a principal office in the 

20 disaster area for such declared dis21 aster; and 

22 ‘‘(II) employed a majority of the 

23 workforce of such small business con24 cern in the disaster area for such de25 clared disaster; and 


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1 ‘‘(ii) is capable of performing a sub2 stantial proportion of any contract or sub3 contract for disaster relief within the dis4 aster area for such declared disaster, as 

5 determined by the Administrator.’’. 

6 SEC. 433. TERMINATION OF PROGRAM. 

7 Section 711(c) of the Small Business Competitive 

8 Demonstration Program Act of 1988 (15 U.S.C. 644 note) 

9 is amended by inserting after ‘‘January 1, 1989’’ the fol10 lowing: ‘‘, and shall terminate on the date of enactment 

11 of the Small Business Reauthorization and Improvements 

12 Act of 2006’’. 

13 SEC. 434. INCREASING COLLATERAL REQUIREMENTS. 

14 Section 7(d)(6) of the Small Business Act (15 U.S.C. 

15 636), as so designated by section 401, is amended by 

16 striking ‘‘$10,000’’ and inserting ‘‘$12,000’’. 

17 Subtitle C—Disaster Response 

18 SEC. 451. DEFINITIONS. 

19 In this subtitle— 

20 (1) the term ‘‘approved State Bridge Loan Pro21 gram’’ means a State Bridge Loan Program ap22 proved under section 452(b); 

23 (2) the term ‘‘catastrophic national disaster’’ 

24 has the meaning given the term in section 7(b)(6) 


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1 of the Small Business Act (15 U.S.C. 636(b)), as 

2 added by this Act; 

3 (3) the term ‘‘declared disaster’’ means a major 

4 disaster or a catastrophic national disaster; 

5 (4) the term ‘‘disaster loan program of the Ad6 ministration’’ means assistance under section 7(b) of 

7 the Small Business Act (15 U.S.C. 636(b)); 

8 (5) the term ‘‘disaster update period’’ means 

9 the period beginning on the date on which the Presi10 dent declares a major disaster or a catastrophic na11 tional disaster and ending on the date on which such 

12 declaration terminates; 

13 (6) the term ‘‘major disaster’’ has the meaning 

14 given the term in section 102 of the Robert T. Staf15 ford Disaster Relief and Emergency Assistance Act 

16 (42 U.S.C. 5122); and 

17 (7) the term ‘‘State’’ means any State of the 

18 United States, the District of Columbia, the Com19 monwealth of Puerto Rico, the Northern Mariana Is20 lands, the Virgin Islands, Guam, American Samoa, 

21 and any territory or possession of the United States. 

22 SEC. 452. STATE BRIDGE LOAN GUARANTEE. 

23 (a) AUTHORIZATION.—After issuing guidelines under 

24 subsection (c), the Administrator may guarantee loans 

25 made under an approved State Bridge Loan Program. 


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1 (b) APPROVAL.— 

2 (1) APPLICATION.—A State desiring approval 

3 of a State Bridge Loan Program shall submit an ap4 plication to the Administrator at such time, in such 

5 manner, and accompanied by such information as 

6 the Administrator may require. 

7 (2) CRITERIA.—The Administrator may ap8 prove an application submitted under paragraph (1) 

9 based on such criteria as the Administrator may es10 tablish under this section. 

11 (c) GUIDELINES.— 

12 (1) IN GENERAL.—Not later than 90 days after 

13 the date of enactment of this Act, the Administrator 

14 shall issue to the appropriate economic development 

15 officials in each State, the Committee on Small 

16 Business and Entrepreneurship of the Senate, and 

17 the Committee on Small Business of the House of 

18 Representatives, guidelines regarding approved State 

19 Bridge Loan Programs. 

20 (2) CONTENTS.—The guidelines issued under 

21 paragraph (1) shall— 

22 (A) identify appropriate uses of funds 

23 under an approved State Bridge Loan Program; 

24 (B) set terms and conditions for loans 

25 under an approved State Bridge Loan Program; 


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1 (C) address whether— 

2 (i) an approved State Bridge Loan 

3 Program may charge administrative fees; 

4 and 

5 (ii) loans under an approved State 

6 Bridge Loan Program shall be disbursed 

7 through local banks and other financial in8 stitutions; and 

9 (D) establish the percentage of a loan the 

10 Administrator will guarantee under an approved 

11 State Bridge Loan Program. 

12 SEC. 453. CATASTROPHIC NATIONAL DISASTERS. 

13 Section 7(b) of the Small Business Act (15 U.S.C. 

14 636(b)) is amended by inserting immediately after para15 graph (5), as added by this Act, the following: 

16 ‘‘(6) CATASTROPHIC NATIONAL DISASTERS.— 

17 ‘‘(A) DEFINITION.—In this paragraph the 

18 term ‘catastrophic national disaster’ means a 

19 disaster, natural or other, that the President 

20 determines has caused significant adverse eco21 nomic conditions outside of the geographic 

22 reach of the disaster. 

23 ‘‘(B) AUTHORIZATION.—The Adminis24 trator may make such loans under this para25 graph (either directly or in cooperation with 


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1 banks or other lending institutions through 

2 agreements to participate on an immediate or 

3 deferred basis) as the Administrator determines 

4 appropriate to small business concerns located 

5 anywhere in the United States that are eco6 nomically adversely impacted as a result of a 

7 catastrophic national disaster. 

8 ‘‘(C) LOAN TERMS.—A loan under this 

9 paragraph shall be made on the same terms as 

10 a loan under paragraph (2).’’. 

11 SEC. 454. PUBLIC AWARENESS OF DISASTER DECLARATION 

12 AND APPLICATION PERIODS. 

13 (a) IN GENERAL.—Section 7(b) of the Small Busi14 ness Act (15 U.S.C. 636(b)) is amended by inserting im15 mediately after paragraph (6), as added by this Act, the 

16 following: 

17 ‘‘(7) COORDINATION WITH FEMA.— 

18 ‘‘(A) IN GENERAL.—Notwithstanding any 

19 other provision of law, for any disaster (includ20 ing a catastrophic national disaster) declared 

21 under this subsection or major disaster (as that 

22 term is defined in section 102 of the Robert T. 

23 Stafford Disaster Relief and Emergency Assist24 ance Act (42 U.S.C. 5122)), the Administrator, 

25 in consultation with the Director of the Federal 


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1 Emergency Management Agency, shall ensure, 

2 to the maximum extent practicable, that all ap3 plication periods for disaster relief under this 

4 Act and the Robert T. Stafford Disaster Relief 

5 and Emergency Assistance Act begin on the 

6 same date and end on the same date. 

7 ‘‘(B) DEADLINE EXTENSIONS.—Notwith8 standing any other provision of law— 

9 ‘‘(i) not later than 10 days before the 

10 closing date of an application period for 

11 disaster relief under this Act for any dis12 aster (including a catastrophic national 

13 disaster) declared under this subsection, 

14 the Administrator, in consultation with the 

15 Director of the Federal Emergency Man16 agement Agency, shall notify the Com17 mittee on Small Business and Entrepre18 neurship of the Senate and the Committee 

19 on Small Business of the House of Rep20 resentatives as to whether the Adminis21 trator intends to extend such application 

22 period; and 

23 ‘‘(ii) not later than 10 days before the 

24 closing date of an application period for 

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1 ford Disaster Relief and Emergency Assist2 ance Act for any major disaster (as that 

3 term is defined in section 102 of the Rob4 ert T. Stafford Disaster Relief and Emer5 gency Assistance Act (42 U.S.C. 5122)) 

6 for which the President has declared a cat7 astrophic national disaster under para8 graph (6), the Director of the Federal 

9 Emergency Management Agency, in con10 sultation with the Administrator, shall no11 tify the Committee on Small Business and 

12 Entrepreneurship of the Senate and the 

13 Committee on Small Business of the 

14 House of Representatives as to whether 

15 the Director intends to extend such appli16 cation period. 

17 ‘‘(8) PUBLIC AWARENESS OF DISASTERS.—If a 

18 disaster (including a catastrophic national disaster) 

19 is declared under this subsection, the Administrator 

20 shall make every effort to communicate through 

21 radio, television, print, and web-based outlets, all 

22 relevant information needed by disaster loan appli23 cants, including— 

24 ‘‘(A) the date of such declaration; 


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1 ‘‘(B) cities and towns within the area of 

2 such declaration; 

3 ‘‘(C) loan application deadlines related to 

4 such disaster; 

5 ‘‘(D) all relevant contact information for 

6 victim services available through the Adminis7 tration (including links to small business devel8 opment center websites); 

9 ‘‘(E) links to relevant Federal and State 

10 disaster assistance websites; 

11 ‘‘(F) information on eligibility criteria for 

12 Federal Emergency Management Agency dis13 aster assistance applications, as well as for Ad14 ministration loan programs, including where 

15 such applications can be found; and 

16 ‘‘(G) application materials that clearly 

17 state the function of the Administration as the 

18 Federal source of disaster loans for homeowners 

19 and renters.’’. 

20 (b) COORDINATION OF AGENCIES AND OUTREACH.— 

21 Not later than 90 days after the date of enactment of this 

22 Act, the Administrator and the Director of the Federal 

23 Emergency Management Agency shall enter into an agree24 ment that ensures adequate lodging and transportation for 

25 employees of the Administration, contract employees, and 


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1 volunteers during a major disaster, if such staff are need2 ed to assist businesses, homeowners, or renters in recov3 ery. 

4 (c) MARKETING AND OUTREACH.—Not later than 90 

5 days after the date of enactment of this Act, the Adminis6 trator shall create a marketing and outreach plan that— 

7 (1) encourages a proactive approach to the dis8 aster relief efforts of the Administration; 

9 (2) distinguishes between disaster services pro10 vided by the Administration and disaster services 

11 provided by the Federal Emergency Management 

12 Agency, including contact information, application 

13 information, and timelines for submitting applica14 tions, the review of applications, and the disburse15 ment of funds; 

16 (3) describes the different disaster loan pro17 grams of the Administration, including how they are 

18 made available and what eligibility requirements 

19 exist for each loan program; 

20 (4) provides for regional marketing, focusing on 

21 disasters occurring in each region before the date of 

22 enactment of this Act, and likely scenarios for disas23 ters in each such region; and 


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1 (5) ensures that the marketing plan is made 

2 available at small business development centers and 

3 on the website of the Administration. 

4 SEC. 455. CONSISTENCY BETWEEN ADMINISTRATION REGU5 LATIONS AND STANDARD OPERATING PROCE6 DURES. 

7 (a) IN GENERAL.—The Administrator shall, prompt8 ly following the date of enactment of this Act, conduct 

9 a study of whether the standard operating procedures of 

10 the Administration for loans offered under section 7(b) of 

11 the Small Business Act are consistent with the regulations 

12 of the Administration for administering the disaster loan 

13 program. 

14 (b) REPORT.—Not later than 180 days after the date 

15 of enactment of this Act, the Administration shall submit 

16 to Congress a report containing all findings and rec17 ommendations of the study conducted under subsection 

18 (a). 

19 SEC. 456. PROCESSING DISASTER LOANS. 

20 (a) AUTHORITY FOR QUALIFIED PRIVATE CONTRAC21 TORS TO PROCESS DISASTER LOANS.—Section 7(b) of the 

22 Small Business Act (15 U.S.C. 636(b)) is amended by in23 serting immediately after paragraph (8), as added by this 

24 Act, the following: 


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1 ‘‘(9) AUTHORITY FOR QUALIFIED PRIVATE CON2 TRACTORS.— 

3 ‘‘(A) DISASTER LOAN PROCESSING.—The 

4 Administrator may enter into an agreement 

5 with a qualified private contractor, as deter6 mined by the Administrator, to process loans 

7 under this subsection in the event of a major 

8 disaster (as defined in section 102 of the Rob9 ert T. Stafford Disaster Relief and Emergency 

10 Assistance Act (42 U.S.C. 5122)) or a cata11 strophic national disaster declared under para12 graph (6), under which the Administrator shall 

13 pay the contractor a fee for each loan proc14 essed. 

15 ‘‘(B) LOAN LOSS VERIFICATION SERV16 ICES.—The Administrator may enter into an 

17 agreement with a qualified lender or loss 

18 verification professional, as determined by the 

19 Administrator, to verify losses for loans under 

20 this subsection in the event of a major disaster 

21 (as defined in section 102 of the Robert T. 

22 Stafford Disaster Relief and Emergency Assist23 ance Act (42 U.S.C. 5122)) or a catastrophic 

24 national disaster declared under paragraph (6), 

25 under which the Administrator shall pay the 


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1 lender or verification professional a fee for each 

2 loan for which such lender or verification pro3 fessional verifies losses.’’. 

4 (b) COORDINATION OF EFFORTS BETWEEN THE AD5 MINISTRATOR AND THE INTERNAL REVENUE SERVICE TO

6 EXPEDITE LOAN PROCESSING.—The Administrator and 

7 the Commissioner of Internal Revenue shall, to the max8 imum extent practicable, ensure that all relevant and al9 lowable tax records for loan approval are shared with loan 

10 processors in an expedited manner, upon request by the 

11 Administrator. 

12 (c) REPORT ON LOAN APPROVAL RATE.— 

13 (1) IN GENERAL.—Not later than 6 months 

14 after the date of enactment of this Act, the Adminis15 trator shall submit a report to the Committee on 

16 Small Business and Entrepreneurship of the Senate 

17 and the Committee on Small Business of the House 

18 of Representatives detailing how the Administration 

19 can improve the processing of applications under the 

20 disaster loan program of the Administration. 

21 (2) CONTENTS.—The report submitted under 

22 paragraph (1) shall include— 

23 (A) recommendations, if any, regarding— 

24 (i) staffing levels during a major dis25 aster; 


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1 (ii) how to improve the process for 

2 processing, approving, and disbursing 

3 loans under the disaster loan program of 

4 the Administration, to ensure that the 

5 maximum assistance is provided to victims 

6 in a timely manner; 

7 (iii) the viability of using alternative 

8 methods for assessing the ability of an ap9 plicant to repay a loan, included the credit 

10 score of the applicant on the day before 

11 the date on which the disaster for which 

12 the applicant is seeking assistance was de13 clared; and 

14 (iv) methods for the Administration to 

15 expedite loss verification and loan proc16 essing of disaster loans during a major dis17 aster for businesses affected by, and lo18 cated in the area for which the President 

19 declared, the major disaster that are a 

20 major source of employment in the area or 

21 are vital to recovery efforts in the region 

22 (including providing debris removal serv23 ices, manufactured housing, or building 

24 materials); and 


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1 (B) the plans of the Administrator for im2 plementing any recommendation made under 

3 subparagraph (A). 

4 SEC. 457. DEVELOPMENT AND IMPLEMENTATION OF 

5 MAJOR DISASTER RESPONSE PLAN. 

6 (a) IN GENERAL.—Not later than January 31, 2007, 

7 the Administrator shall— 

8 (1) by rule, amend the 2006 Atlantic hurricane 

9 season disaster response plan of the Administration 

10 (in this section referred to as the ‘‘disaster response 

11 plan’’) to apply to major disasters and catastrophic 

12 national disasters, consistent with this Act and the 

13 amendments made by this Act; and 

14 (2) submit a report to the Committee on Small 

15 Business and Entrepreneurship of the Senate and 

16 the Committee on Small Business of the House of 

17 Representatives detailing the amendments to the dis18 aster response plan. 

19 (b) CONTENTS.—The amended report required under 

20 subsection (a)(2) shall include— 

21 (1) any updates or modifications made to the 

22 disaster response plan since the report regarding the 

23 disaster response plan submitted on July 14, 2006; 

24 (2) a description of how the Administrator 

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1 sonnel of the Administration in the response to a 

2 major disaster, including information on the utiliza3 tion of personnel for loan processing and loan dis4 bursement; 

5 (3) a description of the disaster scalability 

6 model of the Administration and on what basis or 

7 function the plan is scaled; 

8 (4) a description of how the agency-wide Dis9 aster Oversight Council is structured, which offices 

10 comprise its membership, and whether the Associate 

11 Deputy Administrator for Entrepreneurial Develop12 ment of the Administration is a member; 

13 (5) a description of how the Administrator 

14 plans to coordinate the disaster efforts of the Ad15 ministration with State and local government offi16 cials, including recommendations on how to better 

17 incorporate State initiatives or programs, such as 

18 State-administered bridge loan programs, into the 

19 disaster response of the Administration; 

20 (6) recommendations, if any, on how the Ad21 ministrator can better coordinate its disaster re22 sponse operations with the operations of the Depart23 ment of Commerce and the Department of Agri24 culture; 


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1 (7) any surge plans of the Administration for 

2 loan processing and loss verification functions; 

3 (8) a description of the findings and rec4 ommendations of the Administrator, if any, based on 

5 a review of the response of the Administration to 

6 Hurricane Katrina of 2005, Hurricane Rita of 2005, 

7 and Hurricane Wilma of 2005; and 

8 (9) a plan for how the Administrator, in co9 operation with the Director of the Federal Emer10 gency Management Agency, will secure accommoda11 tions and necessary resources for disaster assistance 

12 personnel to effectively perform their responsibilities 

13 in the aftermath of a major disaster. 

14 (c) EXERCISES.—Not later than May 31, 2007, the 

15 Administrator shall develop and execute simulation exer16 cises to demonstrate the effectiveness of the amended dis17 aster response plan required under this section. 

18 SEC. 458. CONGRESSIONAL OVERSIGHT. 

19 (a) MONTHLY ACCOUNTING REPORT TO CON20 GRESS.— 

21 (1) IN GENERAL.—On the first Monday of each 

22 month after the date of enactment of this Act, the 

23 Administrator shall provide to the Committee on 

24 Small Business and Entrepreneurship of the Senate 

25 and to the Committee on Small Business of the 


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1 House of Representatives a report on the disaster 

2 loan program of the Administration for the pre3 ceding month. 

4 (2) CONTENTS.—Each report under paragraph 

5 (1) shall include— 

6 (A) the daily average lending volume, in 

7 number of loans and dollars, and the percent by 

8 which each category has increased or decreased 

9 since the previous report under paragraph (1); 

10 (B) the weekly average lending volume, in 

11 number of loans and dollars, and the percent by 

12 which each category has increased or decreased 

13 since the previous report under paragraph (1); 

14 (C) the amount of funding spent over the 

15 month for loans, both in appropriations and 

16 program level, and the percent by which each 

17 category has increased or decreased since the 

18 previous report under paragraph (1); 

19 (D) the amount of funding available for 

20 loans, both in appropriations and program level, 

21 and the percent by which each category has in22 creased or decreased since the previous report 

23 under paragraph (1), noting the source of any 

24 additional funding; 


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1 (E) an estimate of how long the available 

2 funding for such loans will last, based on the 

3 spending rate; 

4 (F) the amount of funding spent over the 

5 month for staff, along with the number of staff, 

6 and the percent by which each category has in7 creased or decreased since the previous report 

8 under paragraph (1); 

9 (G) the amount of funding spent over the 

10 month for administrative costs, and the percent 

11 by which spending has increased or decreased 

12 since the previous report under paragraph (1); 

13 (H) the amount of funding available for 

14 salaries and expenses combined, and the per15 cent by which funding has increased or de16 creased, noting the source of any additional 

17 funding; and 

18 (I) an estimate of how long the available 

19 funding for salaries and expenses will last, 

20 based on the spending rate. 

21 (b) DAILY DISASTER UPDATES TO CONGRESS FOR

22 PRESIDENTIALLY DECLARED DISASTERS.— 

23 (1) IN GENERAL.—Each day during a disaster 

24 update period, excluding Federal holidays and week25 ends, the Administrator shall provide to the ComVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00119 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 mittee on Small Business and Entrepreneurship of 

2 the Senate and to the Committee on Small Business 

3 of the House of Representatives a report on the op4 eration of the disaster loan program of the Adminis5 tration for the area in which the President declared 

6 a major disaster or a catastrophic national disaster, 

7 as the case may be. 

8 (2) CONTENTS.—Each report under paragraph 

9 (1) shall include— 

10 (A) the allocations of loan processing, loss 

11 verification, and additional field staff at Admin12 istration offices nationwide, as well as the allo13 cations of such staff at the various disaster 

14 field offices, disaster recovery centers, and 

15 workshops in each State in the relevant area; 

16 (B) the daily number of applications re17 ceived from applicants in the relevant area, as 

18 well as a breakdown of such figures by State; 

19 (C) the daily number of applications pend20 ing application entry from applicants in the rel21 evant area, as well as a breakdown of such fig22 ures by State; 

23 (D) the daily number of applications with24 drawn by applicants in the relevant area, as 

25 well as a breakdown of such figures by State; 


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1 (E) the daily number of applications sum2 marily declined by the Administrator from ap3 plicants in the relevant area, as well as a break4 down of such figures by State; 

5 (F) the daily number of applications de6 clined by the Administrator from applicants in 

7 the relevant area, as well as a breakdown of 

8 such figures by State; 

9 (G) the daily number of applications in 

10 process from applicants in the relevant area, as 

11 well as a breakdown of such figures by State; 

12 (H) the daily number of applications ap13 proved by the Administrator from applicants in 

14 the relevant area, as well as a breakdown of 

15 such figures by State; 

16 (I) the daily dollar amount of applications 

17 approved by the Administrator from applicants 

18 in the relevant area, as well as a breakdown of 

19 such figures by State; 

20 (J) the daily amount of loans dispersed, 

21 both partially and fully, by the Administrator to 

22 applicants in the relevant area, as well as a 

23 breakdown of such figures by State; 

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1 evant area, as well as a breakdown of such fig2 ures by State; 

3 (L) the number of applications approved, 

4 including dollar amount approved, as well as 

5 applications partially and fully dispersed, in6 cluding dollar amounts, since the last report 

7 under paragraph (1); and 

8 (M) the declaration date, physical damage 

9 closing date, economic injury closing date, and 

10 number of counties included in the declaration 

11 of a major disaster. 

12 (c) REPORT ON NEED FOR SUPPLEMENTAL

13 FUNDS.—Not later than 3 months before the date on 

14 which the Administrator estimates funding will no longer 

15 be available for the disaster loan program of the Adminis16 tration in any fiscal year, the Administrator shall submit 

17 a report to the Committee on Small Business and Entre18 preneurship of the Senate and to the Committee on Small 

19 Business of the House of Representatives regarding the 

20 need for supplemental funds for such loan program, in21 cluding the amount needed to sustain such loan program 

22 at current funding rates through the end of the fiscal year 

23 in which the Administrator submits such report. 

24 (d) REPORT ON CONTRACTING.— 


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1 (1) IN GENERAL.—Not later than 6 months 

2 after the date on which a declared disaster is de3 clared, and every 6 months thereafter until the date 

4 that is 18 months after the date on which the de5 clared disaster was declared, the Administrator shall 

6 submit a report to the Committee on Small Business 

7 and Entrepreneurship of the Senate and to the Com8 mittee on Small Business of the House of Rep9 resentatives regarding Federal contracts awarded as 

10 a result of the declared disaster. 

11 (2) CONTENTS.—Each report submitted under 

12 paragraph (1) shall include— 

13 (A) the total number of contracts awarded 

14 as a result of the declared disaster; 

15 (B) the total number of contracts awarded 

16 to small business concerns as a result of the de17 clared disaster; 

18 (C) the total number of contracts awarded 

19 to women and minority-owned businesses as a 

20 result of the declared disaster; and 

21 (D) the total number of contracts awarded 

22 to local businesses as a result of the declared 

23 disaster. 


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1 Subtitle D—Energy Emergencies 

2 SEC. 471. FINDINGS. 

3 Congress finds that— 

4 (1) a significant number of small business con5 cerns in the United States, nonfarm as well as agri6 cultural producers, use heating oil, natural gas, pro7 pane, or kerosene to heat their facilities and for 

8 other purposes; 

9 (2) a significant number of small business con10 cerns in the United States sell, distribute, market, 

11 or otherwise engage in commerce directly related to 

12 heating oil, natural gas, propane, and kerosene; and 

13 (3) significant increases in the price of heating 

14 oil, natural gas, propane, or kerosene— 

15 (A) disproportionately harm small business 

16 concerns dependent on those fuels or that use, 

17 sell, or distribute those fuels in the ordinary 

18 course of their business, and can cause them 

19 substantial economic injury; 

20 (B) can negatively affect the national econ21 omy and regional economies; 

22 (C) have occurred in the winters of 1983 

23 to 1984, 1988 to 1989, 1996 to 1997, 1999 to 

24 2000, 2000 to 2001, and 2004 to 2005; and 


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1 (D) can be caused by a host of factors, in2 cluding international conflicts, global or re3 gional supply difficulties, weather conditions, 

4 insufficient inventories, refinery capacity, trans5 portation, and competitive structures in the 

6 markets, causes that are often unforeseeable to, 

7 and beyond the control of, those who own and 

8 operate small business concerns. 

9 SEC. 472. SMALL BUSINESS ENERGY EMERGENCY DISASTER 

10 LOAN PROGRAM. 

11 (a) IN GENERAL.—Section 7(b) of the Small Busi12 ness Act (15 U.S.C. 636(b)) is amended by inserting after 

13 paragraph (9), as added by this Act, the following: 

14 ‘‘(10) ENERGY EMERGENCIES.— 

15 ‘‘(A) DEFINITIONS.—In this paragraph— 

16 ‘‘(i) the term ‘base price index’ means 

17 the moving average of the closing unit 

18 price on the New York Mercantile Ex19 change for heating oil, natural gas, or pro20 pane for the 10 days, in each of the most 

21 recent 2 preceding years, which correspond 

22 to the trading days described in clause (ii); 

23 ‘‘(ii) the term ‘current price index’ 

24 means the moving average of the closing 

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1 change, for the 10 most recent trading 

2 days, for contracts to purchase heating oil, 

3 natural gas, or propane during the subse4 quent calendar month, commonly known as 

5 the ‘front month’; 

6 ‘‘(iii) the term ‘heating fuel’ means 

7 heating oil, natural gas, propane, or ker8 osene; and 

9 ‘‘(iv) the term ‘significant increase’ 

10 means— 

11 ‘‘(I) with respect to the price of 

12 heating oil, natural gas, or propane, 

13 any time the current price index ex14 ceeds the base price index by not less 

15 than 40 percent; and 

16 ‘‘(II) with respect to the price of 

17 kerosene, any increase which the Ad18 ministrator, in consultation with the 

19 Secretary of Energy, determines to be 

20 significant. 

21 ‘‘(B) AUTHORIZATION.—The Administra22 tion may make such loans, either directly or in 

23 cooperation with banks or other lending institu24 tions through agreements to participate on an 

25 immediate or deferred basis, to assist a small 


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1 business concern that has suffered or that is 

2 likely to suffer substantial economic injury as 

3 the result of a significant increase in the price 

4 of heating fuel occurring on or after October 1, 

5 2004. 

6 ‘‘(C) INTEREST RATE.—Any loan or guar7 antee extended under this paragraph shall be 

8 made at the same interest rate as economic in9 jury loans under paragraph (2). 

10 ‘‘(D) MAXIMUM AMOUNT.—No loan may 

11 be made under this paragraph, either directly 

12 or in cooperation with banks or other lending 

13 institutions through agreements to participate 

14 on an immediate or deferred basis, if the total 

15 amount outstanding and committed to the bor16 rower under this subsection would exceed 

17 $1,500,000, unless such borrower constitutes a 

18 major source of employment in its surrounding 

19 area, as determined by the Administrator, in 

20 which case the Administrator, in the discretion 

21 of the Administrator, may waive the $1,500,000 

22 limitation. 

23 ‘‘(E) DECLARATIONS.—For purposes of 

24 assistance under this paragraph— 


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1 ‘‘(i) a declaration of a disaster area 

2 based on conditions specified in this para3 graph shall be required, and shall be made 

4 by the President or the Administrator; or 

5 ‘‘(ii) if no declaration has been made 

6 under clause (i), the Governor of a State 

7 in which a significant increase in the price 

8 of heating fuel has occurred may certify to 

9 the Administration that small business 

10 concerns have suffered economic injury as 

11 a result of such increase and are in need 

12 of financial assistance which is not other13 wise available on reasonable terms in that 

14 State, and upon receipt of such certifi15 cation, the Administration may make such 

16 loans as would have been available under 

17 this paragraph if a disaster declaration 

18 had been issued. 

19 ‘‘(F) USE OF FUNDS.—Notwithstanding 

20 any other provision of law, loans made under 

21 this paragraph may be used by a small business 

22 concern described in subparagraph (B) to con23 vert from the use of heating fuel to a renewable 

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1 generation, solar energy, wind energy, or fuel 

2 cells.’’. 

3 (b) CONFORMING AMENDMENTS RELATING TO

4 HEATING FUEL.—Section 3(k) of the Small Business Act 

5 (15 U.S.C. 632(k)) is amended— 

6 (1) by inserting ‘‘, significant increase in the 

7 price of heating fuel’’ after ‘‘civil disorders’’; and 

8 (2) by inserting ‘‘other’’ before ‘‘economic’’. 

9 (c) EFFECTIVE PERIOD.—The amendments made by 

10 this section shall apply during the 4-year period beginning 

11 on the date on which guidelines are published by the Ad12 ministrator under section 474. 

13 SEC. 473. AGRICULTURAL PRODUCER EMERGENCY LOANS. 

14 (a) IN GENERAL.—Section 321(a) of the Consoli15 dated Farm and Rural Development Act (7 U.S.C. 

16 1961(a)) is amended— 

17 (1) in the first sentence— 

18 (A) by striking ‘‘operations have’’ and in19 serting ‘‘operations (i) have’’; and 

20 (B) by inserting before ‘‘: Provided,’’ the 

21 following: ‘‘, or (ii)(I) are owned or operated by 

22 such an applicant that is also a small business 

23 concern (as defined in section 3 of the Small 

24 Business Act (15 U.S.C. 632)), and (II) have 

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1 nomic injury on or after October 1, 2004, as 

2 the result of a significant increase in energy 

3 costs or input costs from energy sources occur4 ring on or after October 1, 2004, in connection 

5 with an energy emergency declared by the 

6 President or the Secretary’’; 

7 (2) in the third sentence, by inserting before 

8 the period at the end the following: ‘‘or by an energy 

9 emergency declared by the President or the Sec10 retary’’; and 

11 (3) in the fourth sentence— 

12 (A) by inserting ‘‘or energy emergency’’ 

13 after ‘‘natural disaster’’ each place that term 

14 appears; and 

15 (B) by inserting ‘‘or declaration’’ after 

16 ‘‘emergency designation’’. 

17 (b) FUNDING.—Funds available on the date of enact18 ment of this Act for emergency loans under subtitle C of 

19 the Consolidated Farm and Rural Development Act (7 

20 U.S.C. 1961 et seq.) shall be available to carry out the 

21 amendments made by subsection (a) to meet the needs re22 sulting from energy emergencies. 

23 (c) EFFECTIVE PERIOD.—The amendments made by 

24 this section shall apply during the 4-year period beginning 


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1 on the date on which guidelines are published by the Sec2 retary of Agriculture under section 474. 

3 SEC. 474. GUIDELINES AND RULEMAKING. 

4 (a) GUIDELINES.—Not later than 30 days after the 

5 date of enactment of this Act, the Administrator and the 

6 Secretary of Agriculture shall each issue such guidelines 

7 as the Administrator or the Secretary, as applicable, de8 termines to be necessary to carry out this subtitle and the 

9 amendments made by this subtitle. 

10 (b) RULEMAKING.—Not later than 30 days after the 

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

12 consultation with the Secretary of Energy, shall promul13 gate regulations specifying the method for determining a 

14 significant increase in the price of kerosene under section 

15 7(b)(10)(A)(iv)(II) of the Small Business Act, as added 

16 by this Act. 

17 SEC. 475. REPORTS. 

18 (a) SMALL BUSINESS ADMINISTRATION.—Not later 

19 than 12 months after the date on which the Administrator 

20 issues guidelines under section 474, and annually there21 after until the date that is 12 months after the end of 

22 the effective period of section 7(b)(10) of the Small Busi23 ness Act, as added by this Act, the Administrator shall 

24 submit to the Committee on Small Business and Entrepre25 neurship of the Senate and the Committee on Small BusiVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00131 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 ness of the House of Representatives, a report on the ef2 fectiveness of the assistance made available under section 

3 7(b)(10) of the Small Business Act, as added by this Act, 

4 including— 

5 (1) the number of small business concerns that 

6 applied for a loan under such section and the num7 ber of those that received such loans; 

8 (2) the dollar value of those loans; 

9 (3) the States in which the small business con10 cerns that received such loans are located; 

11 (4) the type of heating fuel or energy that 

12 caused the significant increase in the cost for the 

13 participating small business concerns; and 

14 (5) recommendations for ways to improve the 

15 assistance provided under such section 7(b)(10), if 

16 any. 

17 (b) DEPARTMENT OF AGRICULTURE.—Not later than 

18 12 months after the date on which the Secretary of Agri19 culture issues guidelines under section 474, and annually 

20 thereafter until the date that is 12 months after the end 

21 of the effective period of the amendments made to section 

22 321(a) of the Consolidated Farm and Rural Development 

23 Act (7 U.S.C. 1961(a)) by this subtitle, the Secretary shall 

24 submit to the Committee on Small Business and Entrepre25 neurship and the Committee on Agriculture, Nutrition, 


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1 and Forestry of the Senate and the Committee on Small 

2 Business and the Committee on Agriculture of the House 

3 of Representatives, a report that— 

4 (1) describes the effectiveness of the assistance 

5 made available under section 321(a) of the Consoli6 dated Farm and Rural Development Act (7 U.S.C. 

7 1961(a)); and 

8 (2) contains recommendations for ways to im9 prove the assistance provided under such section 

10 321(a), if any. 

11 TITLE V—VETERANS AND MEM12 BERS OF THE GUARD AND RE13 SERVE 

14 SEC. 501. DEFINITIONS. 

15 In this title— 

16 (1) the terms ‘‘active duty’’ and ‘‘military de17 partment’’ have the meaning given the terms in sec18 tion 101 of title 10, United States Code; 

19 (2) the term ‘‘member of the Guard or Re20 serve’’ means a member of a reserve component of 

21 the Armed Forces, as defined in section 10101 of 

22 title 10, United States Code; 

23 (3) the term ‘‘Secretary’’ means the Secretary 

24 of Defense; and 


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1 (4) the term ‘‘veteran’’ has the same meaning 

2 as in section 101(2) of title 38, United States Code. 

3 Subtitle A—Veterans 

4 SEC. 521. FINDINGS. 

5 Congress finds the following: 

6 (1) From September 2001 through November 

7 2004, approximately 410,000 members of the Guard 

8 or Reserve, have been mobilized in support of United 

9 States military operations. 

10 (2) According to 2004 data from the Manpower 

11 Data Center of the Department of Defense, an esti12 mated 35 percent of members of the Guard or Re13 serve are either self-employed or own or are em14 ployed by a small business concern. 

15 (3) The majority of privately employed mem16 bers of the Guard or Reserve either work for a small 

17 business concern or are self-employed. 

18 (4) As a result of activations, many small busi19 ness concerns have been forced to go without their 

20 owners and key personnel for months, and some21 times years, on end. 

22 (5) The effects have been devastating to such 

23 patriotic small business concerns. 

24 (6) The Office of Veterans Business Develop25 ment of the Administration has made a concerted efVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 fort to reach out to small business concerns affected 

2 by deployments, but given the sheer numbers of 

3 those deployed, their resources have been stretched 

4 thin. 

5 (7) In addition, the Office of Veterans Business 

6 Development has been required to broaden its deliv7 ery of services, as directed by Executive Order 

8 13360, to provide procurement training programs 

9 for service-disabled veterans. 

10 (8) The purpose of this subtitle is to stem the 

11 effects of deployments of members of the Guard or 

12 Reserve on small business concerns, and better as13 sist veterans and service-disabled veterans with their 

14 business needs. 

15 SEC. 522. INCREASED FUNDING FOR THE OFFICE OF VET16 ERANS BUSINESS DEVELOPMENT. 

17 There is authorized to be appropriated to the Office 

18 of Veterans Business Development of the Administration, 

19 and to remain available until expended— 

20 (1) $2,000,000 for fiscal year 2007; 

21 (2) $2,100,000 for fiscal year 2008; and 

22 (3) $2,200,000 for fiscal year 2009. 


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1 SEC. 523. EXTENSION OF ADVISORY COMMITTEE ON VET2 ERANS BUSINESS AFFAIRS. 

3 Section 203(h) of the Veterans Entrepreneurship and 

4 Small Business Development Act of 1999 (15 U.S.C. 657b 

5 note) is amended by striking ‘‘September 30, 2006’’ and 

6 inserting ‘‘September 30, 2009’’. 

7 SEC. 524. RELIEF FROM TIME LIMITATIONS FOR VETERAN8 OWNED SMALL BUSINESSES. 

9 Section 3(q) of the Small Business Act (15 U.S.C. 

10 632(q)) is amended by adding at the end the following: 

11 ‘‘(5) RELIEF FROM TIME LIMITATIONS.— 

12 ‘‘(A) IN GENERAL.—Any time limitation 

13 on any qualification, certification, or period of 

14 participation imposed under this Act on any 

15 program available to small business concerns 

16 shall be extended for a small business concern 

17 that— 

18 ‘‘(i) is owned and controlled by— 

19 ‘‘(I) a veteran who was called or 

20 ordered to active duty under a provi21 sion of law specified in section 

22 101(a)(13)(B) of title 10, United 

23 States, on or after September 11, 

24 2001; or 

25 ‘‘(II) a service-disabled veteran 

26 who became such a veteran due to an 


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1 injury or illness incurred or aggra2 vated in the active military, naval, or 

3 air service during a period of active 

4 duty under a call or order to active 

5 duty under a provision of law referred 

6 to in subclause (I) on or after Sep7 tember 11, 2001; and 

8 ‘‘(ii) was subject to the time limitation 

9 during such period of active duty. 

10 ‘‘(B) DURATION.—Upon submission of 

11 proper documentation to the Administrator, the 

12 extension of a time limitation under subpara13 graph (A) shall be equal to the period of time 

14 that such veteran who owned or controlled such 

15 a concern was on active duty as described in 

16 that subparagraph.’’. 

17 Subtitle B—Guard and Reserve 

18 SEC. 541. GUARD AND RESERVE LOANS. 

19 (a) IN GENERAL.—Section 7(b)(3) of the Small Busi20 ness Act (15 U.S.C. 636(b)(3)) is amended— 

21 (1) in subparagraph (E), by striking 

22 ‘‘$1,500,000’’ each place such term appears and in23 serting ‘‘$2,000,000’’; and 

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


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1 ‘‘(G) Notwithstanding any other provision 

2 of law, a loan not greater than $25,000 may be 

3 made under this paragraph without collateral. 

4 ‘‘(H) The Administrator shall give priority 

5 to any application for a loan under this para6 graph, and shall process and make a determina7 tion regarding such applications prior to proc8 essing or making a determination on other loan 

9 applications under this subsection, on a rolling 

10 basis.’’. 

11 (b) LOAN INFORMATION.— 

12 (1) IN GENERAL.—The Administrator and the 

13 Secretary shall develop a joint website and printed 

14 materials providing information regarding the pro15 gram under section 7(b)(3) of the Small Business 

16 Act. 

17 (2) MARKETING.—The Administrator is author18 ized— 

19 (A) to advertise and promote the program 

20 under section 7(b)(3) of the Small Business Act 

21 jointly with the Secretary and veteran’s service 

22 organizations; and 

23 (B) to advertise and promote participation 

24 by lenders in such program jointly with trade 


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1 associations for banks or other lending institu2 tions. 

3 SEC. 542. STUDY OF INSURANCE PROGRAM FOR MEMBERS 

4 OF THE GUARD AND RESERVE. 

5 (a) IN GENERAL.—The Administrator and the Sec6 retary shall jointly conduct a study of the feasibility of— 

7 (1) creating a business mobilization and inter8 ruption insurance program for members of the 

9 Guard or Reserve who own or operate small business 

10 concerns; 

11 (2) creating an insurance program to repay 

12 debts to the Administrator in the event of the death 

13 or significant injury of a member of the Guard or 

14 Reserve who is on active duty; and 

15 (3) increasing the use of credit unions affiliated 

16 with the Department of Defense in programs admin17 istered by the Administrator. 

18 (b) REPORT.—Not later than 6 months after the date 

19 of enactment of this Act, the Administrator and the Sec20 retary shall submit a joint report to the Committee on 

21 Small Business and Entrepreneurship of the Senate and 

22 the Committee on Small Business of the House of Rep23 resentatives regarding the study conducted under sub24 section (a). 


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1 SEC. 543. GRANT ASSISTANCE FOR MILITARY RESERVISTS’

2 SMALL BUSINESS CONCERNS. 

3 (a) AUTHORIZATION OF GRANTS.—Section 

4 7(b)(3)(B) of the Small Business Act (15 U.S.C. 

5 636(b)(3)(B)) is amended by inserting ‘‘or grants’’ after 

6 ‘‘or deferred basis)’’. 

7 (b) GRANT SPECIFICATIONS.—Section 7(b)(3) of the 

8 Small Business Act (15 U.S.C. 636(b)(3)), as amended 

9 by this Act, is amended by adding at the end the following: 

10 ‘‘(I) Grants made under subparagraph 

11 (B)— 

12 ‘‘(i) may be awarded in addition to 

13 any loan made under subparagraph (B); 

14 ‘‘(ii) shall not exceed $25,000; and 

15 ‘‘(iii) shall be made only to a small 

16 business concern— 

17 ‘‘(I) that provides a business plan 

18 demonstrating viability for not less 

19 than 3 future years; 

20 ‘‘(II) with 10 or fewer employees; 

21 ‘‘(III) that has not received an22 other grant under subparagraph (B) 

23 in the previous 2 years.’’. 

24 (c) AUTHORIZATION OF APPROPRIATIONS.—Section 

25 20(e)(2) of the Small Business Act (15 U.S.C. 631 note), 


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1 as amended by this Act, is amended by inserting after sub2 paragraph (B) the following: 

3 ‘‘(C) GRANT ASSISTANCE FOR MILITARY

4 RESERVISTS’ SMALL BUSINESSES.—There are 

5 authorized to be appropriated for grants under 

6 section 7(b)(3)(B) for each of fiscal years 2007 

7 through 2009.’’. 

8 Subtitle C—Veterans Corporation 

9 SEC. 561. PURPOSES OF THE CORPORATION. 

10 (a) PURPOSES.—Section 33(b) of the Small Business 

11 Act (15 U.S.C. 657c(b)) is amended— 

12 (1) by striking paragraph (1) and inserting the 

13 following: 

14 ‘‘(1) to establish and maintain a national net15 work of information and assistance centers for use 

16 by veterans and the public, by— 

17 ‘‘(A) providing information regarding small 

18 business oriented employment or development 

19 programs; 

20 ‘‘(B) providing access to studies and re21 search concerning the management, financing, 

22 and operation of small business enterprises, 

23 small business participation in international 

24 markets, export promotion, and technology 

25 transfer; 


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1 ‘‘(C) providing referrals to business ana2 lysts who can provide direct counseling to vet3 eran small business concern owners regarding 

4 the subjects described in this section; 

5 ‘‘(D) serving as an information clearing6 house for business development and entrepre7 neurial assistance materials, as well as other 

8 veteran assistance materials, as determined nec9 essary, that are provided by Federal, State and 

10 local governments; and 

11 ‘‘(E) providing assistance to veterans and 

12 service-disabled veterans in efforts to gain ac13 cess to Federal prime contracts and sub14 contracts; and’’; and 

15 (2) in paragraph (2), by striking ‘‘including 

16 service-disabled veterans’’ and inserting ‘‘particu17 larly service-disabled veterans’’. 

18 SEC. 562. MANAGEMENT OF THE CORPORATION. 

19 (a) APPOINTMENTS TO THE BOARD.—Section 

20 33(c)(2) of the Small Business Act (15 U.S.C. 657c(c)(2)) 

21 is amended to read as follows: 

22 ‘‘(2) APPOINTMENT OF VOTING MEMBERS.— 

23 ‘‘(A) IN GENERAL.—The President shall, 

24 after considering recommendations proposed 

25 under subparagraph (B), appoint the 9 voting 


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1 members of the Board, all of whom shall be 

2 United States citizens, and not more than 5 of 

3 whom shall be members of the same political 

4 party. 

5 ‘‘(B) RECOMMENDATIONS.—Recommenda6 tions shall be submitted to the President for ap7 pointments under this paragraph by the chair8 man or ranking member of the Committee on 

9 Small Business and Entrepreneurship or the 

10 Committee on Veterans Affairs of the Senate or 

11 the Committee on Small Business or the Com12 mittee on Veterans Affairs of the House of 

13 Representatives. 

14 ‘‘(C) CONSULTATION WITH VETERAN OR15 GANIZATIONS.—Recommendations under sub16 paragraph (B) shall be made after consultation 

17 with such veteran service organizations as are 

18 determined appropriate by the member of Con19 gress making the recommendation. 

20 ‘‘(D) CONSIDERATIONS.—Consideration for 

21 eligibility for membership on the Board shall in22 clude business experience, knowledge of vet23 erans’ issues, and ability to raise funds for the 

24 Corporation. 


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1 ‘‘(E) LIMITATION ON INTERNAL REC2 OMMENDATIONS.—No member of the Board 

3 may recommend an individual for appointment 

4 to another position on the Board.’’. 

5 (b) TERMS.—Section 33(c)(6) of the Small Business 

6 Act (15 U.S.C. 657c(c)(6)) is amended to read as follows: 

7 ‘‘(6) TERMS OF APPOINTED MEMBERS.— 

8 ‘‘(A) IN GENERAL.—Each member of the 

9 Board of Directors appointed under paragraph 

10 (2) shall serve for a term of 4 years. 

11 ‘‘(B) UNEXPIRED TERMS.—Any member of 

12 the Board of Directors appointed to fill a va13 cancy occurring before the expiration of the 

14 term for which the member’s predecessor was 

15 appointed shall be appointed only for the re16 mainder of the term. A member of the Board 

17 of Directors may not serve beyond the expira18 tion of the term for which the member is ap19 pointed.’’. 

20 (c) REMOVAL OF BOARD MEMBERS.—Section 33(c) 

21 of the Small Business Act (15 U.S.C. 657c(c)) is amended 

22 by adding at the end the following: 

23 ‘‘(12) REMOVAL OF MEMBERS.—With the ap24 proval of a majority of the Board of Directors and 

25 the approval of the chairmen and ranking members 


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1 of the Committee on Small Business and Entrepre2 neurship and the Committee on Veterans Affairs of 

3 the Senate, the Corporation may remove a member 

4 of the Board of Directors that is deemed unable to 

5 fulfill his or her duties, as established under this 

6 section.’’. 

7 SEC. 563. TIMING OF TRANSFER OF ADVISORY COMMITTEE 

8 DUTIES. 

9 Section 33(h) of the Small Business Act (15 U.S.C. 

10 657c(h)) is amended by striking ‘‘October 1, 2006’’ and 

11 inserting ‘‘October 1, 2009’’. 

12 SEC. 564. AUTHORIZATION OF APPROPRIATIONS. 

13 Section 33(k) of the Small Business Act (15 U.S.C. 

14 657c(k)(1)) is amended— 

15 (1) in paragraph (1)— 

16 (A) by inserting ‘‘, through the Office of 

17 Veteran’s Business Development of the Admin18 istration,’’ after ‘‘to the Corporation’’; and 

19 (B) by striking subparagraphs (A) through 

20 (D) and inserting the following: 

21 ‘‘(A) $2,000,000 for fiscal year 2007; 

22 ‘‘(B) $2,000,000 for fiscal year 2008; and 

23 ‘‘(C) $2,000,000 for fiscal year 2009.’’; 

24 (2) by striking paragraph (2) and inserting the 

25 following: 


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1 ‘‘(2) MATCHING REQUIREMENTS.— 

2 ‘‘(A) IN GENERAL.—The Administration 

3 shall require, as a condition of any grant (or 

4 amendment or modification thereto) made to 

5 the Corporation under this section, that a 

6 matching amount (excluding any fees collected 

7 from recipients of such assistance) equal to the 

8 amount of such grant be provided from sources 

9 other than the Federal Government. 

10 ‘‘(B) LIMITATION.—Not more than 33 per11 cent of the total revenue of the Corporation, in12 cluding the funds raised for use at the Vet13 eran’s Business Resource Centers, may be ac14 quired from fee-for-service tools or direct 

15 charge to the veteran receiving services, as de16 scribed in this section, except that the amount 

17 of any such fee or charge may not exceed the 

18 amount of such fee or charge in effect on the 

19 date of enactment of the Small Business Reau20 thorization and Improvements Act of 2006. 

21 ‘‘(C) MISSION-RELATED LIMITATION.—The 

22 Corporation may not engage in revenue pro23 ducing programs, services, or related business 

24 ventures that are not intended to carry out the 

25 mission and activities described in section (b). 


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1 ‘‘(D) RETURN TO TREASURY.—Funds ap2 propriated under this section that have not been 

3 expended at the end of the fiscal year for which 

4 they were appropriated shall revert back to the 

5 Treasury.’’; and 

6 (3) by striking paragraph (3). 

7 SEC. 565. PRIVATIZATION. 

8 Section 33 of the Small Business Act (15 U.S.C. 

9 657c) is amended— 

10 (1) by striking subsections (f) and (i); and 

11 (2) by redesignating subsections (g), (h), (j), 

12 and (k) as subsections (f) through (i), respectively; 

13 and 

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

15 ‘‘(j) PRIVATIZATION.— 

16 ‘‘(1) DEVELOPMENT OF PLAN.—Not later than 

17 6 months after the date of enactment of the Small 

18 Business Reauthorization and Improvements Act of 

19 2006, the Corporation shall develop, institute, and 

20 implement a plan to raise private funds and become 

21 a self-sustaining corporation. 

22 ‘‘(2) GAO AUDIT AND REPORT.— 

23 ‘‘(A) AUDIT.—The Comptroller General of 

24 the United States shall conduct an audit of the 

25 Corporation, in accordance with generally acVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 cepted accounting principles and generally ac2 cepted audit standards. 

3 ‘‘(B) INCLUSIONS.—The audit required by 

4 this paragraph shall include— 

5 ‘‘(i) an evaluation of the efficacy of 

6 the Corporation in carrying out the pur7 poses under section (b); and 

8 ‘‘(ii) an analysis of the feasibility of 

9 the sustainability plan developed by the 

10 Corporation. 

11 ‘‘(C) REPORT.—Not later than 1 year 

12 after the date of enactment of the Small Busi13 ness Reauthorization and Improvements Act of 

14 2006, the Comptroller General shall submit a 

15 report on the audit conducted under this para16 graph to the Committee on Small Business and 

17 Entrepreneurship and the Committee on Vet18 erans Affairs of the Senate and to the Com19 mittee on Small Business and the Committee 

20 on Veterans Affairs of the House of Represent21 atives.’’. 


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1 TITLE VI—ENERGY LOANS FOR 

2 SMALL BUSINESS CONCERNS 

3 SEC. 601. EXPRESS LOANS FOR RENEWABLE ENERGY AND 

4 ENERGY EFFICIENCY. 

5 Section 7(a)(31) of the Small Business Act (15 

6 U.S.C. 636(a)(31)) is amended by adding at the end the 

7 following: 

8 ‘‘(F) EXPRESS LOANS FOR RENEWABLE

9 ENERGY AND ENERGY EFFICIENCY.— 

10 ‘‘(i) DEFINITIONS.—In this subpara11 graph— 

12 ‘‘(I) the term ‘biomass’— 

13 ‘‘(aa) means any organic 

14 material that is available on a re15 newable or recurring basis, in16 cluding— 

17 ‘‘(AA) agricultural 

18 crops; 

19 ‘‘(BB) trees grown for 

20 energy production; 

21 ‘‘(CC) wood waste and 

22 wood residues; 

23 ‘‘(DD) plants (includ24 ing aquatic plants and 

25 grasses); 


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1 ‘‘(EE) residues; 

2 ‘‘(FF) fibers; 

3 ‘‘(GG) animal wastes 

4 and other waste materials; 

5 and 

6 ‘‘(HH) fats, oils, and 

7 greases (including recycled 

8 fats, oils, and greases); and 

9 ‘‘(bb) does not include— 

10 ‘‘(AA) paper that is 

11 commonly recycled; or 

12 ‘‘(BB) unsegregated 

13 solid waste; 

14 ‘‘(II) the term ‘energy efficiency 

15 project’ means the installation or up16 grading of equipment that results in a 

17 significant reduction in energy usage; 

18 and 

19 ‘‘(III) the term ‘renewable energy 

20 system’ means a system of energy de21 rived from— 

22 ‘‘(aa) a wind, solar, biomass, 

23 or geothermal source; or 


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1 ‘‘(bb) hydrogen derived from 

2 biomass or water using an energy 

3 source described in item (aa). 

4 ‘‘(ii) LOANS.—Loans may be made 

5 under the ‘Express Loan Program’ for the 

6 purpose of— 

7 ‘‘(I) purchasing a renewable en8 ergy system; or 

9 ‘‘(II) an energy efficiency project 

10 for an existing business.’’. 

11 TITLE VII—HEALTH INSURANCE 

12 SEC. 701. PURPOSE. 

13 The purpose of this title is to establish a 4-year pilot 

14 program to provide information and educational materials 

15 to small business concerns regarding health insurance op16 tions, including coverage options within the small group 

17 market. 

18 SEC. 702. DEFINITIONS. 

19 In this title: 

20 (1) ASSOCIATION.—The term ‘‘association’’ 

21 means an association established under section 

22 21(a)(3)(A) of the Small Business Act (15 U.S.C. 

23 648(a)(3)(A)) representing a majority of small busi24 ness development centers. 


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1 (2) PARTICIPATING SMALL BUSINESS DEVELOP2 MENT CENTER.—The term ‘‘participating small 

3 business development center’’ means a small busi4 ness development center described in section 21 of 

5 the Small Business Act (15 U.S.C. 648) that— 

6 (A) is certified under section 21(k)(2) of 

7 the Small Business Act (15 U.S.C. 648(k)(2)); 

8 and 

9 (B) receives a grant under the pilot pro10 gram. 

11 (3) PILOT PROGRAM.—The term ‘‘pilot pro12 gram’’ means the small business health insurance in13 formation pilot program established under this title. 

14 (4) STATE.—The term ‘‘State’’ means each of 

15 the several States of the United States, the District 

16 of Columbia, the Commonwealth of Puerto Rico, the 

17 Virgin Islands, American Samoa, and Guam. 

18 SEC. 703. SMALL BUSINESS HEALTH INSURANCE INFORMA19 TION PILOT PROGRAM. 

20 (a) AUTHORITY.—The Administrator shall establish 

21 a pilot program to make grants to small business develop22 ment centers to provide neutral and objective information 

23 and educational materials regarding health insurance op24 tions, including coverage options within the small group 

25 market, to small business concerns. 


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1 (b) APPLICATIONS.— 

2 (1) POSTING OF INFORMATION.—Not later than 

3 90 days after the date of enactment of this Act, the 

4 Administrator shall post on the website of the Ad5 ministration and publish in the Federal Register a 

6 guidance document describing— 

7 (A) the requirements of an application for 

8 a grant under the pilot program; and 

9 (B) the types of informational and edu10 cational materials regarding health insurance 

11 options to be created under the pilot program, 

12 including by referencing materials and re13 sources developed by the National Association 

14 of Insurance Commissioners, the Kaiser Family 

15 Foundation, and the Healthcare Leadership 

16 Council. 

17 (2) SUBMISSION.—A small business develop18 ment center desiring a grant under the pilot pro19 gram shall submit an application at such time, in 

20 such manner, and accompanied by such information 

21 as the Administrator may reasonably require. 

22 (c) SELECTION OF PARTICIPATING SMALL BUSINESS

23 DEVELOPMENT CENTERS.— 


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1 (1) IN GENERAL.—The Administrator shall se2 lect not more than 20 small business development 

3 centers to receive a grant under the pilot program. 

4 (2) SELECTION OF PROGRAMS.—In selecting 

5 small business development centers under paragraph 

6 (1), the Administrator may not select— 

7 (A) more than 2 programs from each of 

8 the groups of States described in paragraph 

9 (3); and 

10 (B) more than 1 program in any State. 

11 (3) GROUPINGS.—The groups of States de12 scribed in this paragraph are the following: 

13 (A) GROUP 1.—Group 1 shall consist of 

14 Maine, Massachusetts, New Hampshire, Con15 necticut, Vermont, and Rhode Island. 

16 (B) GROUP 2.—Group 2 shall consist of 

17 New York, New Jersey, Puerto Rico, and the 

18 Virgin Islands. 

19 (C) GROUP 3.—Group 3 shall consist of 

20 Pennsylvania, Maryland, West Virginia, Vir21 ginia, the District of Columbia, and Delaware. 

22 (D) GROUP 4.—Group 4 shall consist of 

23 Georgia, Alabama, North Carolina, South Caro24 lina, Mississippi, Florida, Kentucky, and Ten25 nessee. 


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1 (E) GROUP 5.—Group 5 shall consist of Il2 linois, Ohio, Michigan, Indiana, Wisconsin, and 

3 Minnesota. 

4 (F) GROUP 6.—Group 6 shall consist of 

5 Texas, New Mexico, Arkansas, Oklahoma, and 

6 Louisiana. 

7 (G) GROUP 7.—Group 7 shall consist of 

8 Missouri, Iowa, Nebraska, and Kansas. 

9 (H) GROUP 8.—Group 8 shall consist of 

10 Colorado, Wyoming, North Dakota, South Da11 kota, Montana, and Utah. 

12 (I) GROUP 9.—Group 9 shall consist of 

13 California, Guam, American Samoa, Hawaii, 

14 Nevada, and Arizona. 

15 (J) GROUP 10.—Group 10 shall consist of 

16 Washington, Alaska, Idaho, and Oregon. 

17 (4) DEADLINE FOR SELECTION.—The Adminis18 trator shall make selections under this subsection 

19 not later than 6 months after the later of the date 

20 on which the information described in subsection 

21 (b)(1) is posted on the website of the Administration 

22 and the date on which the information described in 

23 subsection (b)(1) is published in the Federal Reg24 ister. 

25 (d) USE OF FUNDS.— 


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1 (1) IN GENERAL.—A participating small busi2 ness development center shall use funds provided 

3 under the pilot program to— 

4 (A) create and distribute informational 

5 materials; and 

6 (B) conduct training and educational ac7 tivities. 

8 (2) CONTENT OF MATERIALS.— 

9 (A) IN GENERAL.—In creating materials 

10 under the pilot program, a participating small 

11 business development center shall evaluate and 

12 incorporate relevant portions of existing infor13 mational materials regarding health insurance 

14 options, including materials and resources de15 veloped by the National Association of Insur16 ance Commissioners, the Kaiser Family Foun17 dation, and the Healthcare Leadership Council. 

18 (B) HEALTH INSURANCE OPTIONS.—In in19 corporating information regarding health insur20 ance options under subparagraph (A), a partici21 pating small business development center shall 

22 provide neutral and objective information re23 garding health insurance options in the geo24 graphic area served by the participating small 

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1 tional employer sponsored health insurance for 

2 the individual and group insurance markets, 

3 such as the health insurance options defined in 

4 section 2791 of the Public Health Services Act 

5 (42 U.S.C. 300gg–91) or section 125 or 223(d) 

6 of the Internal Revenue Code of 1986, and 

7 Federal and State health insurance programs. 

8 (e) GRANT AMOUNTS.—Each participating small 

9 business development center program shall receive a grant 

10 in an amount equal to— 

11 (1) not less than $150,000 per fiscal year; and 

12 (2) not more than $300,000 per fiscal year. 

13 (f) MATCHING REQUIREMENT.—Subparagraphs (A) 

14 and (B) of section 21(a)(4) of the Small Business Act (15 

15 U.S.C. 648(a)(4)) shall apply to assistance made available 

16 under the pilot program. 

17 SEC. 704. REPORTS. 

18 Each participating small business development center 

19 shall transmit to the Administrator and the Chief Counsel 

20 for Advocacy of the Administration, as the Administrator 

21 may direct, a quarterly report that includes— 

22 (1) a summary of the information and edu23 cational materials regarding health insurance op24 tions provided by the participating small business 

25 development center under the pilot program; and 


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1 (2) the number of small business concerns as2 sisted under the pilot program. 

3 SEC. 705. AUTHORIZATION OF APPROPRIATIONS. 

4 (a) IN GENERAL.—There are authorized to be appro5 priated to carry out this title— 

6 (1) $5,000,000 for the first fiscal year begin7 ning after the date of enactment of this Act; and 

8 (2) $5,000,000 for each of the 3 fiscal years 

9 following the fiscal year described in paragraph (1). 

10 (b) LIMITATION ON USE OF OTHER FUNDS.—The 

11 Administrator may carry out the pilot program only with 

12 amounts appropriated in advance specifically to carry out 

13 this title. 

14 TITLE VIII—WOMEN’S SMALL 

15 BUSINESS OWNERSHIP PRO16 GRAMS 

17 SEC. 801. OFFICE OF WOMEN’S BUSINESS OWNERSHIP. 

18 Section 29(g) of the Small Business Act (15 U.S.C. 

19 656(g)) is amended— 

20 (1) in paragraph (2)— 

21 (A) in subparagraph (B)(i), by striking ‘‘in 

22 the areas’’ and all that follows through the end 

23 of subclause (I), and inserting the following: ‘‘to 

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1 tail and product sales, international trade, and 

2 other disciplines required for— 

3 ‘‘(I) starting, operating, and 

4 growing a small business concern;’’; 

5 and 

6 (B) in subparagraph (C), by inserting be7 fore the period at the end the following: ‘‘, the 

8 National Women’s Business Council, and any 

9 association of women’s business centers’’; and 

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

11 ‘‘(3) PROGRAMS AND SERVICES FOR WOMEN12 OWNED SMALL BUSINESSES.—The Assistant Admin13 istrator, in consultation with the National Women’s 

14 Business Council, the Interagency Committee on 

15 Women’s Business Enterprise, and 1 or more asso16 ciations of women’s business centers, shall develop 

17 programs and services for women-owned businesses 

18 (as defined in section 408 of the Women’s Business 

19 Ownership Act of 1988 (15 U.S.C. 631 note)) in 

20 business areas, which may include— 

21 ‘‘(A) manufacturing; 

22 ‘‘(B) technology; 

23 ‘‘(C) professional services; 

24 ‘‘(D) retail and product sales; 

25 ‘‘(E) travel and tourism; 


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1 ‘‘(F) international trade; and 

2 ‘‘(G) Federal Government contract busi3 ness development. 

4 ‘‘(4) TRAINING.—The Administrator shall pro5 vide annual programmatic and financial oversight 

6 training for women’s business ownership representa7 tives and district office technical representatives of 

8 the Administration to enable representatives to carry 

9 out their responsibilities under this section. 

10 ‘‘(5) GRANT PROGRAM IMPROVEMENT.—The 

11 Administrator shall improve the women’s business 

12 center grant proposal process and the programmatic 

13 and financial oversight process by— 

14 ‘‘(A) providing notice to the public of each 

15 women’s business center grant announcement 

16 for an initial and renewal grant, not later than 

17 6 months before awarding such grant; 

18 ‘‘(B) providing notice to grant applicants 

19 and recipients of program evaluation criteria, 

20 not later than 12 months before any such eval21 uation; 

22 ‘‘(C) reducing paperwork and reporting re23 quirements for grant applicants and recipients; 

24 ‘‘(D) standardizing the oversight and re25 view process of the Administration; and 


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1 ‘‘(E) providing to each women’s business 

2 center, not later than 30 days after the comple3 tion of a site visit at that center, a copy of site 

4 visit reports and evaluation reports prepared by 

5 district office technical representatives or Ad6 ministration officials.’’. 

7 SEC. 802. WOMEN’S BUSINESS CENTER PROGRAM. 

8 (a) WOMEN’S BUSINESS CENTER GRANTS PRO9 GRAM.—Section 29 of the Small Business Act (15 U.S.C. 

10 656) is amended— 

11 (1) in subsection (a)— 

12 (A) by redesignating paragraphs (2), (3), 

13 and (4), as paragraphs (3), (4), and (5), re14 spectively; and 

15 (B) by inserting after paragraph (1) the 

16 following: 

17 ‘‘(2) the term ‘association of women’s business 

18 centers’ means an organization that represents not 

19 fewer than 30 percent of the women’s business cen20 ters that are participating in a program under this 

21 section, and whose primary purpose is to represent 

22 women’s business centers;’’; and 

23 (2) by striking subsections (b) through (f) and 

24 inserting the following: 

25 ‘‘(b) GRANTS AUTHORIZED.— 


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1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) ISSUANCE.—The Administrator may 

3 award initial and renewal grants of not more 

4 than $150,000 per year, which shall be known 

5 as ‘women’s business center grants’, to private 

6 nonprofit organizations to conduct projects for 

7 the benefit of small business concerns owned 

8 and controlled by women. 

9 ‘‘(B) RENEWALS.—At the end of the initial 

10 4-year grant period, and every 3 years there11 after, the grant recipient may apply to renew 

12 the grant in accordance with this subsection 

13 and subsection (e)(2). 

14 ‘‘(C) EQUAL ALLOCATIONS.—In the event 

15 that the Administration has insufficient funds 

16 to provide grants of $150,000 for each eligible 

17 women’s business center, available funds shall 

18 be allocated equally to eligible centers, unless 

19 any center requests a lower amount than the al20 locable amount. 

21 ‘‘(2) COOPERATIVE AGREEMENT AUTHORITY.— 

22 ‘‘(A) IN GENERAL.—The Administrator 

23 may enter into Federal cooperative agreements 

24 with grant recipients under this subsection to 

25 perform the services described under paragraph 


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1 (3), only to the extent and in the amount pro2 vided by appropriated funds. 

3 ‘‘(B) TERMINATION.— 

4 ‘‘(i) IN GENERAL.—If any grant re5 cipient under this subsection does not ful6 fill its grant obligations, after advanced no7 tification, during the period of the grant, 

8 the Administrator may terminate the 

9 grant. 

10 ‘‘(ii) EXCEPTION.—Notwithstanding a 

11 violation by a grant recipient of a grant 

12 obligation under this subsection, the Ad13 ministrator may continue to fund the 

14 grant, if the grant recipient is making a 

15 good faith effort to comply with such obli16 gation. 

17 ‘‘(3) USE OF FUNDS.—Grants awarded under 

18 this subsection may be used to provide training and 

19 counseling in the areas of— 

20 ‘‘(A) pre-business, business start-up, and 

21 business operations; 

22 ‘‘(B) financial planning assistance; 

23 ‘‘(C) procurement assistance; 

24 ‘‘(D) management assistance; 

25 ‘‘(E) marketing assistance; and 


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1 ‘‘(F) international trade. 

2 ‘‘(4) MATCHING REQUIREMENT.— 

3 ‘‘(A) WOMEN’S BUSINESS CENTER

4 GRANTS.—As a condition of receiving financial 

5 assistance under this subsection, the grant re6 cipient shall agree to obtain, after its applica7 tion has been approved and notice of award has 

8 been issued, cash contributions from non-Fed9 eral sources as follows: 

10 ‘‘(i) In the first and second years, 1 

11 non-Federal dollar for each 2 Federal dol12 lars provided under the 4-year grant. 

13 ‘‘(ii) In the third and fourth years, 1 

14 non-Federal dollar for each Federal dollar 

15 provided under the 4-year grant. 

16 ‘‘(iii) In each renewal period, 1 non17 Federal dollar for each Federal dollar pro18 vided under the 3-year grant. 

19 ‘‘(B) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more than 1 20 ⁄2 of the non-Federal 

21 sector matching assistance may be in the form 

22 of in-kind contributions that are budget line 

23 items only, including office equipment and of24 fice space. 


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1 ‘‘(C) FAILURE TO OBTAIN NON-FEDERAL

2 FUNDING.— 

3 ‘‘(i) ADVANCE DISBURSEMENTS.—If 

4 any grant recipient fails to obtain the re5 quired non-Federal contribution during 

6 any project year, it shall not be eligible for 

7 advance disbursements under subpara8 graph (D) during the remainder of that 

9 project year. 

10 ‘‘(ii) ABILITY TO OBTAIN NON-FED11 ERAL FUNDING.—Before approving assist12 ance to a grant recipient that has failed to 

13 obtain the required non-Federal contribu14 tion for any other projects under this Act, 

15 the Administrator shall require the grant 

16 recipient to certify that it will be able to 

17 obtain the requisite non-Federal funding 

18 and enter a written finding setting forth 

19 the reasons for making such determina20 tion. 

21 ‘‘(D) FORM OF FEDERAL CONTRIBU22 TIONS.—The financial assistance authorized 

23 under this subsection may be made by grant or 

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1 ments in lump sum or installments, and in ad2 vance or by way of reimbursement. The Admin3 istrator may disburse not more than 25 percent 

4 of the Federal share awarded to a grant recipi5 ent for each year after notice of the award has 

6 been issued and before the non-Federal sector 

7 matching funds are obtained. 

8 ‘‘(5) APPLICATION FOR AN INITIAL GRANT.— 

9 Each organization desiring an initial grant under 

10 this subsection, shall submit to the Administrator an 

11 application that contains— 

12 ‘‘(A) a certification that the applicant— 

13 ‘‘(i) is a private nonprofit organiza14 tion; 

15 ‘‘(ii) has designated an executive di16 rector or program manager, who may be 

17 compensated from grant funds or other 

18 sources, to manage the center; and 

19 ‘‘(iii) as a condition of receiving a 

20 grant under this subsection, agrees— 

21 ‘‘(I) to receive a site visit as part 

22 of the final selection process; 

23 ‘‘(II) to undergo an annual pro24 grammatic and financial examination; 

25 and 


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1 ‘‘(III) to the maximum extent 

2 practicable, to remedy any problems 

3 identified pursuant to the site visit or 

4 examination under subclauses (I) and 

5 (II); 

6 ‘‘(B) information demonstrating that the 

7 applicant has the ability and resources to meet 

8 the needs of the market to be served by the 

9 women’s business center site for which an ini10 tial grant is sought, including the ability to 

11 comply with the matching requirement under 

12 paragraph (4); 

13 ‘‘(C) information relating to assistance to 

14 be provided by the women’s business center site 

15 for which an initial grant is sought in the area 

16 in which the site is located; 

17 ‘‘(D) information demonstrating the effec18 tive experience of the applicant in— 

19 ‘‘(i) conducting financial, manage20 ment, and marketing assistance programs, 

21 as described under paragraph (3), which 

22 are designed to teach or upgrade the busi23 ness skills of women who are business own24 ers or potential business owners; 


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1 ‘‘(ii) providing training and services to 

2 a representative number of women who are 

3 both socially and economically disadvan4 taged; and 

5 ‘‘(iii) using resource partners of the 

6 Administration and other entities, such as 

7 universities; 

8 ‘‘(E) a 4-year plan that projects the ability 

9 of the women’s business center site for which 

10 an initial grant is sought— 

11 ‘‘(i) to serve women who are business 

12 owners or potential owners in the future by 

13 improving training and counseling activi14 ties; and 

15 ‘‘(ii) to provide training and services 

16 to a representative number of women who 

17 are both socially and economically dis18 advantaged; and 

19 ‘‘(F) any additional information that the 

20 Administrator may reasonably require. 

21 ‘‘(6) REVIEW AND APPROVAL OF APPLICATIONS

22 FOR AN INITIAL GRANT.— 

23 ‘‘(A) IN GENERAL.—The Administrator 

24 shall— 


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1 ‘‘(i) review each application submitted 

2 under paragraph (5), based on the infor3 mation described in such paragraph and 

4 the criteria set forth under subparagraph 

5 (B) of this paragraph; and 

6 ‘‘(ii) as part of the final selection 

7 process, conduct a site visit at each wom8 en’s business center for which an initial 

9 grant is sought. 

10 ‘‘(B) SELECTION CRITERIA.— 

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

12 shall evaluate applicants in accordance 

13 with predetermined selection criteria that 

14 shall be stated in terms of relative impor15 tance. Such criteria and their relative im16 portance shall be made publicly available 

17 and stated in each solicitation for applica18 tions made by the Administrator. 

19 ‘‘(ii) REQUIRED CRITERIA.—The se20 lection criteria for an initial grant under 

21 clause (i) shall include— 

22 ‘‘(I) the experience of the appli23 cant in conducting programs or ongo24 ing efforts designed to teach or up25 grade the business skills of women 


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1 who are business owners or potential 

2 owners; 

3 ‘‘(II) the ability of the applicant 

4 to commence a project within a min5 imum amount of time; 

6 ‘‘(III) the ability of the applicant 

7 to provide training and services to a 

8 representative number of women who 

9 are both socially and economically dis10 advantaged; and 

11 ‘‘(IV) the location for the wom12 en’s business center site proposed by 

13 the applicant. 

14 ‘‘(C) RECORD RETENTION.—The Adminis15 trator shall maintain a copy of each application 

16 submitted under this paragraph for not less 

17 than 7 years. 

18 ‘‘(7) APPLICATION FOR A RENEWAL GRANT.— 

19 Each organization desiring a renewal grant under 

20 this subsection, shall submit to the Administrator, 

21 not later than 3 months before the expiration of an 

22 existing grant under this subsection, an application 

23 that contains— 

24 ‘‘(A) a certification that the applicant— 


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1 ‘‘(i) is a private nonprofit organiza2 tion; 

3 ‘‘(ii) has designated an executive di4 rector or program manager to manage the 

5 center; and 

6 ‘‘(iii) as a condition of receiving a 

7 grant under this subsection, agrees— 

8 ‘‘(I) to receive a site visit as part 

9 of the final selection process; 

10 ‘‘(II) to submit, for the preceding 

11 2 years, annual programmatic and fi12 nancial examination reports or cer13 tified copies of the applicant’s compli14 ance supplemental audits under OMB 

15 Circular A–133; and 

16 ‘‘(III) to the maximum extent 

17 practicable, to remedy any problems 

18 identified pursuant to the site visit or 

19 examination under subclauses (I) and 

20 (II); 

21 ‘‘(B) information demonstrating that the 

22 applicant has the ability and resources to meet 

23 the needs of the market to be served by the 

24 women’s business center site for which a re25 newal grant is sought, including the ability to 


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1 comply with the matching requirement under 

2 paragraph (4); 

3 ‘‘(C) information relating to assistance to 

4 be provided by the women’s business center site 

5 for which a renewal grant is sought in the area 

6 in which the site is located; 

7 ‘‘(D) information demonstrating the utili8 zation of resource partners of the Administra9 tion and other entities; 

10 ‘‘(E) a 3-year plan that projects the ability 

11 of the women’s business center site for which a 

12 renewal grant is sought— 

13 ‘‘(i) to serve women who are business 

14 owners or potential owners in the future by 

15 improving training and counseling activi16 ties; and 

17 ‘‘(ii) to provide training and services 

18 to a representative number of women who 

19 are both socially and economically dis20 advantaged; and 

21 ‘‘(F) any additional information that the 

22 Administrator may reasonably require. 

23 ‘‘(8) REVIEW AND APPROVAL OF APPLICATIONS

24 FOR A RENEWAL GRANT.— 


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1 ‘‘(A) IN GENERAL.—The Administrator 

2 shall— 

3 ‘‘(i) review each application submitted 

4 under paragraph (7), based on the infor5 mation described in such paragraph and 

6 the criteria set forth under subparagraph 

7 (B) of this paragraph; and 

8 ‘‘(ii) as part of the final selection 

9 process, conduct a site visit at each wom10 en’s business center for which a renewal 

11 grant is sought. 

12 ‘‘(B) SELECTION CRITERIA.—The Admin13 istrator shall evaluate applicants in accordance 

14 with predetermined selection criteria that shall 

15 be stated in terms of relative importance. Such 

16 criteria and their relative importance shall be 

17 made publicly available and stated in each solic18 itation for applications made by the Adminis19 trator. 

20 ‘‘(C) CONDITIONS FOR CONTINUED FUND21 ING.—In determining whether to renew a grant 

22 or cooperative agreement with a women’s busi23 ness center, the Administrator— 

24 ‘‘(i) shall consider the results of the 

25 most recent evaluation of the center, and, 


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1 to a lesser extent, previous evaluations; 

2 and 

3 ‘‘(ii) may withhold such renewal, if 

4 the Administrator determines that the cen5 ter has failed to provide the information 

6 required to be provided under this sub7 section, or the information provided by the 

8 center is inadequate. 

9 ‘‘(D) CONTINUING GRANT AND COOPERA10 TIVE AGREEMENT AUTHORITY.— 

11 ‘‘(i) IN GENERAL.—The authority of 

12 the Administrator to enter into grants or 

13 cooperative agreements under this sub14 section shall be in effect for each fiscal 

15 year only to the extent and in the amounts 

16 as are provided in advance in appropria17 tions Acts. 

18 ‘‘(ii) RENEWAL.—After the Adminis19 trator has entered into a grant or coopera20 tive agreement with any women’s business 

21 center under this subsection, the Adminis22 trator shall not suspend, terminate, or fail 

23 to renew or extend any such grant or coop24 erative agreement, unless the Adminis25 trator provides the center with written noVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 tification setting forth the reasons there2 fore and affords the center an opportunity 

3 for a hearing, appeal, or other administra4 tive proceeding under chapter 5 of title 5, 

5 United States Code. 

6 ‘‘(E) RECORD RETENTION.—The Adminis7 trator shall maintain a copy of each application 

8 submitted under this paragraph for not less 

9 than 7 years. 

10 ‘‘(9) DATA COLLECTION.—Consistent with the 

11 annual report to Congress under subsection (g), 

12 each women’s business center site that is awarded 

13 an initial or renewal grant under this subsection 

14 shall collect information relating to— 

15 ‘‘(A) the number of individuals counseled 

16 or trained; 

17 ‘‘(B) the number of hours of counseling 

18 provided; 

19 ‘‘(C) the number of workshops conducted; 

20 ‘‘(D) the number of start-up small busi21 ness concerns formed; and 

22 ‘‘(E) the number of jobs created or main23 tained at assisted small business concerns. 

24 ‘‘(10) PRIVACY REQUIREMENTS.— 


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1 ‘‘(A) IN GENERAL.—A women’s business 

2 center may not disclose the name, address, or 

3 telephone number of any individual or small 

4 business concern receiving assistance under this 

5 subsection without the consent of such indi6 vidual or small business concern, unless— 

7 ‘‘(i) the Administrator is ordered to 

8 make such a disclosure by a court in any 

9 civil or criminal enforcement action initi10 ated by a Federal or State agency; or 

11 ‘‘(ii) the Administrator considers such 

12 a disclosure to be necessary for the pur13 pose of conducting a financial audit of a 

14 women’s business center, but a disclosure 

15 under this clause shall be limited to the in16 formation necessary for such audit. 

17 ‘‘(B) ADMINISTRATION USE OF INFORMA18 TION.—This subsection shall not— 

19 ‘‘(i) restrict Administration access to 

20 program activity data; or 

21 ‘‘(ii) prevent the Administration from 

22 using client information (other than the in23 formation described in subparagraph (A)) 

24 to conduct client surveys. 


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1 ‘‘(C) REGULATIONS.—The Administrator 

2 shall issue regulations to establish standards for 

3 requiring disclosures during a financial audit 

4 under subparagraph (A)(ii). 

5 ‘‘(11) TRANSITION RULES.— 

6 ‘‘(A) IN GENERAL.—Notwithstanding any 

7 other provision of law, a grant or cooperative 

8 agreement that was awarded as an eligible sus9 tainability grant, from amounts appropriated 

10 for fiscal year 2006, to operate a women’s busi11 ness center, shall remain in full force and effect 

12 under the terms, and for the duration, of such 

13 agreement, subject to the grant limitation in 

14 paragraph (1). 

15 ‘‘(B) EXTENSION.—If a sustainability 

16 grant under subparagraph (A) is scheduled to 

17 expire not later than June 30, 2007, a 1-year 

18 extension shall be granted without any interrup19 tion of funding, subject to the grant limitation 

20 in paragraph (1). 

21 ‘‘(C) EFFECT ON CERTAIN EXISTING

22 PROJECTS AND RENEWAL AUTHORITY.—A 

23 project being conducted by a women’s business 

24 center under this subsection on the day before 

25 the date of enactment of the Small Business 


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1 Reauthorization and Improvements Act of 

2 2006— 

3 ‘‘(i) as a 5-year project, shall remain 

4 in full force and effect under the terms 

5 and for the duration of that agreement; 

6 and 

7 ‘‘(ii) shall be eligible to apply for a 3- 

8 year renewal grant funded at a level equal 

9 to not more than $150,000 per year. 

10 ‘‘(c) ASSOCIATIONS OF WOMEN’S BUSINESS CEN11 TERS.— 

12 ‘‘(1) RECOGNITION.—The Administrator shall 

13 recognize the existence and activities of any associa14 tion of women’s business centers established to ad15 dress matters of common concern. 

16 ‘‘(2) CONSULTATION.—The Administrator shall 

17 consult with each association of women’s business 

18 centers to develop— 

19 ‘‘(A) a training program for the staff of 

20 the women’s business centers and the Adminis21 tration; and 

22 ‘‘(B) recommendations to improve the poli23 cies and procedures for governing the general 

24 operations and administration of the Women’s 


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1 Business Center Program, including grant pro2 gram improvements under subsection (e)(5).’’. 

3 (b) CONFORMING AMENDMENTS.—Section 29 of the 

4 Small Business Act (15 U.S.C. 656) is amended— 

5 (1) by redesignating subsections (g), (h), (i), 

6 (j), and (k) as subsections (d), (e), (f), (g), and (h), 

7 respectively; 

8 (2) in subsection (e)(2), as redesignated by 

9 paragraph (1) of this subsection, by striking ‘‘to 

10 award a contract (as a sustainability grant) under 

11 subsection (l) or’’; 

12 (3) in subsection (g)(1), as redesignated by 

13 paragraph (1) of this subsection, by striking ‘‘The 

14 Administration’’ and inserting ‘‘Not later than No15 vember 1st of each year, the Administrator’’; 

16 (4) in subsection (h), as redesignated by para17 graph (1) of this subsection— 

18 (A) by striking paragraphs (1) and (2) and 

19 inserting the following: 

20 ‘‘(1) IN GENERAL.—There are authorized to be 

21 appropriated to the Administration to carry out this 

22 section, to remain available until expended— 

23 ‘‘(A) $15,000,000 for fiscal year 2007, of 

24 which $500,000 may be used to provide supple25 mental sustainability grants to women’s busiVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00179 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 ness centers, except that no such center may re2 ceive more than a total of $125,000 in grant 

3 funding for the grant period beginning on July 

4 1, 2006 and ending on June 30, 2007; 

5 ‘‘(B) $16,000,000 for fiscal year 2008; and 

6 ‘‘(C) $17,500,000 for fiscal year 2009. 

7 ‘‘(2) USE OF AMOUNTS.—Amounts made avail8 able under this subsection may only be used for 

9 grant awards and may not be used for costs incurred 

10 by the Administration in connection with the man11 agement and administration of the program under 

12 this section.’’; and 

13 (B) by striking paragraph (4); and 

14 (5) by striking subsection (l). 

15 SEC. 803. NATIONAL WOMEN’S BUSINESS COUNCIL. 

16 (a) COSPONSORSHIP AUTHORITY.—Section 406 of 

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

18 7106) is amended by adding at the end the following: 

19 ‘‘(f) COSPONSORSHIP AUTHORITY.—The Council is 

20 authorized to enter into agreements as a cosponsor with 

21 public and private entities, in the same manner as is pro22 vided in section 8(b)(1)(A) of the Small Business Act (15 

23 U.S.C. 637(b)(1)(A)), to carry out its duties under this 

24 section.’’. 


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1 (b) MEMBERSHIP.—Section 407(f) of the Women’s 

2 Business Ownership Act of 1988 (15 U.S.C. 7107(f)) is 

3 amended by adding at the end the following: 

4 ‘‘(3) REPRESENTATION OF MEMBER ORGANIZA5 TIONS.—In consultation with the chairperson of the 

6 Council and the Administrator, a national women’s 

7 business organization or small business concern that 

8 is represented on the Council may replace its rep9 resentative member on the Council during the serv10 ice term to which that member was appointed.’’. 

11 (c) ESTABLISHMENT OF WORKING GROUPS.—Title 

12 IV of the Women’s Business Ownership Act of 1988 (15 

13 U.S.C. 7101 et seq.) is amended by inserting after section 

14 410, the following new section: 

15 ‘‘SEC. 411. WORKING GROUPS. 

16 ‘‘(a) ESTABLISHMENT.—There are established within 

17 the Council, working groups, as directed by the chair18 person. 

19 ‘‘(b) DUTIES.—The working groups established 

20 under subsection (a) shall perform such duties as the 

21 chairperson shall direct.’’. 

22 (d) CLEARINGHOUSE FOR HISTORICAL DOCU23 MENTS.—Section 409 of the Women’s Business Owner24 ship Act of 1988 (15 U.S.C. 7109) is amended by adding 

25 at the end the following: 


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1 ‘‘(c) CLEARINGHOUSE FOR HISTORICAL DOCU2 MENTS.—The Council shall serve as a clearinghouse for 

3 information on small businesses owned and controlled by 

4 women, including research conducted by other organiza5 tions and individuals relating to ownership by women of 

6 small business concerns in the United States.’’. 

7 (e) AUTHORIZATION OF APPROPRIATIONS.—Section 

8 410(a) of the Women’s Business Ownership Act of 1988 

9 (15 U.S.C. 7110(a)) is amended by striking ‘‘2001 

10 through 2003, of which $550,000’’ and inserting ‘‘2007 

11 through 2009, of which not less than 30 percent’’. 

12 SEC. 804. INTERAGENCY COMMITTEE ON WOMEN’S BUSI13 NESS ENTERPRISE. 

14 (a) CHAIRPERSON.—Section 403(b) of the Women’s 

15 Business Ownership Act of 1988 (15 U.S.C. 7103(b)) is 

16 amended— 

17 (1) by striking ‘‘Not later’’ and inserting the 

18 following: 

19 ‘‘(1) IN GENERAL.—Not later’’; and 

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

21 ‘‘(2) VACANCY.—In the event that a chair22 person is not appointed under paragraph (1), the 

23 Deputy Administrator of the Small Business Admin24 istration shall serve as acting chairperson of the 


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1 Interagency Committee until a chairperson is ap2 pointed under paragraph (1).’’. 

3 (b) POLICY ADVISORY GROUP.—Section 401 of the 

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

5 7101) is amended— 

6 (1) by striking ‘‘There’’ and inserting the fol7 lowing: 

8 ‘‘(a) IN GENERAL.—There’’; and 

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

10 ‘‘(b) POLICY ADVISORY GROUP.— 

11 ‘‘(1) ESTABLISHMENT.—There is established a 

12 Policy Advisory Group to assist the chairperson in 

13 developing policies and programs under this Act. 

14 ‘‘(2) MEMBERSHIP.—The Policy Advisory 

15 Group shall be composed of 7 policy making offi16 cials, of whom— 

17 ‘‘(A) 1 shall be a representative of the 

18 Small Business Administration; 

19 ‘‘(B) 1 shall be a representative of the De20 partment of Commerce; 

21 ‘‘(C) 1 shall be a representative of the De22 partment of Labor; 

23 ‘‘(D) 1 shall be a representative of the De24 partment of Defense; 


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1 ‘‘(E) 1 shall be a representative of the De2 partment of the Treasury; and 

3 ‘‘(F) 2 shall be representatives of the 

4 Council.’’. 

5 SEC. 805. PRESERVING THE INDEPENDENCE OF THE NA6 TIONAL WOMEN’S BUSINESS COUNCIL. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) The National Women’s Business Council 

9 provides an independent source of advice and policy 

10 recommendations regarding women’s business devel11 opment and the needs of women entrepreneurs in 

12 the United States to— 

13 (A) the President; 

14 (B) Congress; 

15 (C) the Interagency Committee on Wom16 en’s Business Enterprise; and 

17 (D) the Administrator. 

18 (2) The members of the National Women’s 

19 Business Council are small business owners, rep20 resentatives of business organizations, and rep21 resentatives of women’s business centers. 

22 (3) The chair and ranking member of the Com23 mittee on Small Business and Entrepreneurship of 

24 the Senate and the Committee on Small Business of 

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1 tions to the Administrator to fill 8 of the positions 

2 on the National Women’s Business Council. Four of 

3 the positions are reserved for small business owners 

4 who are affiliated with the political party of the 

5 President and 4 of the positions are reserved for 

6 small business owners who are not affiliated with the 

7 political party of the President. This method of ap8 pointment ensures that the National Women’s Busi9 ness Council will provide Congress with nonpartisan, 

10 balanced, and independent advice. 

11 (4) In order to maintain the independence of 

12 the National Women’s Business Council and to en13 sure that the Council continues to provide Congress 

14 with advice on a nonpartisan basis, it is essential 

15 that the Council maintain the bipartisan balance es16 tablished under section 407 of the Women’s Busi17 ness Ownership Act of 1988 (15 U.S.C. 7107). 

18 (b) MAINTENANCE OF PARTISAN BALANCE.—Section 

19 407(f) of the Women’s Business Ownership Act of 1988 

20 (15 U.S.C. 7107(f)), as amended by this Act, is amended 

21 by adding at the end the following: 

22 ‘‘(4) PARTISAN BALANCE.—When filling a va23 cancy under paragraph (1) of this subsection of a 

24 member appointed under paragraph (1) or (2) of 

25 subsection (b), the Administrator shall, to the extent 


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1 practicable, ensure that there are an equal number 

2 of members on the Council from each of the 2 major 

3 political parties. 

4 ‘‘(5) ACCOUNTABILITY.—If a vacancy is not 

5 filled within the 30-day period required under para6 graph (1), or if there exists an imbalance of party7 affiliated members on the Council for a period ex8 ceeding 30 days, the Administrator shall submit a 

9 report, not later than 10 days after the expiration 

10 of either such 30-day deadline, to the Committee on 

11 Small Business and Entrepreneurship of the Senate 

12 and the Committee on Small Business of the House 

13 of Representatives, that explains why the respective 

14 deadline was not met and provides an estimated date 

15 on which any vacancies will be filled, as applicable.’’. 

16 TITLE IX—INTERNATIONAL 

17 TRADE 

18 SEC. 901. SMALL BUSINESS ADMINISTRATION ASSOCIATE 

19 ADMINISTRATOR FOR INTERNATIONAL 

20 TRADE. 

21 (a) ESTABLISHMENT.—Section 22(a) of the Small 

22 Business Act (15 U.S.C. 649(a)) is amended by adding 

23 at the end the following: ‘‘The head of the Office shall 

24 be the Associate Administrator for International Trade, 

25 who shall be responsible to the Administrator.’’. 


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1 (b) AUTHORITY FOR ADDITIONAL ASSOCIATE AD2 MINISTRATOR.—Section 4(b)(1) of the Small Business Act 

3 (15 U.S.C. 633(b)(1)) is amended— 

4 (1) in the fifth sentence, by striking ‘‘five Asso5 ciate Administrators’’ and inserting ‘‘Associate Ad6 ministrators’’; and 

7 (2) by adding at the end the following: ‘‘One of 

8 the Associate Administrators shall be the Associate 

9 Administrator for International Trade, who shall be 

10 the head of the Office of International Trade estab11 lished under section 22.’’. 

12 (c) DISCHARGE OF ADMINISTRATION INTER13 NATIONAL TRADE RESPONSIBILITIES.—Section 22 of the 

14 Small Business Act (15 U.S.C. 649) is amended by adding 

15 at the end the following: 

16 ‘‘(h) DISCHARGE OF ADMINISTRATION INTER17 NATIONAL TRADE RESPONSIBILITIES.—The Adminis18 trator shall ensure that— 

19 ‘‘(1) the responsibilities of the Administration 

20 regarding international trade are carried out 

21 through the Associate Administrator for Inter22 national Trade; 

23 ‘‘(2) the Associate Administrator for Inter24 national Trade has sufficient resources to carry out 

25 such responsibilities; and 


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1 ‘‘(3) the Associate Administrator for Inter2 national Trade has direct supervision and control 

3 over the staff of the Office of International Trade, 

4 and over any employee of the Administration whose 

5 principal duty station is a United States Export As6 sistance Center or any successor entity.’’. 

7 (d) ROLE OF ASSOCIATE ADMINISTRATOR IN CAR8 RYING OUT INTERNATIONAL TRADE POLICY.—Section 

9 2(b)(1) of the Small Business Act (15 U.S.C. 631(b)(1)) 

10 is amended in the matter preceding subparagraph (A)— 

11 (1) by inserting ‘‘the Administrator of’’ before 

12 ‘‘the Small Business Administration’’; and 

13 (2) by inserting ‘‘through the Associate Admin14 istrator for International Trade, and’’ before ‘‘in co15 operation with’’. 

16 (e) TECHNICAL AMENDMENT.—Section 22(c)(5) of 

17 the Small Business Act (15 U.S.C. 649(c)(5)) is amended 

18 by striking the period at the end and inserting a semi19 colon. 

20 (f) EFFECTIVE DATE.—Not later than 90 days after 

21 the date of enactment of this Act, the Administrator shall 

22 appoint an Associate Administrator for International 

23 Trade under section 22 of the Small Business Act (15 

24 U.S.C. 649), as amended by this section. 


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1 SEC. 902. OFFICE OF INTERNATIONAL TRADE. 

2 Section 22 of the Small Business Act (15 U.S.C. 649) 

3 is amended— 

4 (1) by striking ‘‘SEC. 22. (a) There’’ and in5 serting the following: 

6 ‘‘SEC. 22. OFFICE OF INTERNATIONAL TRADE. 

7 ‘‘(a) ESTABLISHMENT.—There’’. 

8 (2) in subsection (a), by inserting ‘‘(referred to 

9 in this section as the ‘Office’),’’ after ‘‘Trade’’; 

10 (3) in subsection (b)— 

11 (A) by striking ‘‘The Office’’ and inserting 

12 the following: 

13 ‘‘(b) TRADE DISTRIBUTION NETWORK.—The Office, 

14 including United States Export Assistance Centers (re15 ferred to as ‘one-stop shops’ in section 2301(b)(8) of the 

16 Omnibus Trade and Competitiveness Act of 1988 (15 

17 U.S.C. 4721(b)(8)) and as ‘export centers’ in this sec18 tion)’’; and 

19 (B) by amending paragraph (1) to read as 

20 follows: 

21 ‘‘(1) assist in maintaining a distribution net22 work using regional and local offices of the Adminis23 tration, the small business development center net24 work, the women’s business center network, and ex25 port centers for— 

26 ‘‘(A) trade promotion; 


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1 ‘‘(B) trade finance; 

2 ‘‘(C) trade adjustment; 

3 ‘‘(D) trade remedy assistance; and 

4 ‘‘(E) trade data collection.’’; 

5 (4) in subsection (c)— 

6 (A) by redesignating paragraphs (1) 

7 through (8) as paragraphs (2) through (9), re8 spectively; 

9 (B) by inserting before paragraph (2), as 

10 so redesignated, the following: 

11 ‘‘(1) establish annual goals for the Office relat12 ing to— 

13 ‘‘(A) enhancing the exporting capability of 

14 small business concerns and small manufactur15 ers; 

16 ‘‘(B) facilitating technology transfers; 

17 ‘‘(C) enhancing programs and services to 

18 assist small business concerns and small manu19 facturers to compete effectively and efficiently 

20 against foreign entities; 

21 ‘‘(D) increasing the access to capital by 

22 small business concerns; 

23 ‘‘(E) disseminating information concerning 

24 Federal, State, and private programs and initia25 tives; and 


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1 ‘‘(F) ensuring that the interests of small 

2 business concerns are adequately represented in 

3 trade negotiations;’’; 

4 (C) in paragraph (2), as so redesignated, 

5 by striking ‘‘mechanism for’’ and all that fol6 lows through ‘‘(D)’’ and inserting the following: 

7 ‘‘mechanism for— 

8 ‘‘(A) identifying subsectors of the small 

9 business community with strong export poten10 tial; 

11 ‘‘(B) identifying areas of demand in for12 eign markets; 

13 ‘‘(C) prescreening foreign buyers for com14 mercial and credit purposes; and 

15 ‘‘(D)’’; and 

16 (D) in paragraph (9), as so redesignated— 

17 (i) in the matter preceding subpara18 graph (A)— 

19 (I) by striking ‘‘full-time export 

20 development specialists to each Ad21 ministration regional office and as22 signing’’; and 

23 (II) by striking ‘‘office. Such spe24 cialists’’ and inserting ‘‘office and pro25 viding each Administration regional 


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1 office with a full-time export develop2 ment specialist, who’’; 

3 (ii) in subparagraph (D), by striking 

4 ‘‘and’’ at the end; 

5 (iii) in subparagraph (E), by striking 

6 the period at the end and inserting a semi7 colon; and 

8 (iv) by adding at the end the fol9 lowing: 

10 ‘‘(F) participate jointly with employees of 

11 the Office in an annual training program that 

12 focuses on current small business needs for ex13 porting; and 

14 ‘‘(G) jointly develop and conduct training 

15 programs for exporters and lenders in coopera16 tion with the United States Export Assistance 

17 Centers, the Department of Commerce, small 

18 business development centers, and other rel19 evant Federal agencies.’’; 

20 (5) in subsection (d)— 

21 (A) by inserting ‘‘EXPORT FINANCING

22 PROGRAMS.—’’ after ‘‘(d)’’; 

23 (B) by redesignating paragraphs (1) 

24 through (5) as clauses (i) through (v), respec25 tively, and adjusting the margins accordingly; 


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1 (C) by striking ‘‘The Office shall work in 

2 cooperation’’ and inserting the following: 

3 ‘‘(1) IN GENERAL.—The Office shall work in 

4 cooperation’’; and 

5 (D) by striking ‘‘To accomplish this goal, 

6 the Office shall work’’ and inserting the fol7 lowing: 

8 ‘‘(2) TRADE FINANCIAL SPECIALIST.—To ac9 complish the goal established under paragraph (1), 

10 the Office shall— 

11 ‘‘(A) designate at least 1 individual within 

12 the Administration as a trade financial spe13 cialist to oversee international loan programs 

14 and assist Administration employees with trade 

15 finance issues; and 

16 ‘‘(B) work’’; 

17 (6) in subsection (e), by inserting ‘‘TRADE

18 REMEDIES.—’’ after ‘‘(e)’’; 

19 (7) by amending subsection (f) to read as fol20 lows: 

21 ‘‘(f) REPORTING REQUIREMENT.—The Office shall 

22 submit an annual report to the Committee on Small Busi23 ness and Entrepreneurship of the Senate and the Com24 mittee on Small Business of the House of Representatives 

25 that contains— 


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1 ‘‘(1) a description of the progress of the Office 

2 in implementing the requirements of this section; 

3 ‘‘(2) the destinations of travel by Office staff 

4 and benefits to the Administration and to small 

5 business concerns therefrom; and 

6 ‘‘(3) a description of the participation by the 

7 Office in trade negotiations.’’; 

8 (8) in subsection (g), by inserting ‘‘STUD9 IES.—’’ after ‘‘(g)’’; and 

10 (9) by adding at the end the following: 

11 ‘‘(i) EXPORT ASSISTANCE CENTERS.— 

12 ‘‘(1) IN GENERAL.—During the period begin13 ning on October 1, 2006, and ending on September 

14 30, 2009, the Administrator shall ensure that the 

15 number of full-time equivalent employees of the Of16 fice assigned to the one-stop shops referred to in 

17 section 2301(b) of the Omnibus Trade and Competi18 tiveness Act of 1988 (15 U.S.C. 4721 (b)) is not less 

19 than the number of such employees so assigned on 

20 January 1, 2003. 

21 ‘‘(2) PRIORITY OF PLACEMENT.—Priority shall 

22 be given, to the maximum extent practicable, to 

23 placing employees of the Administration at any Ex24 port Assistance Center that— 


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1 ‘‘(A) had an Administration employee as2 signed to such Center before January 2003; 

3 and 

4 ‘‘(B) has not had an Administration em5 ployee assigned to such Center during the pe6 riod beginning January 2003, and ending on 

7 the date of enactment of this subsection, either 

8 through retirement or reassignment. 

9 ‘‘(3) NEEDS OF EXPORTERS.—The Adminis10 trator shall, to the maximum extent practicable, 

11 strategically assign Administration employees to Ex12 port Assistance Centers, based on the needs of ex13 porters. 

14 ‘‘(4) GOALS.—The Office shall work with the 

15 Department of Commerce and the Export-Import 

16 Bank to establish shared annual goals for the Ex17 port Centers. 

18 ‘‘(5) OVERSIGHT.—The Office shall designate 

19 an individual within the Administration to oversee 

20 all activities conducted by Administration employees 

21 assigned to Export Centers.’’. 

22 SEC. 903. INTERNATIONAL TRADE LOANS. 

23 (a) IN GENERAL.—Section 7(a)(3)(B) of the Small 

24 Business Act (15 U.S.C. 636(a)(3)(B)) is amended by 

25 striking ‘‘$1,750,000, of which not more than 


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1 $1,250,000’’ and inserting ‘‘$2,750,000 (or if the gross 

2 loan amount would exceed $3,670,000), of which not more 

3 than $2,000,000’’. 

4 (b) WORKING CAPITAL.—Section 7(a)(16)(A) of the 

5 Small Business Act (15 U.S.C. 636(a)(16)(A)) is amend6 ed— 

7 (1) in the matter preceding clause (i), by strik8 ing ‘‘in—’’ and inserting ‘‘—’’; 

9 (2) in clause (i)— 

10 (A) by inserting ‘‘in’’ after ‘‘(i)’’; and 

11 (B) by striking ‘‘or’’ at the end; 

12 (3) in clause (ii)— 

13 (A) by inserting ‘‘in’’ after ‘‘(ii)’’; and 

14 (B) by striking the period and inserting ‘‘; 

15 or’’; and 

16 (4) by adding at the end the following: 

17 ‘‘(iii) by providing working capital.’’. 

18 (c) COLLATERAL.—Section 7(a)(16)(B) of the Small 

19 Business Act (15 U.S.C. 636(a)(16)(B)) is amended— 

20 (1) by striking ‘‘Each loan’’ and inserting the 

21 following: 

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (ii), each loan’’; and 

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


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1 ‘‘(ii) EXCEPTION.—A loan under this 

2 paragraph may be secured by a second lien 

3 position on the property or equipment fi4 nanced by the loan or on other assets of 

5 the small business concern, if the Adminis6 trator determines such lien provides ade7 quate assurance of the payment of such 

8 loan.’’. 

9 (d) REFINANCING.—Section 7(a)(16)(A)(ii) of the 

10 Small Business Act (15 U.S.C. 636(a)(16)(A)(ii)), as 

11 amended by this section, is amended by inserting ‘‘, in12 cluding any debt that qualifies for refinancing under any 

13 other provision of this subsection’’ before the semicolon. 

14 TITLE X—CONTRACT BUNDLING 

15 SEC. 1001. PRESIDENTIAL POLICY. 

16 Section 3(o) of the Small Business Act (15 U.S.C. 

17 632(o)) is amended— 

18 (1) by striking paragraphs (2) and (3); and 

19 (2) by inserting after paragraph (1) the fol20 lowing: 

21 ‘‘(2) POLICY.—It is the policy of Congress that each 

22 Federal agency shall endeavor to promote competition and 

23 small business procurement opportunities by unbundling 

24 Government contracts in accordance with the Presidential 

25 policy on contract bundling of March 19, 2002. 


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1 ‘‘(3) BUNDLING OF CONTRACT REQUIREMENTS.—In 

2 this Act, the term ‘bundling of contract requirements’ 

3 means a use of solicitation for a single contract or a mul4 tiple award contract to satisfy 2 or more requirements of 

5 any Federal agency for goods or services that restricts 

6 competition or limits the number of suppliers by being 

7 likely unsuitable for award to a small business concern due 

8 to— 

9 ‘‘(A) the diversity, size, or specialized nature of 

10 the elements of the performance specified; 

11 ‘‘(B) the aggregate dollar value of the antici12 pated award; 

13 ‘‘(C) the geographical dispersion of the contract 

14 performance sites; 

15 ‘‘(D) unduly restrictive contract requirements 

16 or any other similar procurement strategy or factor 

17 that restricts the ability of a responsible small busi18 ness concern to compete or otherwise participate as 

19 a prime contractor in the procurement; or 

20 ‘‘(E) any combination of the factors described 

21 in (A) through (D).’’. 

22 ‘‘(4) PRESUMED BUNDLINGS.—The Adminis23 trator and each Federal agency shall, for all pur24 poses under this Act, presumptively treat as bundled 

25 any contract that— 


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1 ‘‘(A) is valued at more than 3 times the 

2 substantial bundling threshold for such agency; 

3 and 

4 ‘‘(B) is not set aside or reserved for award, 

5 in whole or in part, to a small business concern 

6 or to a team of small business concerns.’’. 

7 SEC. 1002. LEADERSHIP AND OVERSIGHT. 

8 (a) IN GENERAL.—Section 15 of the Small Business 

9 Act (15 U.S.C. 644) is amended by adding at the end the 

10 following: 

11 ‘‘(q) BUNDLING ACCOUNTABILITY MEASURES.— 

12 ‘‘(1) GOVERNMENTWIDE ACCOUNTABILITY ON

13 BUNDLING.— 

14 ‘‘(A) REINSTATEMENT OF REPORTING RE15 QUIREMENTS.—In addition to submitting such 

16 annual reports on all incidents of bundling to 

17 the Administrator as may be required under 

18 Federal law, the head of each Federal agency 

19 shall submit an annual report on all incidents 

20 of bundling to the Administrator for Federal 

21 Procurement Policy. 

22 ‘‘(B) REPORT TO CONGRESS.—The Admin23 istrator shall promptly review and annually re24 port to Congress information on any discrep25 ancies between the reports on bundled contracts 


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1 from Federal agencies to the Administration, 

2 the Office of Federal Procurement Policy, and 

3 the Federal procurement data system described 

4 in subsection (c)(5). 

5 ‘‘(2) TEAMING REQUIREMENTS.—Each Federal 

6 agency shall include in each solicitation for any con7 tract award above the substantial bundling threshold 

8 of such agency a provision soliciting small business 

9 teams and joint ventures. 

10 ‘‘(3) IMPLEMENTATION OF COMPTROLLER GEN11 ERAL’S RECOMMENDATIONS.—Not later than 270 

12 days after the date of enactment of this subsection, 

13 the Administrator, with the concurrence of the Ad14 ministrator for Federal Procurement Policy, shall 

15 ensure that, in response to the recommendations of 

16 the Comptroller General of the United States con17 tained in Report No. GAO–04–454, titled ‘Contract 

18 Management: Impact of Strategy to Mitigate Effects 

19 of Contract Bundling Is Uncertain’— 

20 ‘‘(A) modifications are made to the Fed21 eral procurement data system described in sub22 section (c)(5) to capture information concerning 

23 the impact of bundling on small business con24 cerns; 


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1 ‘‘(B) the Administrator receives from each 

2 Federal agency an annual report containing in3 formation concerning— 

4 ‘‘(i) the number and dollar value of 

5 bundled contract actions and contracts; 

6 ‘‘(ii) benefit analyses (including the 

7 total dollars saved) to justify why contracts 

8 are bundled; 

9 ‘‘(iii) the number of small business 

10 concerns losing Federal contracts because 

11 of bundling; 

12 ‘‘(iv) how contractors awarded bun13 dled contracts complied with the agencies 

14 subcontracting plans; and 

15 ‘‘(v) how mitigating actions, such as 

16 teaming arrangements, provided increased 

17 contracting opportunities to small business 

18 concerns. 

19 ‘‘(4) GOVERNMENTWIDE REVIEW OF BUNDLING

20 INTERPRETATIONS.— 

21 ‘‘(A) IN GENERAL.—The Administrator, 

22 with the concurrence of the Chief Counsel for 

23 Advocacy and the Inspector General, shall con24 duct a governmentwide review of the Federal 


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1 agencies legal interpretations of antibundling 

2 statutory and regulatory requirements. 

3 ‘‘(B) REPORT.—Not later than 1 year 

4 after the date of enactment of this subsection, 

5 the Administrator shall submit to Congress a 

6 report containing the findings of the review con7 ducted under subparagraph (A). 

8 ‘‘(5) AGENCY POLICIES ON REDUCTION OF CON9 TRACT BUNDLING.—Not later than 180 days after 

10 the date of enactment of this subsection, the head of 

11 each Federal agency shall, with concurrence of the 

12 Administrator, issue a policy on the reduction of 

13 contract bundling. 

14 ‘‘(6) BEST PRACTICES ON CONTRACT BUNDLING

15 REDUCTION AND MITIGATION.—Not later than 60 

16 days after the date of the enactment of this sub17 section, the Administrator shall publish a guide on 

18 best practices to reduce contract bundling, as di19 rected by the Strategy and Report on Contract Bun20 dling issued by the Office of Management and Budg21 et on October 29, 2002, and disseminate the guide 

22 through the President’s Management Council. 

23 ‘‘(7) SMALL BUSINESS PERFORMANCE OF

24 AGENCY LEADERSHIP.—Not later than 270 days 

25 after the date of the enactment of this subsection, 


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1 the Administrator, together with the Administrator 

2 for Federal Procurement Policy and the head of any 

3 other appropriate Federal agency, shall jointly estab4 lish a policy on rewarding and sanctioning perform5 ance of Federal managers with regard to compliance 

6 with this Act and the President’s Initiative Against 

7 Contract Bundling. 

8 ‘‘(8) CONTRACT BUNDLING OVERSIGHT.— 

9 ‘‘(A) POLICY.—It is the policy of Congress 

10 that the Administrator shall take appropriate 

11 actions to remedy contract bundling oversight 

12 problems identified by the Inspector General of 

13 the Administration in Report No. 5–14, titled 

14 ‘Audit of the Contract Bundling Program’. 

15 ‘‘(B) CORRECTIVE ACTION.— 

16 ‘‘(i) ASSIGNMENT OF PROCUREMENT

17 CENTER REPRESENTATIVES.— 

18 ‘‘(I) IN GENERAL.—The Admin19 istrator shall assign not fewer than 1 

20 procurement center representative to 

21 each major procurement center, as 

22 designated by the Administrator 

23 under section 8(l)(6) and ensure that, 

24 in any case, each State has not fewer 


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1 than 1 resident procurement center 

2 representative. 

3 ‘‘(II) REPORTING.—The Admin4 istrator shall annually submit to Con5 gress a report— 

6 ‘‘(aa) containing a list of 

7 designations of major procure8 ment centers in effect during the 

9 relevant fiscal year; 

10 ‘‘(bb) detailing the criteria 

11 for designations; 

12 ‘‘(cc) containing a list of all 

13 procurement activities under re14 view by a procurement center 

15 representative or breakout pro16 curement center representative 

17 during the relevant fiscal year; 

18 and 

19 ‘‘(dd) including a trend 

20 analysis concerning the impact of 

21 reviews and placements of pro22 curement center representatives 

23 and breakout procurement center 

24 representatives. 


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1 ‘‘(ii) TIMELY REVIEW OF BUNDLED

2 CONTRACTS.—Not later than 30 days after 

3 receiving a submission from a Federal 

4 agency, the Administrator shall review any 

5 potential bundled contract submitted to the 

6 Administrator for review by any Federal 

7 agency. 

8 ‘‘(9) CONTRACT BUNDLING MITIGATION

9 THROUGH SUBCONTRACTING.—A commercial market 

10 representative may not be assigned by the Adminis11 trator to provide services for more than 2 States.’’. 

12 (b) TECHNICAL CORRECTION.—Section 15(g) of the 

13 Small Business Act (15 U.S.C. 644(g)) is amended by 

14 striking ‘‘Administrator of the Office of Federal Procure15 ment Policy’’ each place such term appears and inserting 

16 ‘‘Administrator for Federal Procurement Policy’’. 

17 (c) PROCUREMENT CENTER REPRESENTATIVES.— 

18 Section 15(l) of the Small Business Act (15 U.S.C. 644(l)) 

19 is amended— 

20 (1) by striking paragraph (1) and inserting the 

21 following: 

22 ‘‘(1)(A) A procurement center representative shall 

23 carry out the activities described in paragraph (2), and 

24 shall be an advocate for— 


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1 ‘‘(i) the maximum practicable utilization of 

2 small business concerns, whenever appropriate; and 

3 ‘‘(ii) the use of full and open competition, 

4 whenever appropriate, for the procurement of sup5 plies and services by the procurement center. 

6 ‘‘(B) A procurement center representative is author7 ized to assist contracting officers in the performance of 

8 market research in order to locate small business con9 cerns, small business concerns owned and controlled by so10 cially and economically disadvantaged individuals, small 

11 business concerns owned and controlled by women, small 

12 business concerns owned and controlled by service-disabled 

13 veterans, small business concerns owned and controlled by 

14 veterans, and HUBZone small business concerns capable 

15 of satisfying agency needs. 

16 ‘‘(C) Any procurement center representative assigned 

17 under this paragraph shall be in addition to the represent18 ative referred to in subsection (k).’’; 

19 (2) in paragraph (2)— 

20 (A) by striking ‘‘breakout’’ each place that term 

21 appears; 

22 (B) in subparagraph (F), by striking ‘‘and’’ at 

23 the end; 

24 (C) in subparagraph (G), by striking the period 

25 at the end and inserting a semicolon; and 


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1 (D) by adding at the end the following: 

2 ‘‘(H)(i) identify and review solicitations that in3 volve contract consolidations for potential bundling 

4 of contract requirements; and 

5 ‘‘(ii) recommend small business concern partici6 pation as contractors, including small business con7 cern teams, whenever appropriate, prior to the 

8 issuance of a solicitation described in clause (i); 

9 ‘‘(I) manage the activities of the breakout pro10 curement center representative, commercial mar11 keting representative, and technical assistant; and 

12 ‘‘(J) submit an annual report to the Adminis13 trator containing— 

14 ‘‘(i) the number of proposed solicitations 

15 reviewed; 

16 ‘‘(ii) the contract recommendations made 

17 on behalf of small business concerns; 

18 ‘‘(iii) the number and total amount of con19 tracts broken out from bundled or consolidated 

20 contracts for full and open competition or small 

21 business concern set-aside; and 

22 ‘‘(iv) the number and total amount of con23 tract dollars awarded to small business con24 cerns as a result of actions taken by the pro25 curement center office.’’; 


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1 (3) by redesignating paragraphs (4) through 

2 (7) as paragraphs (5) through (8), respectively; 

3 (4) by striking paragraph (3) and inserting the 

4 following: 

5 ‘‘(3)(A) The Administrator may assign a breakout 

6 procurement center representative, which shall be in addi7 tion to any representative assigned under paragraph (1). 

8 ‘‘(B) A breakout procurement center representa9 tive— 

10 ‘‘(i) shall be an advocate for the breakout of 

11 items for procurement through full and open com12 petition or small business concern set-aside, when13 ever appropriate, from new, existing, bundled, or 

14 consolidated contracts; and 

15 ‘‘(ii) is authorized— 

16 ‘‘(I) to recommend small business concern 

17 participation in existing contracts that were 

18 previously not reviewed for small business con19 cern participation; 

20 ‘‘(II) to perform the duties described in 

21 paragraph (2), as necessary to perform the due 

22 diligence required for a breakout recommenda23 tion; and 


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1 ‘‘(III) to appeal the failure to act favorably 

2 on any recommendation made under subclause 

3 (I). 

4 ‘‘(C) Any appeal under subparagraph 

5 (B)(ii)(III) shall be filed and processed in the same 

6 manner and subject to the same conditions and limi7 tations as an appeal filed by the Administrator 

8 under subsection (a). 

9 ‘‘(4)(A) The Administrator may assign a commercial 

10 marketing representative to identify and market small 

11 business concerns to large prime contractors and assist 

12 small business concerns in identifying and obtaining sub13 contracts. 

14 ‘‘(B) A commercial marketing representative as15 signed under this paragraph shall— 

16 ‘‘(i) conduct compliance reviews of prime con17 tractors; 

18 ‘‘(ii) counsel small business concerns on how to 

19 obtain subcontracts; 

20 ‘‘(iii) conduct matchmaking activities to facili21 tate subcontracting to small business concerns; 

22 ‘‘(iv) work in coordination with local small busi23 ness development centers, technical assistance cen24 ters, and other regional economic development entiVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00209 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 ties to identify small business concerns capable of 

2 competing for Federal contracts; and 

3 ‘‘(v) provide orientation and training on the 

4 subcontracting assistance program under section 

5 8(d)(4)(E) for both large and small business con6 cerns. 

7 ‘‘(C) Any commercial marketing representative as8 signed under this paragraph shall be in addition to any 

9 procurement center representative assigned under para10 graph (1) or (3).’’; 

11 (5) in paragraph (5), as so designated by this 

12 section— 

13 (A) in the second sentence, by inserting 

14 ‘‘the procurement center representative and’’ 

15 before ‘‘the breakout procurement’’; and 

16 (B) in the third sentence, by striking 

17 ‘‘(6)’’; 

18 (6) in paragraph (6), as so designated by this 

19 section— 

20 (A) in subparagraph (A), by striking ‘‘The 

21 breakout procurement center representative’’ 

22 and inserting the following: ‘‘The procurement 

23 center representative, breakout procurement 

24 center representative, commercial marketing 

25 representative,’’; 


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1 (B) by striking subparagraph (B); and 

2 (C) by redesignating subparagraph (C) as 

3 subparagraph (B); 

4 (7) in paragraph (7), as so designated by this 

5 section, by striking ‘‘other than commercial items’’ 

6 and all that follows through the end of the para7 graph and inserting the following: ‘‘commercial 

8 items for authorized resale, or other than commer9 cial items, and which has the potential to incur sig10 nificant savings or create significant procurement 

11 opportunities for small business concerns as the re12 sult of the placement of a breakout procurement 

13 center representative.’’; and 

14 (8) in paragraph (8), as so designated by this 

15 section— 

16 (A) by striking ‘‘breakout’’ each place the 

17 term appears; and 

18 (B) by adding at the end the following: 

19 ‘‘(C) The procurement center representative shall 

20 conduct training sessions to inform procurement staff at 

21 Federal agencies about the reporting requirements for 

22 bundled contracts and potentially bundled contracts, and 

23 how to work effectively with the procurement center rep24 resentative assigned to such agencies to locate capable 


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1 small business concerns to meet the needs of the agen2 cies.’’. 

3 SEC. 1003. REMOVAL OF IMPEDIMENTS TO CONTRACT BUN4 DLING DATABASE IMPLEMENTATION. 

5 Section 15(p)(5)(B) of the Small Business Act (15 

6 U.S.C. 644(p)(5)(B) is amended by striking ‘‘procurement 

7 information’’ and all that follows through the end of the 

8 subparagraph and inserting the following: ‘‘any relevant 

9 procurement information as may be required to implement 

10 this section, and shall perform, at the request of the Ad11 ministrator, any other action necessary to enable comple12 tion of the contract bundling database authorized by this 

13 section by not later than 270 days after the date of enact14 ment of the Small Business Reauthorization and Improve15 ments Act of 2006.’’. 

16 TITLE XI—SUBCONTRACTING 

17 INTEGRITY 

18 SEC. 1101. GAO RECOMMENDATIONS ON SUBCONTRACTING 

19 MISREPRESENTATIONS. 

20 Section 8 of the Small Business Act (15 U.S.C. 637) 

21 is amended by adding at the end the following: 

22 ‘‘(o) PREVENTION OF MISREPRESENTATIONS IN

23 SUBCONTRACTING; IMPLEMENTATION OF COMPTROLLER

24 GENERAL’S RECOMMENDATIONS.— 


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1 ‘‘(1) STATEMENT OF POLICY.—It is the policy 

2 of Congress that the recommendations of the Comp3 troller General of the United States in Report No. 

4 05–459, concerning oversight improvements nec5 essary to ensure maximum practicable participation 

6 by small business concerns in subcontracting, shall 

7 be implemented governmentwide, to the maximum 

8 extent possible. 

9 ‘‘(2) CONTRACTOR COMPLIANCE.—Compliance 

10 of Federal prime contractors with small business 

11 subcontracting plans shall be evaluated as a percent12 age of obligated prime contract dollars, as well as a 

13 percentage of subcontracts awarded. 

14 ‘‘(3) ISSUANCE OF AGENCY POLICIES.—Not 

15 later than 180 days after the date of enactment of 

16 this subsection, the head of each Federal agency 

17 shall issue a policy on small business subcontracting 

18 compliance, including assignment of compliance re19 sponsibilities between contracting, small business, 

20 and program offices and periodic oversight and re21 view activities.’’. 


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1 SEC. 1102. SMALL BUSINESS SUBCONTRACTING BAIT-AND2 SWITCH FRAUD. 

3 (a) CERTIFICATIONS REQUIRED.—Section 8(d)(6) of 

4 the Small Business Act (15 U.S.C. 637(d)(6)) is amend5 ed— 

6 (1) in subparagraph (E), by striking ‘‘and’’ at 

7 the end; 

8 (2) in subparagraph (F), by striking the period 

9 at the end and inserting ‘‘; and’’; and 

10 (3) by adding at the end, the following: 

11 ‘‘(G) certification that the offeror or bidder 

12 will acquire articles, equipment, supplies, serv13 ices, or materials, or obtain the performance of 

14 construction work from small business concerns 

15 in the amount and quality used in preparing 

16 and submitting to the contracting agency the 

17 bid or proposal, unless such small business con18 cerns are no longer in business or can no longer 

19 meet the quality, quantity, or delivery date.’’. 

20 (b) PENALTIES FOR FALSE CERTIFICATIONS.—Sec21 tion 16(f) of the Small Business Act (15 U.S.C. 645(f)) 

22 is amended by striking ‘‘of this Act’’ and inserting ‘‘or 

23 the reporting requirements of section 8(d)(11)’’. 


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1 SEC. 1103. EVALUATING SUBCONTRACTING PARTICIPA2 TION. 

3 (a) SIGNIFICANT FACTORS.—Section 8(d)(4)(G) of 

4 the Small Business Act (15 U.S.C. 637(d)(4)(G)) is 

5 amended by striking ‘‘a bundled’’ and inserting ‘‘any’’. 

6 (b) EVALUATION REPORTS.—Section 8(d)(10) of the 

7 Small Business Act (15 U.S.C. 637(d)(10)) is amended— 

8 (1) by striking ‘‘is authorized to’’ and inserting 

9 ‘‘shall’’; 

10 (2) in subparagraph (B), by striking ‘‘and’’ at 

11 the end; 

12 (3) in subparagraph (C), by striking the period 

13 at the end and inserting ‘‘; and’’; and 

14 (4) by adding at the end the following: 

15 ‘‘(D) report the results of each evaluation 

16 under subparagraph (C) to the appropriate con17 tracting officers.’’. 

18 (c) CENTRALIZED DATABASE; PAYMENTS PENDING

19 REPORTS.—Section 8(d) of the Small Business Act (15 

20 U.S.C. 637(d)) is amended— 

21 (1) by redesignating paragraph (11) as para22 graph (14); and 

23 (2) by inserting after paragraph (10) the fol24 lowing: 

25 ‘‘(11) CERTIFICATION.—A report submitted by 

26 the prime contractor under paragraph (6)(E) to deVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00215 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 termine the attainment of a subcontract utilization 

2 goal under any subcontracting plan entered into 

3 with a Federal agency under this subsection shall 

4 contain the name and signature of the president or 

5 chief executive officer of the contractor, certifying 

6 that the subcontracting data provided in the report 

7 are accurate and complete. 

8 ‘‘(12) CENTRALIZED DATABASE.—The results 

9 of an evaluation under paragraph (10)(C) shall be 

10 included in a national centralized governmentwide 

11 database. 

12 ‘‘(13) PAYMENTS PENDING REPORTS.—Each 

13 Federal agency having contracting authority shall 

14 ensure that the terms of each contract for goods and 

15 services includes a provision allowing the contracting 

16 officer of an agency to withhold an appropriate 

17 amount of payment with respect to a contract (de18 pending on the size of the contract) until the date 

19 of receipt of complete, accurate, and timely subcon20 tracting reports in accordance with paragraph 

21 (11).’’. 


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1 SEC. 1104. PILOT PROGRAM ON DIRECT PAYMENTS TO SUB2 CONTRACTORS. 

3 (a) IN GENERAL.—Section 8(d) of the Small Busi4 ness Act (15 U.S.C. 637(d)), as amended by this Act, is 

5 amended by adding at the end the following: 

6 ‘‘(15) TIMELY PAYMENT TO SMALL BUSINESS

7 SUBCONTRACTORS.— 

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), the failure of a civilian agency prime 

10 contractor to make a timely payment, as deter11 mined under the contract with the subcon12 tractor, to a subcontractor that is a small busi13 ness concern shall be a material breach of the 

14 contract with the Federal agency. 

15 ‘‘(B) CONSIDERATION OF PERFORM16 ANCE.—Before making a determination under 

17 subparagraph (A), the contracting officer shall 

18 consider all reasonable issues regarding the cir19 cumstances surrounding the failure to make the 

20 timely payment described in subparagraph (A). 

21 ‘‘(C) WITHHOLDING OF PAYMENTS.—Not 

22 later than 30 days after the date on which a 

23 material breach is determined by the con24 tracting officer under subparagraph (A), the 

25 Federal agency may withhold any amounts due 

26 and owing the subcontractor from payments 


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1 due to the prime contractor and pay such 

2 amounts directly to the subcontractor.’’. 

3 (b) SUNSET.—The amendment made by this section 

4 shall remain in effect during the period beginning on the 

5 date of enactment of this Act and ending on September 

6 30, 2009. 

7 SEC. 1105. PILOT PROGRAM. 

8 Section 8 of the Small Business Act (15 U.S.C. 637), 

9 as amended by this Act, is amended by adding at the end 

10 the following: 

11 ‘‘(p) SUBCONTRACTING INCENTIVES AND REMEDIAL

12 ASSISTANCE.— 

13 ‘‘(1) PILOT PROGRAM ON INCENTIVES AND

14 MENTOR-PROTE ́GE ́ REMEDIAL ASSISTANCE.— 

15 ‘‘(A) IN GENERAL.—Each Federal agency 

16 on the President’s Management Council, or any 

17 successor thereof, is authorized to operate a 

18 pilot program to provide contractual incentives 

19 to prime contractors that exceed their small 

20 business subcontracting goals and to direct 

21 prime contractors that fail to comply with their 

22 small business subcontracting plans to fund 

23 mentor-prote ́ge ́ assistance for small business 

24 concerns (in this subsection referred to as the 

25 ‘program’). 


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1 ‘‘(B) TERMINATION.—The authority under 

2 this paragraph shall terminate on September 

3 30, 2009. 

4 ‘‘(2) ASSESSMENT OF MENTOR-PROTE ́GE ́ AS5 SISTANCE FUNDING.—The mentor-prote ́ge ́ assistance 

6 funding assessed by an agency under the terms of 

7 the program shall be determined in relation to the 

8 dollar amount by which the prime contractor failed 

9 its small business subcontracting goals. 

10 ‘‘(3) EXPENDITURE OF MENTOR-PROTE ́GE ́ AS11 SISTANCE FUNDING.—The prime contractor shall ex12 pend the mentor-prote ́ge ́ assistance funding assessed 

13 by the agency under the terms of the program on 

14 mentor-prote ́ge ́ assistance to small business con15 cerns, as provided by a mentor-prote ́ge ́ agreement 

16 approved by the relevant Federal agency. 

17 ‘‘(4) ANNUAL REPORT REQUIRED.—Each Fed18 eral agency described in paragraph (1) shall submit 

19 an annual report to the Committee on Small Busi20 ness and Entrepreneurship of the Senate and the 

21 Committee on Small Business of the House of Rep22 resentatives containing a detailed description of the 

23 pilot program, as carried out by that agency, includ24 ing the number of participating companies, any in25 centives provided to prime contractors, as approVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00219 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 priate, and the amounts and types of mentor-prote ́ge ́

2 assistance provided to small business concerns.’’. 

3 TITLE XII—SMALL BUSINESS 

4 PROCUREMENT PROGRAMS 

5 IMPROVEMENT 

6 SEC. 1201. DEFINITIONS. 

7 In this title— 

8 (1) the term ‘‘small business concern owned 

9 and controlled by service-disabled veterans’’ has the 

10 same meaning as in section 3 of the Small Business 

11 Act (15 U.S.C. 632); and 

12 (2) the terms ‘‘small business concern owned 

13 and controlled by socially and economically disadvan14 taged individuals’’ and ‘‘small business concern 

15 owned and controlled by women’’ have the same 

16 meanings as in section 8(d) of the Small Business 

17 Act (15 U.S.C. 637(d)). 

18 Subtitle A—HUBZone Program 

19 SEC. 1211. HUBZONE REAUTHORIZATION. 

20 Section 31(d) of the Small Business Act (15 U.S.C. 

21 657a(d)) is amended by striking ‘‘each of fiscal years 2004 

22 through 2006’’ and inserting ‘‘each of fiscal years 2006 

23 through 2012’’. 


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1 SEC. 1212. EQUITY FOR SUBURBAN HUBZONES. 

2 Section 3(p)(4) of the Small Business Act (15 U.S.C. 

3 632(p)(4)) is amended by adding at the end the following: 

4 ‘‘(E) QUALIFIED SUBURBAN AREA.—The 

5 term ‘qualified suburban area’ means any vil6 lage, city, town, economic development area 

7 governed by a public authority, district, or 

8 other unit of general local government— 

9 ‘‘(i) located in a county that includes, 

10 or is located in, a metropolitan statistical 

11 area (as defined in section 143(k)(2)(B) of 

12 the Internal Revenue Code of 1986); and 

13 ‘‘(ii) that meets the income or unem14 ployment qualifications under subpara15 graph (B)(ii).’’. 

16 Subtitle B—Service-Disabled Vet17 eran-Owned Small Business 

18 Program 

19 SEC. 1221. CERTIFICATION. 

20 (a) CONGRESSIONAL INTENT.—It is the intent of 

21 Congress that the Administrator should accept certifi22 cations by other Federal agencies and State and local gov23 ernments and certifications from responsible national cer24 tifying entities, under such criteria as the Administrator 

25 may prescribe, by regulation or order, in certifying small 


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1 business concerns owned and controlled by service-disabled 

2 veterans. 

3 (b) REGULATIONS.—Before implementing subsection 

4 (a), the Administrator shall promulgate regulations or or5 ders ensuring appropriate certification safeguards to be 

6 implemented by the Administration and the agencies and 

7 entities described in subsection (a). 

8 SEC. 1222. TEMPORARY WAIVER. 

9 (a) IN GENERAL.—Notwithstanding any other provi10 sion of law, section 36(a)(1) of the Small Business Act 

11 (15 U.S.C. 657f(a)(1)) does not apply to the award of a 

12 contract to a small business concern owned and controlled 

13 by service-disabled veterans during the period beginning 

14 on the date of enactment of this Act and ending on Sep15 tember 30, 2009, except for the requirement that the con16 cern be determined to be a responsible contractor with re17 spect to performance of such contract opportunity. 

18 (b) REPORT TO CONGRESS.—The Administrator shall 

19 submit to Congress an annual report concerning the im20 pact of the temporary waiver authority under subsection 

21 (a) on contract awards for small businesses owned and 

22 controlled by service-disabled veterans. 


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1 SEC. 1223. TRANSITION PERIOD FOR SURVIVING SPOUSES 

2 OR PERMANENT CARE GIVERS. 

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

4 632(q)(2)) is amended by striking subparagraph (B) and 

5 inserting the following: 

6 ‘‘(B) the management and daily business 

7 operations of which are controlled— 

8 ‘‘(i) by 1 or more service-disabled vet9 erans or, in the case of a veteran with per10 manent and severe disability, the spouse or 

11 permanent care giver of such veteran; or 

12 ‘‘(ii) for a period of not longer than 

13 10 years after the death of a service-dis14 abled veteran, by a surviving spouse or 

15 permanent caregiver thereof.’’. 

16 SEC. 1224. CONTRACTING AUTHORITY. 

17 Section 36(a) of the Small Business Act (15 U.S.C. 

18 657f(a)) is amended in the matter preceding paragraph 

19 (1), by striking ‘‘may’’ and inserting ‘‘shall’’. 

20 Subtitle C—Women-Owned Small 

21 Business Program 

22 SEC. 1231. IMPLEMENTATION DEADLINE. 

23 Not later than 90 days after the date of enactment 

24 of this Act, the Administrator shall implement the pro25 curement program for small business concerns owned and 


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1 controlled by women under section 8(m) of the Small 

2 Business Act (15 U.S.C. 637(m)). 

3 SEC. 1232. CERTIFICATION. 

4 (a) CONGRESSIONAL INTENT.—It is the intent of 

5 Congress that the Administrator should accept certifi6 cations by other Federal agencies and State and local gov7 ernments and certifications from responsible national cer8 tifying entities, under such criteria as the Administrator 

9 may prescribe, by regulation or order, in certifying small 

10 business concerns owned and controlled by women for pur11 poses of the program under section 8(m) of the Small 

12 Business Act (15 U.S.C. 637(m)). 

13 (b) REGULATIONS.—Prior to implementing sub14 section (a), the Administrator shall promulgate regula15 tions ensuring appropriate certification safeguards to be 

16 implemented by the Administration and the agencies and 

17 entities described in subsection (a). 

18 Subtitle D—Small Disadvantaged 

19 Business Program 

20 SEC. 1241. CERTIFICATION. 

21 (a) CONGRESSIONAL INTENT.—It is the intent of 

22 Congress that the Administrator should accept certifi23 cations by other Federal agencies and State and local gov24 ernments and certifications from responsible national cer25 tifying entities, under such criteria as the Administrator 


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1 may prescribe, by regulation or order, in certifying small 

2 business concerns owned and controlled by socially and 

3 economically disadvantaged individuals. 

4 (b) REGULATIONS.—Prior to implementing sub5 section (a), the Administrator shall promulgate regula6 tions or orders ensuring appropriate certification safe7 guards to be implemented by the Administration and the 

8 agencies and entities described in subsection (a). 

9 SEC. 1242. NET WORTH THRESHOLD. 

10 Section 8(a)(6)(A) of the Small Business Act (15 

11 U.S.C. 637(a)(6)(A)) is amended— 

12 (1) by inserting ‘‘(i)’’ after ‘‘(6)(A)’’; 

13 (2) by striking ‘‘In determining the degree of 

14 diminished credit’’ and inserting the following: 

15 ‘‘(ii)(I) In determining the degree of diminished cred16 it’’; 

17 (3) by striking ‘‘In determining the economic 

18 disadvantage’’ and inserting the following: 

19 ‘‘(iii) In determining the economic disadvantage’’; 

20 and 

21 (4) by inserting after clause (ii)(I), as so des22 ignated by this section, the following: 

23 ‘‘(II) The Administrator shall establish procedures 

24 that— 


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1 ‘‘(aa) account for inflationary adjustments to, 

2 and include a reasonable assumption of, the average 

3 income and net worth of market dominant competi4 tors; and 

5 ‘‘(bb) require an annual inflationary adjustment 

6 to the average income and net worth requirements 

7 under this subsection.’’. 

8 Subtitle E—BusinessLINC Program 

9 SEC. 1251. BUSINESSLINC PROGRAM. 

10 Section 8(n) of the Small Business Act (15 U.S.C. 

11 637(n)) is amended to read as follows: 

12 ‘‘(n) BUSINESS GRANTS AND COOPERATIVE AGREE13 MENTS.— 

14 ‘‘(1) IN GENERAL.—In accordance with this 

15 subsection, the Administrator shall make grants 

16 available to enter into cooperative agreements with 

17 any coalition of private entities, not-for-profit enti18 ties, public entities, or any combination of private, 

19 not-for-profit, and public entities— 

20 ‘‘(A) to expand business-to-business rela21 tionships between large and small business con22 cerns; and 

23 ‘‘(B) to provide, directly or indirectly, with 

24 online information and a database of companies 

25 that are interested in mentor-prote ́ge ́ programs 


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1 or community-based, statewide, or local busi2 ness development programs. 

3 ‘‘(2) MATCHING REQUIREMENT.—The Adminis4 trator may make a grant to a coalition under para5 graph (1) only if the coalition provides for activities 

6 described in paragraph (1)(A) or (1)(B) an amount, 

7 either in-kind or in cash, equal to the grant amount. 

8 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

9 There is authorized to be appropriated to carry out 

10 this subsection $3,000,000 for each of fiscal years 

11 2007 through 2009, to remain available until ex12 pended. 

13 ‘‘(4) REPORTS TO CONGRESS.— 

14 ‘‘(A) IN GENERAL.—Not later than April 

15 30, 2007, and annually thereafter, the Asso16 ciate Administrator of Business Development of 

17 the Administration shall collect data on the 

18 BusinessLINC Program and submit to the 

19 Committee on Small Business and Entrepre20 neurship of the Senate and the Committee on 

21 Small Business of the House of Representa22 tives, a report on the effectiveness of the 

23 BusinessLINC Program. 


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1 ‘‘(B) CONTENTS.—Each report submitted 

2 under subparagraph (A) shall include, for the 

3 year covered by the report— 

4 ‘‘(i) the number of programs adminis5 tered in each State under the 

6 BusinessLINC Program; 

7 ‘‘(ii) the number of grant awards 

8 under each program described in clause (i) 

9 and the date of each such award; 

10 ‘‘(iii) the number of participating 

11 large businesses and participating small 

12 business concerns; 

13 ‘‘(iv) the number and dollar amount 

14 of the contracts in effect in each State as 

15 a result of the programs run by each grant 

16 recipient under the BusinessLINC Pro17 gram; and 

18 ‘‘(v) the number of mentor-prote ́ge ́, 

19 teaming relationships, or partnerships cre20 ated as a result of the BusinessLINC Pro21 gram. 

22 ‘‘(5) DEFINITION.—In this subsection, the term 

23 ‘BusinessLINC Program’ means the grant program 

24 authorized under paragraph (1).’’. 


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1 TITLE XIII—ACQUISITION 

2 PROCESS 

3 SEC. 1301. PROCUREMENT IMPROVEMENTS. 

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

5 644), as amended by this Act, is amended by adding at 

6 the end the following: 

7 ‘‘(r) BUNDLING DATA FIELDS.—For each contract 

8 (including task or delivery orders against governmentwide 

9 or other multiple award contracts, indefinite quantity or 

10 indefinite delivery contracts, and blanket purchase agree11 ments) that is bundled or consolidated, an agency shall 

12 report publicly, not later than 7 days after the date of 

13 the award, by means of the Federal governmentwide pro14 curement data system described in subsection (c)(5)— 

15 ‘‘(1) the number of contracts involving small 

16 business concerns that were displaced by the bun17 dled or consolidated action; 

18 ‘‘(2) the number of small business concerns 

19 that the contracting officer identified as able to bid 

20 on all or part of requirements; and 

21 ‘‘(3) the projected cost savings anticipated as a 

22 result of bundling or consolidating the requirements. 

23 ‘‘(s) GOVERNMENTWIDE SMALL BUSINESS TRAIN24 ING.—The Administrator, in conjunction with the head of 

25 any other appropriate Federal agency, shall coordinate the 


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1 development of governmentwide training courses on small 

2 business contracting and subcontracting with small busi3 ness concerns, with special focus on the role of the small 

4 business specialist as a vital part of the acquisition team.’’. 

5 SEC. 1302. RESERVATION OF PRIME CONTRACT AWARDS 

6 FOR SMALL BUSINESSES. 

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

8 644), as amended by this Act, is amended by adding at 

9 the end the following: 

10 ‘‘(t) MULTIPLE AWARD CONTRACTS.—Not later than 

11 180 days after the date of enactment of this subsection, 

12 the head of each Federal agency, with the concurrence of 

13 the Administrator, shall, by regulation, establish criteria 

14 for such agency— 

15 ‘‘(1) setting aside part or parts of a multiple 

16 award contract for small business concerns, includ17 ing the subcategories of small business concerns 

18 identified in subsection (g)(2); 

19 ‘‘(2) setting aside multiple award contracts for 

20 small business concerns, including the subcategories 

21 of small business concerns identified in subsection 

22 (g)(2); and 

23 ‘‘(3) reserving 1 or more contract awards for 

24 small business concerns under full and open multiple 

25 award procurements, including the subcategories of 


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1 small business concerns identified in subsection 

2 (g)(2).’’. 

3 SEC. 1303. GAO STUDY OF REPORTING SYSTEMS. 

4 (a) STUDY REQUIRED.—The Comptroller General of 

5 the United States shall conduct a study of— 

6 (1) the accuracy and timeliness of data col7 lected under the Small Business Act (15 U.S.C. 631 

8 et seq.) in the Pro-Net database of the Administra9 tion, or any successor database, the Federal procure10 ment data system described in section 15(c)(5) of 

11 the Small Business Act (15 U.S.C. 644(c)(5)), and 

12 the Subcontracting Reporting System; and 

13 (2) the availability of small business informa14 tion in these computer-based systems to Congress, 

15 Federal agencies, and the public. 

16 (b) MATTERS COVERED.—The study conducted 

17 under subsection (a) shall include— 

18 (1) an assessment of the accuracy and timeli19 ness of the information provided by the data collec20 tion systems described in subsection (a)(1) and rec21 ommendations as to how any deficiencies in such 

22 systems can be eliminated; 

23 (2) a review of the system manuals for such 

24 systems and a determination of the adequacy of such 


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1 manuals in assisting proper operation and adminis2 tration of the systems; 

3 (3) a review of the user manuals for such sys4 tems and a determination of the clarity and ease of 

5 use of such manuals in assisting those reporting into 

6 such systems and those obtaining information from 

7 such systems; 

8 (4) the adequacy of the training given to indi9 viduals responsible for reporting into such systems 

10 and recommendations for any necessary improve11 ments; 

12 (5) an assessment of the adequacy of any safe13 guards in such systems against the reporting of in14 accurate and untimely data and the need for any ad15 ditional safeguards; and 

16 (6) the system architecture, Internet access, 

17 user-friendly characteristics, flexibility to add new 

18 data fields, ability to provide structured and 

19 unstructured reports, range of information necessary 

20 to meet user needs, and adequacy of system and 

21 user manuals and instructions of such systems. 

22 (c) REPORT.—Not later than November 30, 2007, 

23 the Comptroller General shall submit to the Committee 

24 on Small Business and Entrepreneurship of the Senate 

25 and the Committee on Small Business of the House of 


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1 Representatives a report containing the results of the 

2 study under this section. 

3 SEC. 1304. MEETING SMALL BUSINESS GOALS. 

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

5 644), as amended by this Act, is amended by adding at 

6 the end the following: 

7 ‘‘(u) MEETING SMALL BUSINESS GOALS.—Before 

8 setting aside a contract for small business concerns, Fed9 eral agency contracting officers shall consider setting aside 

10 the contract for small business concerns owned and con11 trolled by service disabled veterans, qualified HUBZone 

12 small business concerns, small business concerns owned 

13 and controlled by socially and economically disadvantaged 

14 individuals, small business concerns owned and controlled 

15 by women, or any other subcategory of small business con16 cerns for which goals may be established by law, regula17 tion, or policy, in the order in which the goals for such 

18 subcategories of small business concerns under subsection 

19 (g)(2) were not met by the agency in the fiscal year before 

20 the fiscal year of such consideration, from the most defi21 cient to the least deficient.’’. 

22 SEC. 1305. MICROPURCHASE GUIDELINES. 

23 Not later than 180 days after the date of enactment 

24 of this Act, the Director of the Office of Management and 

25 Budget shall issue guidelines regarding the analysis of 


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1 purchase card expenditures to identify opportunities for 

2 achieving and accurately measuring fair participation of 

3 small business concerns in micropurchases, consistent with 

4 the national policy on small business participation in Fed5 eral procurements set forth in sections 2(a) and 15(g) of 

6 the Small Business Act (15 U.S.C. 631(a) and 644(g)), 

7 and dissemination of best practices for participation of 

8 small business concerns in micropurchases. 

9 SEC. 1306. REPORTING ON OVERSEAS CONTRACTS. 

10 At the end of each fiscal year, the Administrator shall 

11 submit to Congress a report identifying what portion of 

12 contracts and subcontracts awarded for performance out13 side of the United States were awarded to small business 

14 concerns. 

15 SEC. 1307. AGENCY ACCOUNTABILITY. 

16 (a) IN GENERAL.—Section 15(g)(2) of the Small 

17 Business Act (15 U.S.C. 644(g)(2)) is amended— 

18 (1) by inserting ‘‘(A)’’ after ‘‘(2)’’; 

19 (2) in the first sentence, by striking ‘‘shall, 

20 after consultation’’ and inserting the following: 

21 ‘‘shall— 

22 ‘‘(i) after consultation’’; 

23 (3) by striking ‘‘agency. Goals established’’ and 

24 inserting the following: ‘‘agency; 


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1 ‘‘(ii) identify a percentage of the procurement 

2 budget of the agency to be awarded to small busi3 ness concerns, in consultation with the Office of 

4 Small and Disadvantaged Business Utilization of the 

5 agency, which information shall be included in the 

6 strategic plan required under section 306 of title 5, 

7 United States Code, and the annual budget submis8 sion to Congress by that agency, and, upon request, 

9 in any testimony provided by that agency before 

10 Congress in connection with the budget process; and 

11 ‘‘(iii) report, as part of its annual performance 

12 plan, the extent to which the agency achieved the 

13 goals referred to in clause (ii), and appropriate jus14 tification for any failure to do so. 

15 ‘‘(B) Goals established’’; 

16 (4) by striking ‘‘Whenever’’ and inserting the 

17 following: 

18 ‘‘(C) Whenever’’; 

19 (5) by striking ‘‘For the purpose of’’ and insert20 ing the following: 

21 ‘‘(D) For the purpose of’’; 

22 (6) in the last sentence— 

23 (A) by striking ‘‘(A) contracts’’ and insert24 ing ‘‘(i) contracts’’; and 


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1 (B) by striking ‘‘(B) contracts’’ and insert2 ing ‘‘(ii) contracts’’; and 

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

4 ‘‘(E)(i) Each procurement employee described in 

5 clause (ii)— 

6 ‘‘(I) shall communicate to their subordinates 

7 the importance of achieving small business goals; 

8 and 

9 ‘‘(II) shall have as an annual performance eval10 uation factor, where appropriate, the success of that 

11 procurement employee in small business utilization, 

12 in accordance with the goals established under this 

13 subsection. 

14 ‘‘(ii) A procurement employee described in this clause 

15 is a senior procurement executive, senior program man16 ager, or small and disadvantaged business utilization man17 ager of a Federal agency having contracting authority.’’. 

18 (b) ANNUAL REPORTS.—Section 10(d) of the Small 

19 Business Act (15 U.S.C. 639(d)) is amended— 

20 (1) by inserting ‘‘and each agency that is a 

21 member of the President’s Management Council (or 

22 any successor thereto)’’ after ‘‘Department of De23 fense’’ the first place that term appears; and 


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1 (2) by inserting ‘‘or that agency’’ after ‘‘De2 partment of Defense’’ the second place that term ap3 pears. 

4 TITLE XIV—SMALL BUSINESS 

5 SIZE AND STATUS INTEGRITY 

6 SEC. 1401. POLICY AND PRESUMPTIONS. 

7 Section 3 of the Small Business Act (15 U.S.C. 632) 

8 is amended by adding at the end the following: 

9 ‘‘(s) PRESUMPTION.— 

10 ‘‘(1) IN GENERAL.—In every contract, sub11 contract, cooperative agreement, cooperative re12 search and development agreement, or grant which 

13 is set aside, reserved, or otherwise classified as in14 tended for award to small business concerns, there 

15 shall be a presumption of loss to the United States 

16 based on the total dollars expended on such con17 tract, subcontract, cooperative agreement, coopera18 tive research and development agreement, or grant 

19 whenever it is established that a business concern 

20 other than a small business concern willfully sought 

21 and received the award by misrepresentation. 

22 ‘‘(2) DEEMED CERTIFICATIONS.—The following 

23 actions shall be deemed affirmative, willful, and in24 tentional certifications of small business size and 

25 status: 


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1 ‘‘(A) Submission of a bid or proposal for a 

2 Federal grant, contract, subcontract, coopera3 tive agreement, or cooperative research and de4 velopment agreement reserved, set aside, or oth5 erwise classified as intended for award to small 

6 business concerns. 

7 ‘‘(B) Submission of a bid or proposal for 

8 a Federal grant, contract, subcontract, coopera9 tive agreement, or cooperative research and de10 velopment agreement which in any way encour11 ages a Federal agency to classify such bid or 

12 proposal, if awarded, as an award to a small 

13 business concern. 

14 ‘‘(C) Registration on any Federal elec15 tronic database for the purpose of being consid16 ered for award of a Federal grant, contract, 

17 subcontract, cooperative agreement, or coopera18 tive research agreement, as a small business 

19 concern. 

20 ‘‘(3) PAPER-BASED CERTIFICATION BY SIGNA21 TURE OF RESPONSIBLE OFFICIAL.— 

22 ‘‘(A) IN GENERAL.—Each solicitation, bid, 

23 or application for a Federal contract, sub24 contract, or grant shall contain a certification 

25 concerning the small business size and status of 


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1 a business concern seeking such Federal con2 tract, subcontract, or grant. 

3 ‘‘(B) CONTENT OF CERTIFICATIONS.—A 

4 certification that a business concern qualifies as 

5 a small business concern of the exact size and 

6 status claimed by such business concern for 

7 purposes of bidding on a Federal contract or 

8 subcontract, or applying for a Federal grant, 

9 shall contain the signature of a director, officer, 

10 or counsel on the same page on which the cer11 tification is contained. 

12 ‘‘(4) REGULATIONS.—The Administrator shall 

13 promulgate regulations to provide adequate protec14 tions to individuals and business concerns from li15 ability under this subsection in cases of uninten16 tional errors, technical malfunctions, and other simi17 lar situations.’’. 

18 SEC. 1402. ANNUAL CERTIFICATION. 

19 Section 3 of the Small Business Act (15 U.S.C. 632), 

20 as amended by this Act, is amended by adding at the end 

21 the following: 

22 ‘‘(t) ANNUAL CERTIFICATION.— 

23 ‘‘(1) IN GENERAL.—Each business certified as 

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1 priate, its small business status, by means of a con2 firming entry on the Pro-Net database of the Ad3 ministration, or any successor thereto. 

4 ‘‘(2) REGULATIONS.—Not later than 120 days 

5 after the date of enactment of this subsection, the 

6 Administrator, in consultation with the Inspector 

7 General and the Chief Counsel for Advocacy of the 

8 Administration, shall promulgate regulations to en9 sure that— 

10 ‘‘(A) no business concern continues to be 

11 certified as a small business concern on the 

12 Pro-Net database of the Administration, or any 

13 successor thereto, without fulfilling the require14 ments for annual certification under this sub15 section; and 

16 ‘‘(B) the requirements of this subsection 

17 are implemented in a manner presenting the 

18 least possible regulatory burden on small busi19 ness concerns. 

20 ‘‘(3) DETERMINATION OF SIZE STATUS.—Small 

21 business size or status for purposes of this Act shall 

22 be determined at the time of the award of a Fed23 eral— 

24 ‘‘(A) contract, provided that, in the case of 

25 interagency multiple award contracts, small 


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1 business size, or status shall be determined an2 nually, except for purposes of the award of each 

3 task or delivery order set aside or reserved for 

4 small business concerns; 

5 ‘‘(B) subcontract; 

6 ‘‘(C) grant; 

7 ‘‘(D) cooperative agreement; or 

8 ‘‘(E) cooperative research and development 

9 agreement.’’. 

10 SEC. 1403. SBA SUSPENSIONS AND DEBARMENTS AUTHOR11 ITY. 

12 Section 16(d)(2)(C) of the Small Business Act (15 

13 U.S.C. 645(d)(2)(C)) is amended by inserting after ‘‘(or 

14 any successor regulation)’’ the following: ‘‘or as specified 

15 in part 145 of title 13, Code of Federal Regulations (or 

16 any corresponding similar regulation or ruling)’’. 

17 SEC. 1404. MEANINGFUL PROTESTS OF SMALL BUSINESS 

18 SIZE AND STATUS. 

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

20 amended by inserting after section 37, as added by this 

21 Act, the following: 

22 ‘‘SEC. 38. SMALL BUSINESS SIZE AND STATUS PROTEST SYS23 TEM. 

24 ‘‘(a) DEFINITIONS.—In this section: 


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1 ‘‘(1) PROTEST.—The term ‘protest’ means a 

2 written objection by an interested party to a viola3 tion of any small business size or status requirement 

4 established under any provision of law, including 

5 section 3, in connection with— 

6 ‘‘(A) a solicitation or other request by a 

7 Federal agency for offers for a contract for the 

8 procurement of property or services; 

9 ‘‘(B) the cancellation of such a solicitation 

10 or other request; 

11 ‘‘(C) an award or proposed award of such 

12 a contract; or 

13 ‘‘(D) a termination or cancellation of an 

14 award of such a contract, if the written objec15 tion contains an allegation that the termination 

16 or cancellation is based in whole or in part on 

17 improprieties concerning the award of the con18 tract. 

19 ‘‘(2) INTERESTED PARTY.— 

20 ‘‘(A) IN GENERAL.—The term ‘interested 

21 party’, with respect to a contract or a solicita22 tion or other request for offers described in 

23 paragraph (1), means an actual or prospective 

24 bidder or offeror whose direct economic interest 


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1 would be affected by the award of the contract 

2 or by failure to award the contract. 

3 ‘‘(B) INCLUSIONS.—The term ‘interested 

4 party’ includes the official responsible for sub5 mitting the Federal agency tender in a public6 private competition conducted under Office of 

7 Management and Budget Circular A–76 (or any 

8 successor thereto) regarding an activity or func9 tion of a Federal agency performed by more 

10 than 65 full-time equivalent employees of the 

11 Federal agency. 

12 ‘‘(3) FEDERAL AGENCY.—The term ‘Federal 

13 agency’ has the same meaning as in section 102 of 

14 title 40, United States Code. 

15 ‘‘(b) REVIEW OF PROTESTS; EFFECT ON CONTRACTS

16 PENDING DECISION.— 

17 ‘‘(1) IN GENERAL.—Under procedures estab18 lished under subsection (d), the Administrator shall 

19 decide a protest submitted to the Administrator by 

20 an interested party. 

21 ‘‘(2) RECEIPTS OF PROTESTS.— 

22 ‘‘(A) IN GENERAL.—Not later than 1 day 

23 after the receipt of a protest, the Administrator 

24 shall notify the Federal agency involved of the 

25 protest. 


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1 ‘‘(B) AGENCIES.—Except as provided in 

2 subparagraph (C), a Federal agency receiving a 

3 notice of a protested procurement under sub4 paragraph (A) shall submit to the Adminis5 trator a complete report (including all relevant 

6 documents) on the small business size or status 

7 aspects of the protested procurement— 

8 ‘‘(i) not later than 30 days after the 

9 date of the receipt of that notice by the 

10 agency; 

11 ‘‘(ii) if the Administrator, upon a 

12 showing by the Federal agency, determines 

13 (and states the reasons in writing) that the 

14 specific circumstances of the protest re15 quire a longer period, within the longer pe16 riod determined by the Administrator; or 

17 ‘‘(iii) in a case determined by the Ad18 ministrator to be suitable for the express 

19 option under subsection (c)(1)(B), not 

20 later than 20 days after the date of the re21 ceipt of that determination by the agency. 

22 ‘‘(C) EXCEPTIONS.—A Federal agency 

23 need not submit a report to the Administrator 

24 under subparagraph (B) if the agency is noti25 fied by the Administrator before the date on 


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1 which such report is to be submitted that the 

2 protest concerned has been dismissed under 

3 subsection (c)(1)(D). 

4 ‘‘(3) AWARD OF CONTRACTS.— 

5 ‘‘(A) IN GENERAL.—Except as provided in 

6 subparagraph (B), a contract may not be 

7 awarded in any procurement after the Federal 

8 agency has received notice of a protest with re9 spect to such procurement from the Adminis10 trator and while the protest is pending. 

11 ‘‘(B) EXCEPTIONS.—The head of the pro12 curing activity responsible for award of a con13 tract may authorize the award of the contract 

14 (notwithstanding a protest of which the Federal 

15 agency has notice under this section)— 

16 ‘‘(i) upon a written finding that ur17 gent and compelling circumstances which 

18 significantly affect interests of the United 

19 States will not permit waiting for the deci20 sion of the Administrator under this sec21 tion; and 

22 ‘‘(ii) after the Administrator is ad23 vised of that finding. 

24 ‘‘(C) URGENT AND COMPELLING CIR25 CUMSTANCES.—A finding may not be made 


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1 under subparagraph (B)(i), unless the award of 

2 the contract is otherwise likely to occur within 

3 30 days after the making of such finding. 

4 ‘‘(4) PERFORMANCE.— 

5 ‘‘(A) IN GENERAL.—A contractor awarded 

6 a Federal agency contract may, during the pe7 riod described in subparagraph (D), begin per8 formance of the contract and engage in any re9 lated activities that result in obligations being 

10 incurred by the United States under the con11 tract, unless the contracting officer responsible 

12 for the award of the contract withholds author13 ization to proceed with performance of the con14 tract. 

15 ‘‘(B) AUTHORIZATION WITHHELD.—The 

16 contracting officer may withhold an authoriza17 tion to proceed with performance of the con18 tract during the period described in subpara19 graph (D) if the contracting officer determines 

20 in writing that— 

21 ‘‘(i) a protest is likely to be filed with 

22 the Administrator alleging a violation of a 

23 small business size or status requirement; 

24 and 


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1 ‘‘(ii) the immediate performance of 

2 the contract is not in the best interests of 

3 the United States. 

4 ‘‘(C) NOTICE OF PROTEST.— 

5 ‘‘(i) IN GENERAL.—If the Federal 

6 agency awarding the contract receives no7 tice of a protest in accordance with this 

8 subsection during the period described in 

9 subparagraph (D)— 

10 ‘‘(I) the contracting officer may 

11 not authorize performance of the con12 tract to begin while the protest is 

13 pending; or 

14 ‘‘(II) if authorization for contract 

15 performance to proceed was not with16 held in accordance with subparagraph 

17 (B) before receipt of the notice, the 

18 contracting officer shall immediately 

19 direct the contractor to cease perform20 ance under the contract and to sus21 pend any related activities that may 

22 result in additional obligations being 

23 incurred by the United States under 

24 that contract. 


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1 ‘‘(ii) PERFORMANCE.—Performance 

2 and related activities suspended under 

3 clause (i)(II) by reason of a protest may 

4 not be resumed while the protest is pend5 ing. 

6 ‘‘(iii) EXCEPTIONS.—The head of the 

7 procuring activity may authorize the per8 formance of the contract (notwithstanding 

9 a protest of which the Federal agency has 

10 notice under this section)— 

11 ‘‘(I) upon a written finding 

12 that— 

13 ‘‘(aa) performance of the 

14 contract is in the best interests 

15 of the United States; or 

16 ‘‘(bb) urgent and compelling 

17 circumstances that significantly 

18 affect interests of the United 

19 States will not permit waiting for 

20 the decision of the Administrator 

21 concerning the protest; and 

22 ‘‘(II) after the Administrator is 

23 notified of that finding. 

24 ‘‘(D) TIME PERIOD.—The period described 

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1 tract, is the period beginning on the date of the 

2 contract award and ending on the later of— 

3 ‘‘(i) the date that is 10 days after the 

4 date of the contract award; or 

5 ‘‘(ii) the date that is 5 days after the 

6 debriefing date offered to an unsuccessful 

7 offeror for any debriefing that is requested 

8 and, when requested, is required. 

9 ‘‘(5) NONDELEGATION.—The authority of the 

10 head of the procuring activity to make findings and 

11 to authorize the award and performance of contracts 

12 under paragraphs (3) and (4) may not be delegated. 

13 ‘‘(6) PROVISION OF DOCUMENTS.— 

14 ‘‘(A) IN GENERAL.—Within such deadlines 

15 as the Administrator prescribes, and upon re16 quest, each Federal agency shall provide to an 

17 interested party any document relevant to a 

18 protested procurement action (including the re19 port required by paragraph (2)(B)) that would 

20 not give that party a competitive advantage and 

21 that the party is otherwise authorized by law to 

22 receive. 

23 ‘‘(B) PROTECTIVE ORDERS.— 

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

25 may issue protective orders which establish 


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1 terms, conditions, and restrictions for the 

2 provision of any document to a party 

3 under subparagraph (A), that prohibit or 

4 restrict the disclosure by the party of in5 formation described in clause (ii) that is 

6 contained in such a document. 

7 ‘‘(ii) TYPES OF INFORMATION.—Infor8 mation referred to in clause (i) is procure9 ment sensitive information, trade secrets, 

10 or other proprietary or confidential re11 search, development, or commercial infor12 mation. 

13 ‘‘(iii) INFORMATION TO THE FEDERAL

14 GOVERNMENT.—A protective order under 

15 this subparagraph shall not be considered 

16 to authorize the withholding of any docu17 ment or information from Congress or an 

18 executive agency. 

19 ‘‘(7) INTERESTED PARTIES.—If an interested 

20 party files a protest in connection with a public-pri21 vate competition described in subsection (a)(2)(B), a 

22 person representing a majority of the employees of 

23 the Federal agency who are engaged in the perform24 ance of the activity or function subject to the public25 private competition may intervene in protest. 


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1 ‘‘(c) DECISIONS ON PROTESTS.— 

2 ‘‘(1) IN GENERAL.— 

3 ‘‘(A) INEXPENSIVE AND EXPEDITIOUS RES4 OLUTION.—To the maximum extent practicable, 

5 the Administrator shall provide for the inexpen6 sive and expeditious resolution of protests under 

7 this section. Except as provided under subpara8 graph (B), the Administrator shall issue a final 

9 decision concerning a protest not later than 100 

10 days after the date on which the protest is sub11 mitted to the Administration. 

12 ‘‘(B) EXPRESS OPTION.—The Adminis13 trator shall, by regulation established under 

14 subsection (d), establish an express option for 

15 deciding those protests which the Administrator 

16 determines suitable for resolution, not later 

17 than 65 days after the date on which the pro18 test is submitted. 

19 ‘‘(C) AMENDMENTS.—An amendment to a 

20 protest that adds a new ground of protest, if 

21 timely made, should be resolved, to the max22 imum extent practicable, within the time limit 

23 established under subparagraph (A) for final 

24 decision of the initial protest. If an amended 

25 protest cannot be resolved within such time 


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1 limit, the Administrator may resolve the amend2 ed protest through the express option under 

3 subparagraph (B). 

4 ‘‘(D) FRIVOLOUS PROTESTS.—The Admin5 istrator may dismiss a protest that the Admin6 istrator determines is frivolous or which, on its 

7 face, does not state a valid basis for protest. 

8 ‘‘(2) COMPLIANCE WITH LAW.— 

9 ‘‘(A) IN GENERAL.—With respect to a so10 licitation for a contract, or a proposed award or 

11 the award of a contract, protested under this 

12 section, the Administrator may determine 

13 whether the solicitation, proposed award, or 

14 award complies with statutes and regulations 

15 regarding small business size or status. If the 

16 Administrator determines that the solicitation, 

17 proposed award, or award does not comply with 

18 a statute or regulation, the Administrator shall 

19 recommend that the Federal agency— 

20 ‘‘(i) refrain from exercising any of its 

21 options under the contract; 

22 ‘‘(ii) recompete the contract imme23 diately; 

24 ‘‘(iii) issue a new solicitation; 

25 ‘‘(iv) terminate the contract; 


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1 ‘‘(v) award a contract consistent with 

2 the requirements of such statutes and reg3 ulations; or 

4 ‘‘(vi) implement such other rec5 ommendations as the Administrator deter6 mines to be necessary in order to promote 

7 compliance with procurement statutes and 

8 regulations. 

9 ‘‘(B) BEST INTERESTS OF UNITED

10 STATES.—If the head of the procuring activity 

11 responsible for a contract makes a finding de12 scribed in subsection (b)(4)(C)(iii)(I)(aa), the 

13 Administrator shall make recommendations 

14 under this paragraph without regard to any 

15 cost or disruption from terminating, recom16 peting, or reawarding the contract. 

17 ‘‘(C) IMPLEMENTATION.—If the Federal 

18 agency fails to implement fully the rec19 ommendations of the Administrator under this 

20 paragraph with respect to a solicitation for a 

21 contract or an award or proposed award of a 

22 contract by the date that is 60 days after the 

23 date on which the agency received the rec24 ommendations, the head of the procuring activ25 ity responsible for that contract shall report 


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1 such failure to the Administrator not later than 

2 5 days after the end of such 60-day period. 

3 ‘‘(3) PAYMENT OF COSTS.— 

4 ‘‘(A) IN GENERAL.—If the Administrator 

5 determines that a solicitation for a contract or 

6 a proposed award or the award of a contract 

7 does not comply with a statute or regulation, 

8 the Administrator may recommend that the 

9 Federal agency conducting the procurement pay 

10 to an appropriate interested party the costs 

11 of— 

12 ‘‘(i) filing and pursuing the protest, 

13 including reasonable attorney’s fees and 

14 consultant and expert witness fees; and 

15 ‘‘(ii) bid and proposal preparation. 

16 ‘‘(B) COSTS NOT INCLUDED.—No party 

17 (other than a small business concern) may be 

18 paid, under a recommendation made under the 

19 authority of subparagraph (A)— 

20 ‘‘(i) costs for consultant and expert 

21 witness fees that exceed the highest rate of 

22 compensation for expert witnesses paid by 

23 the Federal Government; or 

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1 termines, based on the recommendation of 

2 the Administrator on a case by case basis, 

3 that an increase in the cost of living or a 

4 special factor, such as the limited avail5 ability of qualified attorneys for the pro6 ceedings involved, justifies a higher fee. 

7 ‘‘(C) RECOMMENDATION TO PAY COSTS.— 

8 If the Administrator recommends under sub9 paragraph (A) that a Federal agency pay costs 

10 to an interested party, the Federal agency 

11 shall— 

12 ‘‘(i) pay the costs promptly; or 

13 ‘‘(ii) if the Federal agency does not 

14 make such payment, promptly report to 

15 the Administrator the reasons for the fail16 ure to follow the Administrator’s rec17 ommendation. 

18 ‘‘(D) AGREEMENT ON AMOUNT.—If the 

19 Administrator recommends under subparagraph 

20 (A) that a Federal agency pay costs to an inter21 ested party, the Federal agency and the inter22 ested party shall attempt to reach an agreement 

23 on the amount of the costs to be paid. If the 

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1 ministrator may, upon the request of the inter2 ested party, recommend to the Federal agency 

3 the amount of the costs that the Federal agency 

4 should pay. 

5 ‘‘(4) DECISIONS.—Each decision of the Admin6 istrator under this section shall be signed by the Ad7 ministrator or a designee for that purpose. A copy 

8 of the decision shall be made available to the inter9 ested parties, the head of the procuring activity re10 sponsible for the solicitation, proposed award, or 

11 award of the contract, and the senior procurement 

12 executive of the Federal agency involved. 

13 ‘‘(5) REPORTS.— 

14 ‘‘(A) FAILURE TO IMPLEMENT REC15 OMMENDATIONS.— 

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

17 shall report promptly to the Committee on 

18 Small Business and Entrepreneurship of 

19 the Senate and to the Committee on Small 

20 Business of the House of Representatives 

21 any case in which a Federal agency fails to 

22 implement fully a recommendation of the 

23 Administrator under paragraph (2) or (3). 

24 ‘‘(ii) CONTENTS.—Each report under 

25 clause (i) shall include— 


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1 ‘‘(I) a comprehensive review of 

2 the pertinent procurement, including 

3 the circumstances of the failure of the 

4 Federal agency to implement a rec5 ommendation of the Administrator; 

6 and 

7 ‘‘(II) a recommendation regard8 ing whether, in order to correct an in9 equity or to preserve the integrity of 

10 the procurement process, Congress 

11 should consider— 

12 ‘‘(aa) private relief legisla13 tion; 

14 ‘‘(bb) legislative rescission or 

15 cancellation of funds; 

16 ‘‘(cc) further investigation 

17 by Congress; or 

18 ‘‘(dd) other action. 

19 ‘‘(B) ANNUAL REPORTS.—Not later than 

20 January 31 of each year, the Administrator 

21 shall transmit to Congress a report containing 

22 a summary of each instance in which a Federal 

23 agency did not fully implement a recommenda24 tion of the Administrator under subsection (b) 

25 or this subsection during the preceding year. 


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1 The report shall also describe each instance in 

2 which a final decision in a protest was not ren3 dered within 100 days after the date on which 

4 the protest was submitted to the Administrator. 

5 ‘‘(d) REGULATIONS; AUTHORITY OF ADMINISTRATOR

6 TO VERIFY ASSERTIONS.— 

7 ‘‘(1) IN GENERAL.—The Administrator shall es8 tablish such procedures as may be necessary for the 

9 expeditious decision of protests under this section, 

10 including procedures for accelerated resolution of 

11 protests under the express option authorized by sub12 section (c)(1)(B). Such procedures shall provide that 

13 the protest process may not be delayed by the failure 

14 of a party to make a filing within the time provided 

15 for the filing. 

16 ‘‘(2) COMPUTATION OF TIME.—The procedures 

17 established under paragraph (1) shall provide that, 

18 in the computation of any period described in this 

19 section— 

20 ‘‘(A) the day of the act, event, or default 

21 from which the designated period of time begins 

22 to run not be included; and 

23 ‘‘(B) the last day after such act, event, or 

24 default be included, unless— 


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1 ‘‘(i) such last day is a Saturday, a 

2 Sunday, or a legal holiday; or 

3 ‘‘(ii) in the case of a filing of a paper 

4 at the Administration or another Federal 

5 agency, such last day is a day on which 

6 weather or other conditions cause the clos7 ing of the Administration or other Federal 

8 agency, in which event the next day that is 

9 not a Saturday, Sunday, or legal holiday 

10 shall be included. 

11 ‘‘(3) ELECTRONIC FILING.—The Administrator 

12 may prescribe procedures for the electronic filing 

13 and dissemination of documents and information re14 quired under this section. In prescribing such proce15 dures, the Administrator shall consider the ability of 

16 all parties to achieve electronic access to such docu17 ments and records. 

18 ‘‘(e) ENFORCEMENT.—The Administrator may use 

19 any authority available under this Act or any other provi20 sion of law to verify assertions made by parties in protests 

21 under this section. 

22 ‘‘(f) REGULATIONS.—The Administrator may issue 

23 regulations regarding the use of the protest authority to 

24 consider small business size or status challenges under 


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1 this section in matters involving any other program for 

2 small business concerns.’’. 

3 SEC. 1405. TRAINING FOR CONTRACTING AND ENFORCE4 MENT PERSONNEL. 

5 (a) IN GENERAL.—Not later than 270 days after the 

6 date of enactment of this Act, the head of each appro7 priate Federal agency or entity shall, in consultation with 

8 the Administrator or the Inspector General of the Admin9 istration, as appropriate, develop courses concerning prop10 er classification of business concerns and small business 

11 size and status for purposes of Federal contracts, sub12 contracts, grants, cooperative agreements, and cooperative 

13 research and development agreements. 

14 (b) POLICY ON PROSECUTIONS OF SMALL BUSINESS

15 SIZE AND STATUS FRAUD.—Section 3 of the Small Busi16 ness Act (15 U.S.C. 632), as amended by this Act, is 

17 amended by adding at the end the following: 

18 ‘‘(u) POLICY ON PROSECUTIONS OF SMALL BUSI19 NESS SIZE AND STATUS FRAUD.—Not later than 180 

20 days after the date of enactment of this subsection, the 

21 head of each relevant Federal agency and the Inspector 

22 General of the Administration shall issue a government23 wide policy on prosecution of small business size and sta24 tus fraud.’’. 


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1 SEC. 1406. PROTESTS OF SOLE SOURCE AWARDS. 

2 Section 3 of the Small Business Act (15 U.S.C. 632), 

3 as amended by this Act, is amended by adding at the end 

4 the following: 

5 ‘‘(v) PROTESTS OF SOLE SOURCE AWARDS.—Not6 withstanding any other provision of law, whether a busi7 ness concern that is an offeror on any sole source prime 

8 contract or subcontract awarded under this Act satisfies 

9 the size and status requirements under this Act may be 

10 protested by any interested party that is a small business 

11 concern.’’. 

12 SEC. 1407. SMALL BUSINESS SIZE AND STATUS FOR PUR13 POSE OF MULTIPLE AWARD CONTRACTS. 

14 Section 3 of the Small Business Act (15 U.S.C. 632), 

15 as amended by this Act, is amended by adding at the end 

16 the following: 

17 ‘‘(w) SMALL BUSINESS SIZE AND STATUS FOR PUR18 POSE OF MULTIPLE AWARD CONTRACTS.— 

19 ‘‘(1) IN GENERAL.—A business concern that en20 ters a multiple award contract of any kind with the 

21 Federal Government shall in any year in which such 

22 a contract is in effect, submit an annual statement 

23 at the end of its fiscal year recertifying its small 

24 business size and status to the Federal agency which 

25 awarded the contract. 


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1 ‘‘(2) RELATION TO OTHER LAWS.—Compliance 

2 with paragraph (1) shall not affect the obligation of 

3 a business concern to comply with other provisions 

4 of law concerning small business size or status.’’. 

5 SEC. 1408. SIZE STANDARDS DEVELOPMENT. 

6 (a) IN GENERAL.—Section 3(a)(2) of the Small Busi7 ness Act (15 U.S.C. 632(a)(2)) is amended by adding at 

8 the end the following: 

9 ‘‘(D) TIERED SIZE STANDARDS.—The Ad10 ministrator may establish 2 or more tiers within 

11 an overall small business size standard cap for 

12 the purpose of facilitating the growth and devel13 opment of small business concerns and facili14 tating peer-based competition among small 

15 business concerns for Federal contracts and 

16 subcontracts. In establishing tier-based size 

17 standards under this subparagraph, the Admin18 istrator shall take into account national and 

19 international industry conditions, including the 

20 size of industry leaders, the size of emerging 

21 small business concerns and very small business 

22 concerns, and the trends in the sizes of Federal 

23 contracts and subcontracts. The Administrator 

24 shall establish dollar-based thresholds within 

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1 contracts suitable for reservation solely to small 

2 business concerns within a lower tier in that in3 dustrial category.’’. 

4 (b) RESERVATION OF CONTRACTS.—Section 15 of 

5 the Small Business Act (15 U.S.C. 644), as amended by 

6 this Act, is amended by adding at the end the following: 

7 ‘‘(v) TIERED SIZE STANDARDS.—The head of pro8 curement for each Federal agency shall attempt to reserve 

9 contracts valued below the thresholds established by the 

10 Administrator under section 3(a)(2)(D) to small business 

11 concerns in a lower tier, unless market research indicates 

12 that such reservation will not result in securing a competi13 tive price to the Federal Government from 2 or more re14 sponsible contractors. Small business concerns in a lower 

15 tier may bid on contracts for their requisite tier, any high16 er tier, or contracts open to other than small business con17 cerns.’’. 

18 SEC. 1409. FULL-TIME EMPLOYEE EQUIVALENTS. 

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

20 632(a)(2)), as amended by this Act, is amended by adding 

21 at the end the following: 

22 ‘‘(E) FULL-TIME EMPLOYEE EQUIVA23 LENTS.—In computing the number of employ24 ees for purposes of size determinations under 


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1 this Act, the Administrator shall utilize the full2 time equivalents method.’’. 

3 TITLE XV—SMALL BUSINESS IN4 NOVATION RESEARCH AND 

5 SMALL BUSINESS TECH6 NOLOGY TRANSFER PRO7 GRAMS 

8 SEC. 1501. DEFINITIONS. 

9 In this title, the terms ‘‘extramural budget’’, ‘‘Small 

10 Business Innovation Research Program’’, ‘‘SBIR’’, 

11 ‘‘Small Business Technology Transfer Program’’, and 

12 ‘‘STTR’’ have the same meanings as in section 9 of the 

13 Small Business Act (15 U.S.C. 638). 

14 SEC. 1502. CONGRESSIONAL FINDINGS AND POLICY. 

15 (a) FINDINGS.—Congress finds that— 

16 (1) Federal agency practices excluding small 

17 business concerns from Federal research and devel18 opment efforts have wasted taxpayer funds and sti19 fled national competitiveness; 

20 (2) according to studies conducted for the Of21 fice of Advocacy of the Administration, small busi22 ness concerns hold 41 percent of the Nation’s pat23 ents, obtain 13 times more patents per employee 

24 than large business concerns, and obtain patents 


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1 which are twice as technologically significant as 

2 large business patents; and 

3 (3) according to the annual reports of the Na4 tional Science Foundation, small business concerns 

5 consistently receive less than 5 percent of Federal 

6 extramural research and development funding. 

7 (b) POLICY.—It is the policy of Congress to promote 

8 effectiveness in Federal research and development efforts 

9 and remove barriers to participation of small business con10 cerns as well as of partnerships between small business 

11 concerns and universities or other research institutions in 

12 Federal research and development programs by strength13 ening the Small Business Innovation Research Program 

14 and the Small Business Technology Transfer Program. 

15 Subtitle A—Small Business 

16 Innovation Leadership 

17 SEC. 1511. STATUS OF THE SBA OFFICE OF TECHNOLOGY; 

18 NATIONAL ADVISORY BOARD; TRANSFER 

19 PLAN. 

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

21 638(b)) is amended— 

22 (1) in paragraph (7), by striking ‘‘and’’ at the 

23 end; 

24 (2) in paragraph (8), by striking the period at 

25 the end and inserting ‘‘; and’’; and 


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

2 ‘‘(9) to maintain an Office of Technology to 

3 carry its responsibilities under this section, headed 

4 by the Assistant Administrator for Technology, who 

5 shall be appointed by the President, in consultation 

6 with the Committee on Small Business and Entre7 preneurship of the Senate and the Committee on 

8 Small Business of the House of Representatives; 

9 ‘‘(10) to submit, as a separate part of the 

10 President’s budget, a request for appropriations for 

11 staffing for the Office of Technology and informa12 tion regarding the performance of this Office, taking 

13 into consideration the size of the program and the 

14 statutory oversight responsibilities of the Adminis15 tration; 

16 ‘‘(11) to appoint, in consultation with the Com17 mittee on Small Business and Entrepreneurship of 

18 the Senate and the Committee on Small Business of 

19 the House of Representatives, a National Small 

20 Business Innovation and Technology Transfer Advi21 sory Board, consisting of not fewer than 9 members 

22 to advise the Assistant Administrator for Technology 

23 on all matters concerning small business innovation 

24 and technology transfer; 


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1 ‘‘(12) submit to the Committee on Small Busi2 ness and Entrepreneurship of the Senate and the 

3 Committee on Small Business of the House of Rep4 resentatives not later than November 1 of each year 

5 a National Small Business Innovation and Tech6 nology Transfer Plan for the appropriate fiscal year 

7 containing a forecast of research and development 

8 topics as well as commercialization opportunities in 

9 all participating Federal agencies; and 

10 ‘‘(13) to annually submit to the Committee on 

11 Small Business and Entrepreneurship of the Senate 

12 and the Committee on Small Business of the House 

13 of Representatives a compilation of agency-specific 

14 and program-wide data concerning the numbers of 

15 Phase I and Phase II awards made generally and 

16 under any pilot program during the previous year.’’. 

17 Subtitle B—Fair Access to Federal 

18 Innovations Investments 

19 SEC. 1521. ACCURACY IN FUNDING BASE CALCULATIONS; 

20 COMPTROLLER GENERAL’S AUDITS. 

21 Not later than 270 days after the date of enactment 

22 of this Act, and every 3 years thereafter the Comptroller 

23 General of the United States shall— 

24 (1) conduct a fiscal and management audit of 

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1 mine whether Federal departments and agencies are 

2 complying with the set-aside requirements of this 

3 title and the amendments made by this title; and 

4 (2) submit a report to the Committee on Small 

5 Business and Entrepreneurship of the Senate and 

6 the Committee on Small Business of the House of 

7 Representatives regarding the audit conducted under 

8 paragraph (1). 

9 SEC. 1522. SBIR CAP INCREASE. 

10 Section 9(f)(1) of the Small Business Act (15 U.S.C. 

11 638(f)(1)) is amended— 

12 (1) in subparagraph (B), by striking ‘‘and’’ at 

13 the end; and 

14 (2) by striking subparagraph (C) and inserting 

15 the following: 

16 ‘‘(C) not less than— 

17 ‘‘(i) 3 percent in fiscal year 2007; 

18 ‘‘(ii) 3.5 percent in fiscal year 2008; 

19 ‘‘(iii) 4 percent in fiscal year 2009; 

20 and 

21 ‘‘(iv) 4.5 percent in fiscal year 2010; 

22 and 

23 ‘‘(D) not less than 5 percent in fiscal year 

24 2011 and each fiscal year thereafter,’’. 


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1 SEC. 1523. STTR CAP INCREASE. 

2 Section 9(n)(1)(B) of the Small Business Act (15 

3 U.S.C. 638(n)(1)(B)) is amended— 

4 (1) in clause (i), by striking ‘‘and’’ at the end; 

5 (2) in clause (ii), by striking ‘‘thereafter.’’ and 

6 inserting ‘‘through fiscal year 2006; and’’; and 

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

8 ‘‘(iii) 0.6 percent for fiscal year 2007 

9 and each fiscal year thereafter.’’. 

10 SEC. 1524. ADJUSTMENTS IN SBIR AND STTR AWARD LEV11 ELS. 

12 (a) SBIR ADJUSTMENTS.—Section 9(j)(2)(D) of the 

13 Small Business Act (15 U.S.C. 638(j)(2)(D)) is amend14 ed— 

15 (1) by striking ‘‘$100,000’’ and inserting 

16 ‘‘$150,000’’; and 

17 (2) by striking ‘‘$750,000’’ and inserting 

18 ‘‘$1,250,000’’. 

19 (b) STTR ADJUSTMENTS.—Section 9(p)(2)(B)(ix) of 

20 the Small Business Act (15 U.S.C. 638(p)(2)(B)(ix)) is 

21 amended— 

22 (1) by striking ‘‘$100,000’’ and inserting 

23 ‘‘$150,000’’; and 

24 (2) by striking ‘‘$750,000’’ and inserting 

25 ‘‘$1,250,000’’. 


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1 (c) ANNUAL ADJUSTMENTS.—Section 9 of the Small 

2 Business Act (15 U.S.C. 638) is amended— 

3 (1) in subsection (j)(2)(D), by striking ‘‘and an 

4 adjustment of such amounts once every 5 years to 

5 reflect economic adjustments and programmatic con6 siderations’’ and inserting ‘‘and a mandatory annual 

7 adjustment of such amounts to reflect economic ad8 justments and programmatic considerations’’; 

9 (2) in subsection (p)(2)(B)(ix), by striking 

10 ‘‘greater or lesser amounts’’ and inserting ‘‘with a 

11 mandatory annual adjustment of such amounts to 

12 reflect economic adjustments and programmatic con13 siderations, and greater or lesser amounts’’. 

14 (d) LIMITATION ON CERTAIN AWARDS.—Section 9 of 

15 the Small Business Act (15 U.S.C. 638) is amended by 

16 adding at the end the following: 

17 ‘‘(z) LIMITATION ON CERTAIN AWARDS.—No Federal 

18 agency shall issue an award under the SBIR program or 

19 the STTR program if the size of the award exceeds the 

20 award guidelines established under this section by more 

21 than 50 percent. Participating agencies shall maintain in22 formation on awards exceeding the guidelines, including 

23 award amounts and identities of recipients, and shall re24 port such information annually to the Administration. 

25 ‘‘(aa) SUBSEQUENT PHASES.— 


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1 ‘‘(1) IN GENERAL.—A small business concern 

2 which received an award from a Federal agency 

3 under this section shall be eligible to receive an 

4 award for a subsequent phase from another Federal 

5 agency, if the head of each relevant Federal agency 

6 makes a written determination that the topics of the 

7 relevant awards are the same. 

8 ‘‘(2) SBIR AND STTR PROGRAMS.—A small 

9 business concern which received an award under this 

10 section under the SBIR program or the STTR pro11 gram may receive an award under this section for a 

12 subsequent phase in either the SBIR program or the 

13 STTR program.’’. 

14 SEC. 1525. MAJORITY-VENTURE INVESTMENTS IN SBIR 

15 FIRMS. 

16 (a) AUTHORITY AND DETERMINATION.—Upon a 

17 written determination provided not later than 30 days in 

18 advance to the Administrator and to the Committee on 

19 Small Business and Entrepreneurship of the Senate and 

20 the Committee on Small Business of the House of Rep21 resentatives, the head of each participating Federal agen22 cy may direct not more than 25 percent of the agency’s 

23 SBIR funds allocated in accordance with the Small Busi24 ness Act, as amended by this Act, in fiscal year 2007 and 

25 each fiscal year thereafter to small business concerns that 


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1 are owned in majority part by venture capital companies 

2 and that satisfy the qualification requirements under sub3 section (b). The written determination shall demonstrate 

4 that the use of such authority will induce additional ven5 ture capital funding of small business innovations, sub6 stantially contribute to the mission of the funding agency, 

7 or otherwise fulfill the capital needs of small business con8 cerns for additional financing. 

9 (b) QUALIFICATION REQUIREMENTS.—No United 

10 States small business concern which satisfies applicable 

11 requirements established by the Administrator concerning 

12 small business affiliation shall be excluded from participa13 tion in the program authorized by subsection (a) on the 

14 ground that such small business concern is owned in ma15 jority part by more than 1 United States venture capital 

16 company, provided that no single venture capital company 

17 owns more than 49 percent of such small business con18 cern. 

19 (c) REGISTRATION.—Any small business concern that 

20 is a venture capital portfolio company qualified for partici21 pation in the program authorized by subsection (a) shall 

22 register with the Administrator as a Venture Capital 

23 SBIR Investment Company. Any such company shall indi24 cate such status in any SBIR proposal. 


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1 (d) DEFINITION OF VENTURE CAPITAL COMPANY.— 

2 In this section, the term ‘‘venture capital company’’ means 

3 an entity described in clause (i), (v), or (vi) of section 

4 121.103(b) of title 13, Code of Federal Regulations (or 

5 any corresponding similar regulation or ruling). 

6 Subtitle C—Acquisition of Small 

7 Business Innovations 

8 SEC. 1531. NATIONAL SBIR AND STTR TECHNOLOGY INSER9 TION GOAL; REPORTING REQUIREMENTS. 

10 Section 9 of the Small Business Act (15 U.S.C. 638), 

11 as amended by this Act, is amended by adding at the end 

12 the following: 

13 ‘‘(bb) NATIONAL SMALL BUSINESS TECHNOLOGY IN14 SERTION GOAL; REPORTING REQUIREMENTS.— 

15 ‘‘(1) IN GENERAL.—For fiscal year in 2007, 

16 and each fiscal year thereafter there is established a 

17 governmentwide goal for insertion of SBIR and 

18 STTR technologies through Phase III awards of not 

19 less than 3 percent of total value of Federal prime 

20 contracting dollars for research, development, test21 ing, and evaluation, to be met through either prime 

22 contracts or subcontracts (in this subsection referred 

23 to as the ‘National Small Business Technology In24 sertion goal’). 


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1 ‘‘(2) NATIONAL SMALL BUSINESS TECHNOLOGY

2 INSERTION GOAL.—The Administrator shall ensure 

3 that the National Small Business Technology Inser4 tion goal is negotiated and reported to the public 

5 and Congress in accordance with the authorities gov6 erning the negotiating and reporting of small busi7 ness procurement goals by the Administrator under 

8 this Act. 

9 ‘‘(3) REPORTS.—Each report submitted under 

10 paragraph (2) shall include— 

11 ‘‘(A) the name of the contracting agency; 

12 ‘‘(B) the identity of the agency or company 

13 making the Phase III award; 

14 ‘‘(C) the identity of the company or indi15 vidual receiving the Phase III award, as well as 

16 the identity of the agency or prime contractor 

17 making the Phase III award; and 

18 ‘‘(D) the dollar amount of the Phase III 

19 award.’’. 

20 SEC. 1532. INTELLECTUAL PROPERTY PROTECTIONS FOR 

21 SMALL BUSINESS INNOVATIONS. 

22 (a) SBIR AND STTR DATA RIGHTS.—Section 9(e) 

23 of the Small Business Act (15 U.S.C. 638(e)) is amend24 ed— 


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1 (1) in paragraph (7), by striking ‘‘and’’ at the 

2 end; 

3 (2) in paragraph (8), by striking the period and 

4 inserting ‘‘; and’’; and 

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

6 ‘‘(9) ‘data’, in connection with rights in or 

7 rights to data— 

8 ‘‘(A) includes rights in and rights to proto9 types, as consistent with paragraph (5)(C); 

10 ‘‘(B) shall be considered to be a trade se11 cret for purposes of any provision of Federal 

12 law protecting trade secrets from unauthorized 

13 use, disclosure, or reverse engineering; 

14 ‘‘(C) includes technical data that the SBIR 

15 or STTR small business concern has developed 

16 at private expense, if such data is used in the 

17 development, testing, or evaluation of SBIR or 

18 STTR technology; and 

19 ‘‘(D) shall be subject to data rights protec20 tions under this section and the SBIR and 

21 STTR Policy Directives in connection with any 

22 contract or subcontract developed with Federal 

23 funds or intended for use by the Federal gov24 ernment, and any mentor-prote ́ge ́ agreements.’’. 


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1 SEC. 1533. SBIR AND STTR SPECIAL ACQUISITION PREF2 ERENCE. 

3 (a) CODIFICATION OF REGULATORY PREFERENCE.— 

4 Section 9 of the Small Business Act (15 U.S.C. 638), as 

5 amended by this Act, is amended by adding at the end 

6 the following: 

7 ‘‘(cc) PHASE III AWARDS.—Congress intends that, to 

8 the greatest extent practicable, Federal agencies and Fed9 eral prime contractors issue Phase III awards, including 

10 sole source awards, to the SBIR and STTR award recipi11 ents that developed the technology.’’. 

12 (b) POLICIES.—Section 9 of the Small Business Act 

13 (15 U.S.C. 638) is amended— 

14 (1) in subsection (j)(2)(C)— 

15 (A) by striking ‘‘, to the extent prac16 ticable,’’; and 

17 (B) by inserting before the semicolon at 

18 the end ‘‘, unless the agency establishes on the 

19 record that such an award is not practicable’’; 

20 and 

21 (2) in subsection (p)(2)(F)— 

22 (A) by striking ‘‘, to the extent prac23 ticable,’’; and 

24 (B) by inserting before the period at the 

25 end ‘‘, unless the agency establishes on the 

26 record that such an award is not practicable’’. 


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1 (c) REDUCTION OF WASTE AND DUPLICATION IN

2 FEDERAL TECHNOLOGY CONTRACTING.—Section 9 of the 

3 Small Business Act (15 U.S.C. 638), as amended by this 

4 Act, is amended by adding at the end the following: 

5 ‘‘(dd) DUPLICATION OF PRIOR AWARDS.—A Federal 

6 agency may not solicit bids or proposals for award of con7 tracts on any topic duplicating a SBIR or STTR award 

8 previously made by such agency, unless, not later than 30 

9 days before the solicitation, the agency submits an ad10 vance notice of intent to issue such a solicitation to the 

11 Administrator. Such solicitations may be challenged by the 

12 Administrator to the head of the agency, or otherwise be 

13 challenged in accordance with law. To avoid duplication, 

14 before issuing a solicitation, the responsible Federal agen15 cy official shall review the Tech-Net database of the Ad16 ministration (or any successor database) and document 

17 the results of such review in contracting files.’’. 

18 SEC. 1534. SBIR AND STTR MENTOR-PROTE ́ GE ́ PROGRAMS. 

19 (a) AUTHORIZATION.—The head of each Federal 

20 agency may establish a mentor-prote ́ge ́ program to provide 

21 development and commercialization assistance to small 

22 business concerns participating in the SBIR program and 

23 the STTR program. 


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1 (b) TYPES OF ASSISTANCE AUTHORIZED.—The fol2 lowing types of assistance are authorized for mentor3 prote ́ge ́ programs: 

4 (1) Assistance with general business develop5 ment, business management, commercialization mar6 keting, or corporate infrastructure. 

7 (2) Testing and evaluation assistance for inser8 tion of SBIR and STTR technologies into technical 

9 or weapons systems. 

10 (3) Commercialization through Federal sub11 contracts awarded in accordance with the terms of 

12 the special acquisition preference. 

13 (4) Payment of progress payments and advance 

14 payment for the performance of subcontracts com15 mercializing SBIR and STTR technologies developed 

16 by the prote ́ge ́ firm. 

17 (5) Loans to a prote ́ge ́ firm towards develop18 ment and commercialization of SBIR or STTR tech19 nologies. 

20 (c) PROGRAM TERMS.—The head of a Federal agency 

21 is authorized to approve mentor-prote ́ge ́ agreements pro22 viding to the mentor firm incentives, including— 

23 (1) credit towards meeting the mentor’s small 

24 business subcontracting goals; and 

25 (2) contractual term extension incentives. 


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1 (d) APPROVAL.— 

2 (1) IN GENERAL.—The Administrator shall ap3 prove a SBIR and STTR mentor-prote ́ge ́ program in 

4 each Federal agency that establishes such a pro5 gram. 

6 (2) CLARIFICATION OF APPLICABILITY.—It is 

7 the intent of Congress that the prohibition on condi8 tioning, negotiating, transferring, or diminishing 

9 SBIR and STTR data rights in the making or ad10 ministration of phase III awards (including prime 

11 contracts and subcontracts) that are federally fund12 ed or intended for use by the Federal Government 

13 that is contained in section 8 of the SBIR Policy Di14 rective and in section 3 of the STTR Policy Direc15 tive (as in effect on the date of enactment of this 

16 Act, and any successor thereto) apply to mentor17 prote ́ge ́ agreements established for the purpose of 

18 assisting SBIR and STTR small business concerns. 

19 (3) DATA RIGHTS PROTECTIONS.—Notwith20 standing any other provision of law, no mentor21 prote ́ge ́ agreement with an SBIR or STTR small 

22 business concern may be approved by any Federal 

23 agency, unless it contains phase III data rights pro24 tection clauses prescribed by the SBIR and STTR 

25 Policy Directives described in paragraph (2). 


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1 (4) APPROVAL OF AGREEMENTS.—The SBIR 

2 program manager and the STTR program manager 

3 at a Federal agency shall each ensure that Federal 

4 reimbursement funding for mentor-prote ́ge ́ assist5 ance to SBIR and STTR small business concerns is 

6 directed towards development, testing, evaluation, 

7 and commercialization of SBIR and STTR tech8 nologies, respectively. 

9 (5) REPORTING REQUIREMENT.—Any mentor10 prote ́ge ́ agreement established for the purpose of as11 sisting an SBIR or STTR small business concern 

12 shall require reporting of the dollar value of phase 

13 III awards made as a result of the mentor-prote ́ge ́

14 assistance. 

15 SEC. 1535. SUBCONTRACTING WITH FEDERAL LABORA16 TORIES AND RESEARCH AND DEVELOPMENT 

17 CENTERS. 

18 Section 9 of the Small Business Act (15 U.S.C. 638), 

19 as amended by this Act, is amended by adding at the end 

20 the following: 

21 ‘‘(ee) SUBCONTRACTING.— 

22 ‘‘(1) AUTHORIZATION.—The head of each par23 ticipating Federal agency is authorized to issue 

24 SBIR and STTR awards to any eligible small busi25 ness concern which intends to subcontract portions 


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1 of the work to Federal laboratories and federally 

2 funded research and development centers, subject to 

3 the limitations under this section. 

4 ‘‘(2) PROHIBITION.—No Federal agency shall— 

5 ‘‘(A) condition SBIR or STTR awards 

6 upon subcontracting any portion of the work to 

7 any Federal agency or any federally funded lab8 oratory or research and development center; 

9 ‘‘(B) approve a subcontracting arrange10 ment where the small business concern per11 forms a lesser portion of the work than required 

12 by this section and by the SBIR and STTR 

13 Policy Directives; or 

14 ‘‘(C) approve a subcontracting arrange15 ment which violates any provisions, including 

16 data rights protections provisions, of this sec17 tion or the SBIR and the STTR Policy Direc18 tives. 

19 ‘‘(3) IMPLEMENTATION.—Not later than 180 

20 days after the date of enactment of this subsection, 

21 the Administrator shall modify the SBIR Policy Di22 rective and the STTR Policy Directive issued under 

23 this section to ensure that small business concerns 

24 have the flexibility to use the resources of the Fed25 eral laboratories and federally funded research and 


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1 development centers, but shall not be mandated to 

2 subcontract with them as a condition of award.’’. 

3 SEC. 1536. INNOVATION COMMERCIALIZATION PILOT PRO4 GRAMS. 

5 Section 9 of the Small Business Act (15 U.S.C. 638), 

6 as amended by this Act, is amended by adding at the end 

7 the following: 

8 ‘‘(ff) INNOVATION COMMERCIALIZATION PILOT PRO9 GRAMS.— 

10 ‘‘(1) IN GENERAL.—Effective on and after the 

11 beginning of fiscal year 2007, the head of any civil12 ian Federal agency participating in the SBIR pro13 gram which has awarded over $5,000,000,000 in 

14 procurement contracts during the previous fiscal 

15 year is authorized to create and administer a com16 mercialization pilot program (in this section referred 

17 to as a ‘pilot program’) to accelerate the transition 

18 of technologies, products, and services developed 

19 under the SBIR program to Phase III, including the 

20 acquisition process. 

21 ‘‘(2) IDENTIFICATION OF RESEARCH PROGRAMS

22 FOR ACCELERATED TRANSITION TO ACQUISITION

23 PROCESS.—In carrying out a pilot program, the 

24 head of the Federal agency concerned shall identify 

25 research programs of the SBIR program that have 


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1 the potential for rapid transitioning to Phase III 

2 and into the acquisition process. 

3 ‘‘(3) LIMITATION.—No research program may 

4 be identified under paragraph (2) unless the head of 

5 the Federal agency concerned certifies in writing 

6 that the successful transition of the program to 

7 Phase III and into the acquisition process is ex8 pected to meet high priority mission requirements of 

9 such agency. 

10 ‘‘(4) FUNDING.— 

11 ‘‘(A) IN GENERAL.—For payment of ex12 penses incurred to administer a pilot program, 

13 the head of the Federal agency concerned is au14 thorized to use not more than an amount equal 

15 to 1 percent of the funds available to such Fed16 eral agency under the SBIR program. 

17 ‘‘(B) LIMITATIONS.—Any funds used 

18 under subparagraph (A)— 

19 ‘‘(i) shall not be subject to the limita20 tions on the use of funds in subsection 

21 (f)(2); or 

22 ‘‘(ii) may not be used to make Phase 

23 III awards. 

24 ‘‘(5) EVALUATIVE REPORT.— 


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1 ‘‘(A) IN GENERAL.—At the end of each fis2 cal year, the head of the Federal agency con3 cerned shall submit to the Committee on Small 

4 Business and Entrepreneurship of the Senate 

5 and the Committee on Small Business of the 

6 House of Representatives a report regarding ac7 tivities under the Commercialization Pilot Pro8 gram. 

9 ‘‘(B) CONTENTS.—Each report under sub10 paragraph (A) shall include— 

11 ‘‘(i) an accounting of the funds used 

12 in a pilot program; 

13 ‘‘(ii) a detailed description of the pilot 

14 program of such Federal agency, including 

15 incentives and activities undertaken by ac16 quisition program managers, program ex17 ecutive officers, managers or operators of 

18 laboratories or research and development 

19 centers, and prime contractors; and 

20 ‘‘(iii) a detailed compilation of results 

21 achieved by the pilot program of such Fed22 eral agency, including the number of small 

23 business concerns assisted, Phase III dol24 lars awarded, and the number of projects 

25 commercialized. 


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1 ‘‘(6) AUTHORIZED INCENTIVES AND ACTIVI2 TIES.—In carrying out a pilot program, the head of 

3 the Federal agency concerned is authorized to— 

4 ‘‘(A) offer contractual term and payment 

5 incentives to prime contractors for successful 

6 commercialization of SBIR technologies; and 

7 ‘‘(B) facilitate business development and 

8 management assistance to SBIR small business 

9 concerns, conduct outreach to prime contrac10 tors, and provide such other assistance as the 

11 head of such Federal agency may determine 

12 necessary and proper. 

13 ‘‘(7) INTERAGENCY COMMERCIALIZATION.—The 

14 head of each Federal agency authorized to carry out 

15 a pilot program under this section is authorized to 

16 use such program to facilitate commercialization of 

17 SBIR technologies developed through awards from 

18 other Federal agencies. 

19 ‘‘(8) SUNSET.—The authority to establish a 

20 pilot program, and any pilot program established, 

21 under this subsection shall terminate at the end of 

22 fiscal year 2010.’’. 

23 SEC. 1537. ENFORCEMENT. 

24 (a) NOTIFICATION.—The head of any Federal agency 

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1 cial or administrative tribunal concerning the SBIR pro2 gram or the STTR program shall provide timely notice 

3 of such case or controversy to the Administrator. 

4 (b) REPORTING.—Section 9(b)(7) of the Small Busi5 ness Act (15 U.S.C. 638(b)(7)) is amended by inserting 

6 before the semicolon at the end the following: ‘‘, and a 

7 detailed description of appeals of Phase III awards and 

8 notices of noncompliance with the SBIR and the STTR 

9 Policy Directives filed by the Administrator with Federal 

10 agencies’’. 

11 Subtitle D—Technical and Finan12 cial Assistance for Small Busi13 ness Innovation 

14 SEC. 1541. REAUTHORIZATION AND ENHANCEMENT OF 

15 STATE, LOCAL, AND RURAL INNOVATION AS16 SISTANCE PROGRAMS. 

17 (a) FEDERAL AND STATE PROGRAM EXTENSION.— 

18 Section 9(s) of the Small Business Act (15 U.S.C. 638(s)) 

19 is amended— 

20 (1) in paragraph (1), by striking ‘‘1995’’ and 

21 inserting ‘‘2012’’; and 

22 (2) in paragraph (2), by striking ‘‘$2,000,000’’ 

23 and inserting ‘‘$5,000,000’’. 

24 (b) RURAL OUTREACH PROGRAM EXTENSION.—Sec25 tion 501(b)(2) of the Small Business Reauthorization Act 


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1 of 1997 (15 U.S.C. 638 note; 111 Stat. 2622) is amended 

2 by striking ‘‘2005’’ and inserting ‘‘2012’’. 

3 SEC. 1542. CONTINUED EVALUATION BY THE NATIONAL 

4 ACADEMY OF SCIENCES. 

5 Section 108 of the Small Business Reauthorization 

6 Act of 2000 (114 Stat. 2763A–671) is amended by adding 

7 at the end: 

8 ‘‘(e) EXTENSIONS AND ENHANCEMENTS OF AUTHOR9 ITY.— 

10 ‘‘(1) IN GENERAL.—The studies authorized 

11 under this section are authorized through the end of 

12 fiscal year 2009, subject to any further requirements 

13 set forth in this section. 

14 ‘‘(2) REPORT.— 

15 ‘‘(A) IN GENERAL.—The head of an agen16 cy described in subsection (a) should ensure 

17 that any agreement under that subsection in18 cludes that the National Academy of Sciences 

19 should conduct a survey of State and inter20 national innovation development policies, and 

21 other studies and research, subject to the avail22 ability of funds to carry out this section— 

23 ‘‘(i) addressing desirability and feasi24 bility of establishing a public, federally 

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1 nism to fund securities representing invest2 ments in highly promising small innovative 

3 companies; and 

4 ‘‘(ii) addressing barriers to greater 

5 commercialization of small business inno6 vations. 

7 ‘‘(B) SUBMISSION.—The agreement de8 scribed in subparagraph (A) should require 

9 that, not later than December 30, 2009, the 

10 National Academy of Sciences should submit to 

11 Congress a report describing the survey con12 ducted under subparagraph (A).’’. 

13 SEC. 1543. PHASE II INNOVATION DEVELOPMENT CHAL14 LENGE PILOT PROGRAM. 

15 Section 9 of the Small Business Act (15 U.S.C. 638), 

16 as amended by this Act, is amended by adding at the end 

17 the following: 

18 ‘‘(gg) PILOT PROGRAM.— 

19 ‘‘(1) AUTHORIZATION.—The head of each par20 ticipating Federal agency may set aside not more 

21 than 10 percent of the SBIR and STTR funds of 

22 such agency for further technology development and 

23 commercialization of SBIR and STTR Phase II 

24 technologies (in this section referred to as a ‘pilot 

25 program’). Such authority shall be in addition to any 


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1 other similar program that may be operating or au2 thorized to be operated by a participating Federal 

3 agency. 

4 ‘‘(2) REQUIREMENTS.— 

5 ‘‘(A) IN GENERAL.—A Federal agency may 

6 not establish a pilot program unless such agen7 cy makes a written application to the Adminis8 trator, not less than 90 days prior to the begin9 ning of the fiscal year in which such pilot pro10 gram is to be established, based on a compelling 

11 reason that additional investment in SBIR or 

12 STTR technologies is required due to unusually 

13 high regulatory, systems integration, or other 

14 costs related to development or manufacturing 

15 of identifiable, highly promising small business 

16 technologies or a class of such technologies ex17 pected to substantially advance the agency’s 

18 mission. 

19 ‘‘(B) DETERMINATION.—The Adminis20 trator shall— 

21 ‘‘(i) make a determination regarding 

22 an application submitted under subpara23 graph (A) not later than 30 days before 

24 the beginning of the fiscal year for which 

25 such application is submitted; 


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1 ‘‘(ii) publish such decision in the Fed2 eral Register; and 

3 ‘‘(iii) make a copy of such decision, 

4 and any related materials available to the 

5 Committee on Small Business and Entre6 preneurship of the Senate and the Com7 mittee on Small Business of the House of 

8 Representatives. 

9 ‘‘(C) MAXIMUM AMOUNT.—No award 

10 under a pilot program may be made in excess 

11 of 2 times the dollar amounts generally estab12 lished for Phase II awards under this section. 

13 ‘‘(D) MATCHING.—No award may be made 

14 under a pilot program unless new private, Fed15 eral non-SBIR, or Federal non-STTR funding 

16 which at least matches the award from the Fed17 eral agency is dedicated towards SBIR or 

18 STTR Phase II technology. 

19 ‘‘(E) ELIGIBILITY.—Awards under this 

20 pilot program may be made to any applicant 

21 which is eligible to receive a Phase III award 

22 related to such SBIR or STTR Phase II tech23 nology. 

24 ‘‘(F) REGISTRATION.—Applicants receiving 

25 awards under a pilot program shall register 


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1 with the Administrator in a publicly available 

2 registry. 

3 ‘‘(G) TERMINATION.—The authority to es4 tablish a pilot program under this section ex5 pires at the end of fiscal year 2012.’’. 

6 SEC. 1544. ENCOURAGING INNOVATION IN ENERGY EFFI7 CIENCY. 

8 (a) FEDERAL AGENCY ENERGY-RELATED PRI9 ORITY.—In carrying out its duties under section 9 of the 

10 Small Business Act relating to SBIR and STTR solicita11 tions by Federal agencies, the Administrator shall— 

12 (1) ensure that such agencies give high priority 

13 to small business concerns that participate in or con14 duct energy efficiency or renewable energy system 

15 research and development projects; and 

16 (2) include in the annual report to Congress 

17 under section 9(b)(7) of the Small Business Act (15 

18 U.S.C. 638(b)(7)), a determination of whether the 

19 priority described in paragraph (1) is being carried 

20 out. 

21 (b) CONSULTATION REQUIRED.—The Administrator 

22 shall consult with the heads of other Federal agencies and 

23 departments in determining whether priority has been 

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1 search and development projects, as required by this sec2 tion. 

3 (c) GUIDELINES.—The Administrator shall, as soon 

4 as is practicable after the date of enactment of this Act, 

5 issue guidelines and directives to assist Federal agencies 

6 in meeting the requirements of this section. 

7 (d) DEFINITIONS.—In this section— 

8 (1) the term ‘‘biomass’’— 

9 (A) means any organic material that is 

10 available on a renewable or recurring basis, in11 cluding— 

12 (i) agricultural crops; 

13 (ii) trees grown for energy production; 

14 (iii) wood waste and wood residues; 

15 (iv) plants (including aquatic plants 

16 and grasses); 

17 (v) residues; 

18 (vi) fibers; 

19 (vii) animal wastes and other waste 

20 materials; and 

21 (viii) fats, oils, and greases (including 

22 recycled fats, oils, and greases); and 

23 (B) does not include— 

24 (i) paper that is commonly recycled; 

25 or 


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1 (ii) unsegregated solid waste; 

2 (2) the term ‘‘energy efficiency project’’ means 

3 the installation or upgrading of equipment that re4 sults in a significant reduction in energy usage; and 

5 (3) the term ‘‘renewable energy system’’ means 

6 a system of energy derived from— 

7 (A) a wind, solar, biomass, or geothermal 

8 source; or 

9 (B) hydrogen derived from biomass or 

10 water using an energy source described in sub11 paragraph (A). 

12 SEC. 1545. SBIR–STEM WORKFORCE DEVELOPMENT GRANT 

13 PILOT PROGRAM. 

14 (a) PILOT PROGRAM ESTABLISHED.—From amounts 

15 made available to carry out this section, the Administrator 

16 shall establish a SBIR–STEM Workforce Development 

17 Grant Pilot Program to encourage the business commu18 nity to provide workforce development opportunities for 

19 college students, in the fields of science, technology, engi20 neering, and math (or ‘‘STEM college students’’), by pro21 viding an SBIR bonus grant. 

22 (b) ELIGIBLE ENTITIES DEFINED.—In this section 

23 the term ‘‘eligible entity’’ means a current grantee under 

24 the SBIR Program, as defined in section 9(e) of the Small 


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1 Business Act (15 U.S.C. 638(e)), that provides an intern2 ship program for STEM college students. 

3 (c) AWARDS.—An eligible entity shall receive a bonus 

4 grant equal to 10 percent of either a Phase I or Phase 

5 II grant, as applicable, with a total award maximum of 

6 not more than $10,000 per year. 

7 (d) EVALUATION.—Following the fifth year of fund8 ing under this section, the Administrator shall submit a 

9 report to Congress on the results of the SBIR–STEM 

10 Workforce Development Grant Pilot Program. 

11 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this sec13 tion— 

14 (1) $1,000,000 for fiscal year 2007; 

15 (2) $1,000,000 for fiscal year 2008; 

16 (3) $1,000,000 for fiscal year 2009; 

17 (4) $1,000,000 for fiscal year 2010; and 

18 (5) $1,000,000 for fiscal year 2011. 

19 Subtitle E—Implementation 

20 SEC. 1551. CONFORMING AMENDMENTS TO THE SBIR AND 

21 THE STTR POLICY DIRECTIVES. 

22 Not later than 180 days after the date of enactment 

23 of this Act, the Administrator shall promulgate amend24 ments to the SBIR and the STTR Policy Directives to 


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1 conform such directives to this title and the amendments 

2 made by this title. 

3 TITLE XVI—NATIVE AMERICAN 

4 SMALL BUSINESS DEVELOP5 MENT PROGRAM 

6 SEC. 1601. SHORT TITLE. 

7 This title may be cited as the ‘‘Native American 

8 Small Business Development Act of 2006’’. 

9 SEC. 1602. NATIVE AMERICAN SMALL BUSINESS DEVELOP10 MENT PROGRAM. 

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

12 amended by inserting after section 38, as added by this 

13 Act, the following: 

14 ‘‘SEC. 39. NATIVE AMERICAN SMALL BUSINESS DEVELOP15 MENT PROGRAM. 

16 ‘‘(a) DEFINITIONS.—In this section— 

17 ‘‘(1) the term ‘Alaska Native’ has the same 

18 meaning as the term ‘Native’ in section 3(b) of the 

19 Alaska Native Claims Settlement Act (43 U.S.C. 

20 1602(b)); 

21 ‘‘(2) the term ‘Alaska Native corporation’ has 

22 the same meaning as the term ‘Native Corporation’ 

23 in section 3(m) of the Alaska Native Claims Settle24 ment Act (43 U.S.C. 1602(m)); 


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1 ‘‘(3) the term ‘Assistant Administrator’ means 

2 the Assistant Administrator of the Office of Native 

3 American Affairs established under subsection (b); 

4 ‘‘(4) the terms ‘center’ and ‘Native American 

5 business center’ mean a center established under 

6 subsection (c); 

7 ‘‘(5) the term ‘Native American business devel8 opment center’ means an entity providing business 

9 development assistance to federally recognized tribes 

10 and Native Americans under a grant from the Mi11 nority Business Development Agency of the Depart12 ment of Commerce; 

13 ‘‘(6) the term ‘Native American small business 

14 concern’ means a small business concern that is 

15 owned and controlled by— 

16 ‘‘(A) a member of an Indian tribe or tribal 

17 government; 

18 ‘‘(B) an Alaska Native or Alaska Native 

19 corporation; or 

20 ‘‘(C) a Native Hawaiian or Native Hawai21 ian Organization; 

22 ‘‘(7) the term ‘Native Hawaiian’ has the same 

23 meaning as in section 625 of the Older Americans 

24 Act of 1965 (42 U.S.C. 3057k); 


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1 ‘‘(8) the term ‘Native Hawaiian Organization’ 

2 has the same meaning as in section 8(a)(15); 

3 ‘‘(9) the term ‘tribal college’ has the same 

4 meaning as the term ‘tribally controlled college or 

5 university’ has in section 2(a)(4) of the Tribally 

6 Controlled Community College Assistance Act of 

7 1978 (25 U.S.C. 1801(a)(4)); 

8 ‘‘(10) the term ‘tribal government’ has the 

9 same meaning as the term ‘Indian tribe’ has in sec10 tion 7501(a)(9) of title 31, United States Code; and 

11 ‘‘(11) the term ‘tribal lands’ means all lands 

12 within the exterior boundaries of any Indian reserva13 tion. 

14 ‘‘(b) OFFICE OF NATIVE AMERICAN AFFAIRS.— 

15 ‘‘(1) ESTABLISHMENT.—There is established 

16 within the Administration the Office of Native 

17 American Affairs, which, under the direction of the 

18 Assistant Administrator, shall implement the Admin19 istration’s programs for the development of business 

20 enterprises by Native Americans. 

21 ‘‘(2) PURPOSE.—The purpose of the Office of 

22 Native American Affairs is to assist Native Amer23 ican entrepreneurs to— 

24 ‘‘(A) start, operate, and grow small busi25 ness concerns; 


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1 ‘‘(B) develop management and technical 

2 skills; 

3 ‘‘(C) seek Federal procurement opportuni4 ties; 

5 ‘‘(D) increase employment opportunities 

6 for Native Americans through the start and ex7 pansion of small business concerns; and 

8 ‘‘(E) increase the access of Native Ameri9 cans to capital markets. 

10 ‘‘(3) ASSISTANT ADMINISTRATOR.— 

11 ‘‘(A) APPOINTMENT.—The Administrator 

12 shall appoint a qualified individual to serve as 

13 Assistant Administrator of the Office of Native 

14 American Affairs in accordance with this para15 graph. 

16 ‘‘(B) QUALIFICATIONS.—The Assistant 

17 Administrator appointed under subparagraph 

18 (A) shall have— 

19 ‘‘(i) knowledge of the Native Amer20 ican culture; and 

21 ‘‘(ii) experience providing culturally 

22 tailored small business development assist23 ance to Native Americans. 

24 ‘‘(C) EMPLOYMENT STATUS.—The Assist25 ant Administrator shall be a Senior Executive 


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1 Service position under section 3132(a)(2) of 

2 title 5, United States Code, and shall serve as 

3 a noncareer appointee, as defined in section 

4 3132(a)(7) of title 5, United States Code. 

5 ‘‘(D) RESPONSIBILITIES AND DUTIES.— 

6 The Assistant Administrator shall— 

7 ‘‘(i) administer and manage the Na8 tive American Small Business Development 

9 program established under this section; 

10 ‘‘(ii) recommend the annual adminis11 trative and program budgets for the Office 

12 of Native American Affairs; 

13 ‘‘(iii) consult with Native American 

14 business centers in carrying out the pro15 gram established under this section; 

16 ‘‘(iv) recommend appropriate funding 

17 levels; 

18 ‘‘(v) review the annual budgets sub19 mitted by each applicant for the Native 

20 American Small Business Development 

21 program; 

22 ‘‘(vi) select applicants to participate in 

23 the program under this section; 

24 ‘‘(vii) implement this section; and 


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1 ‘‘(viii) maintain a clearinghouse to 

2 provide for the dissemination and exchange 

3 of information between Native American 

4 business centers. 

5 ‘‘(E) CONSULTATION REQUIREMENTS.—In 

6 carrying out the responsibilities and duties de7 scribed in this paragraph, the Assistant Admin8 istrator shall confer with and seek the advice 

9 of— 

10 ‘‘(i) Administration officials working 

11 in areas served by Native American busi12 ness centers and Native American business 

13 development centers; 

14 ‘‘(ii) representatives of tribal govern15 ments; 

16 ‘‘(iii) tribal colleges; 

17 ‘‘(iv) Alaska Native corporations; and 

18 ‘‘(v) Native Hawaiian Organizations. 

19 ‘‘(c) NATIVE AMERICAN SMALL BUSINESS DEVELOP20 MENT PROGRAM.— 

21 ‘‘(1) AUTHORIZATION.— 

22 ‘‘(A) IN GENERAL.—The Administration, 

23 through the Office of Native American Affairs, 

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1 ganizations, and Alaska Native corporations to 

2 create Native American business centers in ac3 cordance with this section. 

4 ‘‘(B) USE OF FUNDS.—The financial and 

5 resource assistance provided under this sub6 section shall be used to overcome obstacles im7 peding the creation, development, and expan8 sion of small business concerns, in accordance 

9 with this section, by— 

10 ‘‘(i) reservation-based American Indi11 ans; 

12 ‘‘(ii) Alaska Natives; and 

13 ‘‘(iii) Native Hawaiians. 

14 ‘‘(2) 5-YEAR PROJECTS.— 

15 ‘‘(A) IN GENERAL.—Each Native Amer16 ican business center that receives assistance 

17 under paragraph (1)(A) shall conduct a 5-year 

18 project that offers culturally tailored business 

19 development assistance in the form of— 

20 ‘‘(i) financial education, including 

21 training and counseling in— 

22 ‘‘(I) applying for and securing 

23 business credit and investment cap24 ital; 


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1 ‘‘(II) preparing and presenting fi2 nancial statements; and 

3 ‘‘(III) managing cash flow and 

4 other financial operations of a busi5 ness concern; 

6 ‘‘(ii) management education, including 

7 training and counseling in planning, orga8 nizing, staffing, directing, and controlling 

9 each major activity and function of a small 

10 business concern; and 

11 ‘‘(iii) marketing education, including 

12 training and counseling in— 

13 ‘‘(I) identifying and segmenting 

14 domestic and international market op15 portunities; 

16 ‘‘(II) preparing and executing 

17 marketing plans; 

18 ‘‘(III) developing pricing strate19 gies; 

20 ‘‘(IV) locating contract opportu21 nities; 

22 ‘‘(V) negotiating contracts; and 

23 ‘‘(VI) utilizing varying public re24 lations and advertising techniques. 


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1 ‘‘(B) BUSINESS DEVELOPMENT ASSIST2 ANCE RECIPIENTS.—The business development 

3 assistance under subparagraph (A) shall be of4 fered to prospective and current owners of small 

5 business concerns that are owned by— 

6 ‘‘(i) American Indians or tribal gov7 ernments, and located on or near tribal 

8 lands; 

9 ‘‘(ii) Alaska Natives or Alaska Native 

10 corporations; or 

11 ‘‘(iii) Native Hawaiians or Native Ha12 waiian Organizations. 

13 ‘‘(3) FORM OF FEDERAL FINANCIAL ASSIST14 ANCE.— 

15 ‘‘(A) DOCUMENTATION.— 

16 ‘‘(i) IN GENERAL.—The financial as17 sistance to Native American business cen18 ters authorized under this subsection may 

19 be made by grant, contract, or cooperative 

20 agreement. 

21 ‘‘(ii) EXCEPTION.—Financial assist22 ance under this subsection to Alaska Na23 tive corporations or Native Hawaiian Or24 ganizations may only be made by grant. 

25 ‘‘(B) PAYMENTS.— 


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1 ‘‘(i) TIMING.—Payments made under 

2 this subsection may be disbursed in an an3 nual lump sum or in periodic installments, 

4 at the request of the recipient. 

5 ‘‘(ii) ADVANCE.—The Administration 

6 may disburse not more than 25 percent of 

7 the annual amount of Federal financial as8 sistance awarded to a Native American 

9 small business center after notice of the 

10 award has been issued. 

11 ‘‘(iii) NO MATCHING REQUIREMENT.— 

12 The Administration shall not require a 

13 grant recipient to match grant funding re14 ceived under this subsection with non-Fed15 eral resources as a condition of receiving 

16 the grant. 

17 ‘‘(4) CONTRACT AND COOPERATIVE AGREE18 MENT AUTHORITY.—A Native American business 

19 center may enter into a contract or cooperative 

20 agreement with a Federal department or agency to 

21 provide specific assistance to Native American and 

22 other underserved small business concerns located on 

23 or near tribal lands, to the extent that such contract 

24 or cooperative agreement is consistent with the 


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1 terms of any assistance received by the Native 

2 American business center from the Administration. 

3 ‘‘(5) APPLICATION PROCESS.— 

4 ‘‘(A) SUBMISSION OF A 5-YEAR PLAN.— 

5 Each applicant for assistance under paragraph 

6 (1) shall submit a 5-year plan to the Adminis7 tration on proposed assistance and training ac8 tivities. 

9 ‘‘(B) CRITERIA.— 

10 ‘‘(i) IN GENERAL.—The Administra11 tion shall evaluate and rank applicants in 

12 accordance with predetermined selection 

13 criteria that shall be stated in terms of rel14 ative importance. 

15 ‘‘(ii) PUBLIC NOTICE.—The criteria 

16 required by this paragraph and their rel17 ative importance shall be made publicly 

18 available, within a reasonable time, and 

19 stated in each solicitation for applications 

20 made by the Administration. 

21 ‘‘(iii) CONSIDERATIONS.—The criteria 

22 required by this paragraph shall include— 

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1 grade the business skills of current or 

2 potential owners of Native American 

3 small business concerns; 

4 ‘‘(II) the ability of the applicant 

5 to commence a project within a min6 imum amount of time; 

7 ‘‘(III) the ability of the applicant 

8 to provide quality training and serv9 ices to a significant number of Native 

10 Americans; 

11 ‘‘(IV) previous assistance from 

12 the Administration to provide services 

13 in Native American communities; and 

14 ‘‘(V) the proposed location for 

15 the Native American business center 

16 site, with priority given based on the 

17 proximity of the center to the popu18 lation being served and to achieve a 

19 broad geographic dispersion of the 

20 centers. 

21 ‘‘(6) PROGRAM EXAMINATION.— 

22 ‘‘(A) IN GENERAL.—Each Native Amer23 ican business center established pursuant to 

24 this subsection shall annually provide the Ad25 ministration with an itemized cost breakdown of 


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1 actual expenditures incurred during the pre2 ceding year. 

3 ‘‘(B) ADMINISTRATION ACTION.—Based on 

4 information received under subparagraph (A), 

5 the Administration shall— 

6 ‘‘(i) develop and implement an annual 

7 programmatic and financial examination of 

8 each Native American business center as9 sisted pursuant to this subsection; and 

10 ‘‘(ii) analyze the results of each exam11 ination conducted under clause (i) to deter12 mine the programmatic and financial via13 bility of each Native American business 

14 center. 

15 ‘‘(C) CONDITIONS FOR CONTINUED FUND16 ING.—In determining whether to renew a grant, 

17 contract, or cooperative agreement with a Na18 tive American business center, the Administra19 tion— 

20 ‘‘(i) shall consider the results of the 

21 most recent examination of the center 

22 under subparagraph (B), and, to a lesser 

23 extent, previous examinations; and 

24 ‘‘(ii) may withhold such renewal, if 

25 the Administration determines that— 


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1 ‘‘(I) the center has failed to pro2 vide adequate information required to 

3 be provided under subparagraph (A), 

4 or the information provided by the 

5 center is inadequate; or 

6 ‘‘(II) the center has failed to pro7 vide adequate information required to 

8 be provided by the center for purposes 

9 of the report of the Administration 

10 under subparagraph (E). 

11 ‘‘(D) CONTINUING CONTRACT AND COOP12 ERATIVE AGREEMENT AUTHORITY.— 

13 ‘‘(i) IN GENERAL.—The authority of 

14 the Administrator to enter into contracts 

15 or cooperative agreements in accordance 

16 with this subsection shall be in effect for 

17 each fiscal year only to the extent and in 

18 the amounts as are provided in advance in 

19 appropriations Acts. 

20 ‘‘(ii) RENEWAL.—After the Adminis21 trator has entered into a contract or coop22 erative agreement with any Native Amer23 ican business center under this subsection, 

24 it shall not suspend, terminate, or fail to 

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1 erative agreement unless the Administrator 

2 provides the center with written notifica3 tion setting forth the reasons therefore and 

4 affords the center an opportunity for a 

5 hearing, appeal, or other administrative 

6 proceeding under chapter 5 of title 5, 

7 United States Code. 

8 ‘‘(E) MANAGEMENT REPORT.— 

9 ‘‘(i) IN GENERAL.—The Administra10 tion shall prepare and submit to the Com11 mittee on Small Business and Entrepre12 neurship of the Senate and the Committee 

13 on Small Business of the House of Rep14 resentatives an annual report on the effec15 tiveness of all projects conducted by Native 

16 American business centers under this sub17 section and any pilot programs adminis18 tered by the Office of Native American Af19 fairs. 

20 ‘‘(ii) CONTENTS.—Each report sub21 mitted under clause (i) shall include, with 

22 respect to each Native American business 

23 center receiving financial assistance under 

24 this subsection— 


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1 ‘‘(I) the number of individuals re2 ceiving assistance from the Native 

3 American business center; 

4 ‘‘(II) the number of startup busi5 ness concerns created; 

6 ‘‘(III) the number of existing 

7 businesses seeking to expand employ8 ment; 

9 ‘‘(IV) jobs created or maintained, 

10 on an annual basis, by Native Amer11 ican small business concerns assisted 

12 by the center since receiving funding 

13 under this Act; 

14 ‘‘(V) to the maximum extent 

15 practicable, the capital investment and 

16 loan financing utilized by emerging 

17 and expanding businesses that were 

18 assisted by a Native American busi19 ness center; and 

20 ‘‘(VI) the most recent examina21 tion, as required under subparagraph 

22 (B), and the subsequent determina23 tion made by the Administration 

24 under that subparagraph. 


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1 ‘‘(7) ANNUAL REPORT.—Each entity receiving 

2 financial assistance under this subsection shall annu3 ally report to the Administration on the services pro4 vided with such financial assistance, including— 

5 ‘‘(A) the number of individuals assisted, 

6 categorized by ethnicity; 

7 ‘‘(B) the number of hours spent providing 

8 counseling and training for those individuals; 

9 ‘‘(C) the number of startup small business 

10 concerns created or maintained; 

11 ‘‘(D) the gross receipts of assisted small 

12 business concerns; 

13 ‘‘(E) the number of jobs created or main14 tained at assisted small business concerns; and 

15 ‘‘(F) the number of Native American jobs 

16 created or maintained at assisted small business 

17 concerns. 

18 ‘‘(8) RECORD RETENTION.— 

19 ‘‘(A) APPLICATIONS.—The Administration 

20 shall maintain a copy of each application sub21 mitted under this subsection for not less than 

22 7 years. 

23 ‘‘(B) ANNUAL REPORTS.—The Administra24 tion shall maintain copies of the information 

25 collected under paragraph (6)(A) indefinitely. 


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1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated $5,000,000 for each of 

3 the fiscal years 2006 through 2010, to carry out the Na4 tive American Small Business Development Program, au5 thorized under subsection (c).’’. 

6 SEC. 1603. PILOT PROGRAMS. 

7 (a) DEFINITIONS.—In this section: 

8 (1) INCORPORATION BY REFERENCE.—The 

9 terms defined in section 39(a) of the Small Business 

10 Act (as added by this title) have the same meanings 

11 as in that section 39(a) when used in this section. 

12 (2) JOINT PROJECT.—The term ‘‘joint project’’ 

13 means the combined resources and expertise of 2 or 

14 more distinct entities at a physical location dedi15 cated to assisting the Native American community. 

16 (b) NATIVE AMERICAN DEVELOPMENT GRANT PILOT

17 PROGRAM.— 

18 (1) AUTHORIZATION.— 

19 (A) IN GENERAL.—There is established a 

20 4-year pilot program under which the Adminis21 tration is authorized to award Native American 

22 development grants to provide culturally tai23 lored business development training and related 

24 services to Native Americans and Native Amer25 ican small business concerns. 


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1 (B) ELIGIBLE ORGANIZATIONS.—The 

2 grants authorized under subparagraph (A) may 

3 be awarded to— 

4 (i) any small business development 

5 center; or 

6 (ii) any private, nonprofit organization 

7 that— 

8 (I) has members of an Indian 

9 tribe comprising a majority of its 

10 board of directors; 

11 (II) is a Native Hawaiian Orga12 nization; or 

13 (III) is an Alaska Native cor14 poration. 

15 (C) AMOUNTS.—The Administration shall 

16 not award a grant under this subsection in an 

17 amount which exceeds $100,000 for each year 

18 of the project. 

19 (D) GRANT DURATION.—Each grant under 

20 this subsection shall be awarded for not less 

21 than a 2-year period and not more than a 4- 

22 year period. 

23 (2) CONDITIONS FOR PARTICIPATION.—Each 

24 entity desiring a grant under this subsection shall 


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1 submit an application to the Administration that 

2 contains— 

3 (A) a certification that the applicant— 

4 (i) is a small business development 

5 center or a private, nonprofit organization 

6 under paragraph (1)(B); 

7 (ii) employs an executive director or 

8 program manager to manage the facility; 

9 and 

10 (iii) agrees— 

11 (I) to a site visit as part of the 

12 final selection process; 

13 (II) to an annual programmatic 

14 and financial examination; and 

15 (III) to the maximum extent 

16 practicable, to remedy any problems 

17 identified pursuant to that site visit or 

18 examination; 

19 (B) information demonstrating that the 

20 applicant has the ability and resources to meet 

21 the needs, including cultural needs, of the Na22 tive Americans to be served by the grant; 

23 (C) information relating to proposed assist24 ance that the grant will provide, including— 


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1 (i) the number of individuals to be as2 sisted; and 

3 (ii) the number of hours of counseling, 

4 training, and workshops to be provided; 

5 (D) information demonstrating the effec6 tive experience of the applicant in— 

7 (i) conducting financial, management, 

8 and marketing assistance programs de9 signed to impart or upgrade the business 

10 skills of current or prospective Native 

11 American business owners; 

12 (ii) providing training and services to 

13 a representative number of Native Ameri14 cans; 

15 (iii) using resource partners of the 

16 Administration and other entities, includ17 ing universities, tribal governments, or 

18 tribal colleges; and 

19 (iv) the prudent management of fi20 nances and staffing; 

21 (E) the location where the applicant will 

22 provide training and services to Native Ameri23 cans; and 

24 (F) a multiyear plan, corresponding to the 

25 length of the grant, that describes— 


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1 (i) the number of Native Americans 

2 and Native American small business con3 cerns to be served by the grant; 

4 (ii) in the continental United States, 

5 the number of Native Americans to be 

6 served by the grant; and 

7 (iii) the training and services to be 

8 provided to a representative number of Na9 tive Americans. 

10 (3) REVIEW OF APPLICATIONS.—The Adminis11 tration shall— 

12 (A) evaluate and rank applicants under 

13 paragraph (2) in accordance with predeter14 mined selection criteria that is stated in terms 

15 of relative importance; 

16 (B) include such criteria in each solicita17 tion under this subsection and make such infor18 mation available to the public; and 

19 (C) approve or disapprove each completed 

20 application submitted under this subsection not 

21 later than 60 days after the date of submission. 

22 (4) ANNUAL REPORT.—Each recipient of a Na23 tive American development grant under this sub24 section shall annually report to the Administration 

25 on the impact of the grant funding, including— 


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1 (A) the number of individuals assisted, cat2 egorized by ethnicity; 

3 (B) the number of hours spent providing 

4 counseling and training for those individuals; 

5 (C) the number of startup small business 

6 concerns created or maintained with assistance 

7 from a Native American business center; 

8 (D) the gross receipts of assisted small 

9 business concerns; 

10 (E) the number of jobs created or main11 tained at assisted small business concerns; and 

12 (F) the number of Native American jobs 

13 created or maintained at assisted small business 

14 concerns. 

15 (5) RECORD RETENTION.— 

16 (A) APPLICATIONS.—The Administration 

17 shall maintain a copy of each application sub18 mitted under this subsection for not less than 

19 7 years. 

20 (B) ANNUAL REPORTS.—The Administra21 tion shall maintain copies of the information 

22 collected under paragraph (4) indefinitely. 

23 (c) AMERICAN INDIAN TRIBAL ASSISTANCE CENTER

24 GRANT PILOT PROGRAM.— 

25 (1) AUTHORIZATION.— 


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1 (A) IN GENERAL.—There is established a 

2 4-year pilot program, under which the Adminis3 tration shall award not less than 3 American 

4 Indian Tribal Assistance Center grants to es5 tablish joint projects to provide culturally tai6 lored business development assistance to pro7 spective and current owners of small business 

8 concerns located on or near tribal lands. 

9 (B) ELIGIBLE ORGANIZATIONS.— 

10 (i) CLASS 1.—Not fewer than 1 grant 

11 shall be awarded to a joint project per12 formed by a Native American business cen13 ter, a Native American business develop14 ment center, and a small business develop15 ment center. 

16 (ii) CLASS 2.—Not fewer than 2 

17 grants shall be awarded to joint projects 

18 performed by a Native American business 

19 center and a Native American business de20 velopment center. 

21 (C) AMOUNTS.—The Administration shall 

22 not award a grant under this subsection in an 

23 amount which exceeds $200,000 for each year 

24 of the project. 


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1 (D) GRANT DURATION.—Each grant under 

2 this subsection shall be awarded for a 3-year 

3 period. 

4 (2) CONDITIONS FOR PARTICIPATION.—Each 

5 entity desiring a grant under this subsection shall 

6 submit to the Administration a joint application that 

7 contains— 

8 (A) a certification that each participant of 

9 the joint application— 

10 (i) is either a Native American busi11 ness center, a Native American business 

12 development center, or a small business de13 velopment center; 

14 (ii) employs an executive director or 

15 program manager to manage the center; 

16 and 

17 (iii) as a condition of receiving an 

18 American Indian Tribal Assistance Center 

19 grant, agrees— 

20 (I) to an annual programmatic 

21 and financial examination; and 

22 (II) to the maximum extent prac23 ticable, to remedy any problems iden24 tified pursuant to that examination; 


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1 (B) information demonstrating an historic 

2 commitment to providing assistance to Native 

3 Americans— 

4 (i) residing on or near tribal lands; or 

5 (ii) operating a small business concern 

6 on or near tribal lands; 

7 (C) information demonstrating that each 

8 participant of the joint application has the abil9 ity and resources to meet the needs, including 

10 the cultural needs, of the Native Americans to 

11 be served by the grant; 

12 (D) information relating to proposed as13 sistance that the grant will provide, including— 

14 (i) the number of individuals to be as15 sisted; and 

16 (ii) the number of hours of counseling, 

17 training, and workshops to be provided; 

18 (E) information demonstrating the effec19 tive experience of each participant of the joint 

20 application in— 

21 (i) conducting financial, management, 

22 and marketing assistance programs, de23 signed to impart or upgrade the business 

24 skills of current or prospective Native 

25 American business owners; and 


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1 (ii) the prudent management of fi2 nances and staffing; and 

3 (F) a plan for the length of the grant, that 

4 describes— 

5 (i) the number of Native Americans 

6 and Native American small business con7 cerns to be served by the grant; and 

8 (ii) the training and services to be 

9 provided. 

10 (3) REVIEW OF APPLICATIONS.—The Adminis11 tration shall— 

12 (A) evaluate and rank applicants under 

13 paragraph (2) in accordance with predeter14 mined selection criteria that is stated in terms 

15 of relative importance; 

16 (B) include such criteria in each solicita17 tion under this subsection and make such infor18 mation available to the public; and 

19 (C) approve or disapprove each application 

20 submitted under this subsection not later than 

21 60 days after the date of submission. 

22 (4) ANNUAL REPORT.—Each recipient of an 

23 American Indian tribal assistance center grant 

24 under this subsection shall annually report to the 

25 Administration on the impact of the grant funding 


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1 received during the reporting year, and the cumu2 lative impact of the grant funding received since the 

3 initiation of the grant, including— 

4 (A) the number of individuals assisted, cat5 egorized by ethnicity; 

6 (B) the number of hours of counseling and 

7 training provided and workshops conducted; 

8 (C) the number of startup business con9 cerns created or maintained with assistance 

10 from a Native American business center; 

11 (D) the gross receipts of assisted small 

12 business concerns; 

13 (E) the number of jobs created or main14 tained at assisted small business concerns; and 

15 (F) the number of Native American jobs 

16 created or maintained at assisted small business 

17 concerns. 

18 (5) RECORD RETENTION.— 

19 (A) APPLICATIONS.—The Administration 

20 shall maintain a copy of each application sub21 mitted under this subsection for not less than 

22 7 years. 

23 (B) ANNUAL REPORTS.—The Administra24 tion shall maintain copies of the information 

25 collected under paragraph (4) indefinitely. 


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1 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated— 

3 (1) $1,000,000 for each of the fiscal years 2006 

4 through 2009, to carry out the Native American De5 velopment Grant Pilot Program, authorized under 

6 subsection (b); and 

7 (2) $1,000,000 for each of the fiscal years 2006 

8 through 2009, to carry out the American Indian 

9 Tribal Assistance Center Grant Pilot Program, au10 thorized under subsection (c). 

11 TITLE XVII—NATIONAL SMALL 

12 BUSINESS REGULATORY AS13 SISTANCE 

14 SEC. 1701. SHORT TITLE. 

15 This title may be cited as the ‘‘National Small Busi16 ness Regulatory Assistance Act of 2006’’. 

17 SEC. 1702. PURPOSE. 

18 The purpose of this title is to establish a 4-year pilot 

19 program to— 

20 (1) provide confidential assistance to small 

21 business concerns; 

22 (2) provide small business concerns with the in23 formation necessary to improve their rate of compli24 ance with Federal and State regulations derived 

25 from Federal law; 


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1 (3) create a partnership among Federal agen2 cies to increase outreach efforts to small business 

3 concerns with respect to regulatory compliance; 

4 (4) provide a mechanism for unbiased feedback 

5 to Federal agencies on the regulatory environment 

6 for small business concerns; and 

7 (5) expand the services delivered by the small 

8 business development centers under section 

9 21(c)(3)(H) of the Small Business Act to improve 

10 access to programs to assist small business concerns 

11 with regulatory compliance. 

12 SEC. 1703. SMALL BUSINESS REGULATORY ASSISTANCE 

13 PILOT PROGRAM. 

14 (a) DEFINITIONS.—In this section: 

15 (1) ASSOCIATION.—The term ‘‘association’’ 

16 means the association established pursuant to sec17 tion 21(a)(3)(A) of the Small Business Act (15 

18 U.S.C. 648(a)(3)(A)) representing a majority of 

19 small business development centers. 

20 (2) PARTICIPATING SMALL BUSINESS DEVELOP21 MENT CENTER.—The term ‘‘participating small 

22 business development center’’ means a small busi23 ness development center participating in the pilot 

24 program established under this title. 


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1 (3) REGULATORY COMPLIANCE ASSISTANCE.— 

2 The term ‘‘regulatory compliance assistance’’ means 

3 assistance provided by a small business development 

4 center to a small business concern to assist and fa5 cilitate the concern in complying with Federal and 

6 State regulatory requirements derived from Federal 

7 law. 

8 (4) SMALL BUSINESS DEVELOPMENT CEN9 TER.—The term ‘‘small business development cen10 ter’’ means a small business development center de11 scribed in section 21 of the Small Business Act (15 

12 U.S.C. 648). 

13 (5) STATE.—The term ‘‘State’’ means each of 

14 the several States, the District of Columbia, the 

15 Commonwealth of Puerto Rico, the Virgin Islands, 

16 American Samoa, and Guam. 

17 (b) AUTHORITY.—In accordance with this section, 

18 the Administrator shall establish a pilot program to pro19 vide regulatory compliance assistance to small business 

20 concerns through participating small business develop21 ment centers. 

22 (c) SMALL BUSINESS DEVELOPMENT CENTERS.— 

23 (1) IN GENERAL.—In carrying out the pilot 

24 program established under this section, the Adminis25 trator shall enter into arrangements with particiVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00325 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 pating small business development centers under 

2 which such Centers shall— 

3 (A) provide access to information and re4 sources, including current Federal and State 

5 nonpunitive compliance and technical assistance 

6 programs similar to those established under 

7 section 507 of the Clean Air Act Amendments 

8 of 1990 (42 U.S.C. 7661f); 

9 (B) conduct training and educational ac10 tivities; 

11 (C) offer confidential, free of charge, one12 on-one, in-depth counseling to the owners and 

13 operators of small business concerns regarding 

14 compliance with Federal and State regulations 

15 derived from Federal law, provided that such 

16 counseling is not considered to be the practice 

17 of law in a State in which a small business de18 velopment center is located or in which such 

19 counseling is conducted; 

20 (D) provide technical assistance; 

21 (E) give referrals to experts and other pro22 viders of compliance assistance who meet such 

23 standards for educational, technical, and profes24 sional competency as are established by the Ad25 ministrator; and 


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1 (F) form partnerships with Federal compli2 ance programs. 

3 (2) REPORTS.—Each participating small busi4 ness development center shall transmit to the Ad5 ministrator and the Chief Counsel for Advocacy of 

6 the Small Business Administration, as the Adminis7 trator may direct, a quarterly report that includes— 

8 (A) a summary of the regulatory compli9 ance assistance provided by the Center under 

10 the pilot program; 

11 (B) the number of small business concerns 

12 assisted under the pilot program; and 

13 (C) for every fourth report, any regulatory 

14 compliance information based on Federal law 

15 that a Federal or State agency has provided to 

16 the center during the preceding year and re17 quested that it be disseminated to small busi18 ness concerns. 

19 (d) ELIGIBILITY.—A small business development cen20 ter shall be eligible to receive assistance under the pilot 

21 program established under this section only if such Center 

22 is certified under section 21(k)(2) of the Small Business 

23 Act (15 U.S.C. 648(k)(2)). 

24 (e) SELECTION OF PARTICIPATING SMALL BUSINESS

25 DEVELOPMENT CENTERS.— 


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1 (1) GROUPINGS.— 

2 (A) CONSULTATION.—The Administrator 

3 shall select the small business development cen4 ter Programs of 2 States from each of the 

5 groups of States described in subparagraph (B) 

6 to participate in the pilot program established 

7 under this section. 

8 (B) GROUPS.—The groups described in 

9 this subparagraph as follows: 

10 (i) GROUP 1.—Group 1 shall consist 

11 of Maine, Massachusetts, New Hampshire, 

12 Connecticut, Vermont, and Rhode Island. 

13 (ii) GROUP 2.—Group 2 shall consist 

14 of New York, New Jersey, Puerto Rico, 

15 and the Virgin Islands. 

16 (iii) GROUP 3.—Group 3 shall consist 

17 of Pennsylvania, Maryland, West Virginia, 

18 Virginia, the District of Columbia, and 

19 Delaware. 

20 (iv) GROUP 4.—Group 4 shall consist 

21 of Georgia, Alabama, North Carolina, 

22 South Carolina, Mississippi, Florida, Ken23 tucky, and Tennessee. 


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1 (v) GROUP 5.—Group 5 shall consist 

2 of Illinois, Ohio, Michigan, Indiana, Wis3 consin, and Minnesota. 

4 (vi) GROUP 6.—Group 6 shall consist 

5 of Texas, New Mexico, Arkansas, Okla6 homa, and Louisiana. 

7 (vii) GROUP 7.—Group 7 shall consist 

8 of Missouri, Iowa, Nebraska, and Kansas. 

9 (viii) GROUP 8.—Group 8 shall consist 

10 of Colorado, Wyoming, North Dakota, 

11 South Dakota, Montana, and Utah. 

12 (ix) GROUP 9.—Group 9 shall consist 

13 of California, Guam, American Samoa, 

14 Hawaii, Nevada, and Arizona. 

15 (x) GROUP 10.—Group 10 shall con16 sist of Washington, Alaska, Idaho, and Or17 egon. 

18 (2) DEADLINE FOR SELECTION.—The Adminis19 trator shall make selections under this subsection 

20 not later than 6 months after the date of publication 

21 of final regulations under section 1704. 

22 (f) MATCHING REQUIREMENT.—Subparagraphs (A) 

23 and (B) of section 21(a)(4) of the Small Business Act (15 

24 U.S.C. 648(a)(4)) shall apply to assistance made available 

25 under the pilot program established under this section. 


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1 (g) GRANT AMOUNTS.—Each State program selected 

2 to receive a grant under subsection (e) shall be eligible 

3 to receive a grant in an amount equal to— 

4 (1) not less than $150,000 per fiscal year; and 

5 (2) not more than $300,000 per fiscal year. 

6 (h) EVALUATION AND REPORT.—The Comptroller 

7 General of the United States shall— 

8 (1) not later than 30 months after the date of 

9 disbursement of the first grant under the pilot pro10 gram established under this section, initiate an eval11 uation of the pilot program; and 

12 (2) not later than 6 months after the date of 

13 the initiation of the evaluation under paragraph (1), 

14 transmit to the Administrator, the Chief Counsel for 

15 Advocacy, the Committee on Small Business and 

16 Entrepreneurship of the Senate, and the Committee 

17 on Small Business of the House of Representatives, 

18 a report containing— 

19 (A) the results of the evaluation; and 

20 (B) any recommendations as to whether 

21 the pilot program, with or without modification, 

22 should be extended to include the participation 

23 of all small business development centers. 

24 (i) POSTING OF INFORMATION.—Not later than 90 

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1 trator shall post on the website of the Administration and 

2 publish in the Federal Register a guidance document de3 scribing the requirements of an application for assistance 

4 under this section. 

5 (j) AUTHORIZATION OF APPROPRIATIONS.— 

6 (1) IN GENERAL.—There are authorized to be 

7 appropriated to carry out this section— 

8 (A) $5,000,000 for the first fiscal year be9 ginning after the date of enactment of this Act; 

10 and 

11 (B) $5,000,000 for each of the 3 fiscal 

12 years following the fiscal year described in sub13 paragraph (A). 

14 (2) LIMITATION ON USE OF OTHER FUNDS.— 

15 The Administrator may carry out the pilot program 

16 established under this section only with amounts ap17 propriated in advance specifically to carry out this 

18 section. 

19 (k) TERMINATION.—The Small Business Regulatory 

20 Assistance Pilot Program established under this section 

21 shall terminate 4 years after the date of disbursement of 

22 the first grant under the pilot program. 

23 SEC. 1704. RULEMAKING. 

24 After providing notice and an opportunity for com25 ment, and after consulting with the association (but not 


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1 later than 180 days after the date of enactment of this 

2 Act), the Administrator shall promulgate final regulations 

3 to carry out this title, including regulations that estab4 lish— 

5 (1) priorities for the types of assistance to be 

6 provided under the pilot program established under 

7 this title; 

8 (2) standards relating to educational, technical, 

9 and support services to be provided by participating 

10 small business development centers; 

11 (3) standards relating to any national service 

12 delivery and support function to be provided by the 

13 association under the pilot program; 

14 (4) standards relating to any work plan that 

15 the Administrator may require a participating small 

16 business development center to develop; and 

17 (5) standards relating to the educational, tech18 nical, and professional competency of any expert or 

19 other assistance provider to whom a small business 

20 concern may be referred for compliance assistance 

21 under the pilot program. 


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1 TITLE XVIII—INTERMEDIARY 

2 LENDING PILOT PROGRAM 

3 SEC. 1801. SHORT TITLE. 

4 This title may be cited as the ‘‘Small Business Inter5 mediary Lending Pilot Program Act of 2006’’. 

6 SEC. 1802. FINDINGS. 

7 Congress finds the following: 

8 (1) Small and emerging businesses, particularly 

9 startups and businesses that lack sufficient or con10 ventional collateral, continue to face barriers access11 ing midsized loans in amounts between $35,000 and 

12 $200,000, with affordable terms and conditions. 

13 (2) Consolidation in the banking industry has 

14 resulted in a decrease in the number of small, locally 

15 controlled banks with not more than $100,000,000 

16 in assets and has changed the method by which 

17 banks make small business credit decisions with— 

18 (A) credit scoring techniques replacing re19 lationship-based lending, which often works to 

20 the disadvantage of small or start-up businesses 

21 that do not conform with a bank’s standardized 

22 credit formulas; and 

23 (B) less flexible terms and conditions, 

24 which are often necessary for small and emerg25 ing businesses. 


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1 (3) In the environment described in paragraphs 

2 (1) and (2), nonprofit intermediary lenders, includ3 ing community development corporations, provide fi4 nancial resources that supplement the small business 

5 lending and investments of a bank by— 

6 (A) providing riskier, up front, or subordi7 nated capital; 

8 (B) offering flexible terms and under9 writing procedures; and 

10 (C) providing technical assistance to busi11 nesses in order to reduce the transaction costs 

12 and risk exposure of banks. 

13 (4) Several Federal programs, including the 

14 Microloan Program under section 7(m) of the Small 

15 Business Act (15 U.S.C. 636(m)) and the Inter16 mediary Relending Program of the Department of 

17 Agriculture, have demonstrated the effectiveness of 

18 working through nonprofit intermediaries to address 

19 the needs of small business concerns that are unable 

20 to access capital through conventional sources. 

21 (5) More than 1,000 nonprofit intermediary 

22 lenders in the United States are— 

23 (A) successfully providing financial and 

24 technical assistance to small and emerging busi25 nesses; 


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1 (B) working with banks and other lenders 

2 to leverage additional capital for their business 

3 borrowers; and 

4 (C) creating employment opportunities for 

5 low-income individuals through their lending 

6 and business development activities. 

7 SEC. 1803. SMALL BUSINESS INTERMEDIARY LENDING 

8 PILOT PROGRAM. 

9 (a) IN GENERAL.—Section 7 of the Small Business 

10 Act (15 U.S.C. 636) is amended by inserting after sub11 section (k) the following: 

12 ‘‘(l) SMALL BUSINESS INTERMEDIARY LENDING

13 PROGRAM.— 

14 ‘‘(1) DEFINITIONS.—In this subsection— 

15 ‘‘(A) the term ‘intermediary’ means a pri16 vate, nonprofit entity that seeks to borrow, or 

17 has borrowed, funds from the Administration to 

18 provide midsize loans to small business con19 cerns under this subsection, including— 

20 ‘‘(i) a private, nonprofit community 

21 development corporation; 

22 ‘‘(ii) a consortium of private, non23 profit organizations or nonprofit commu24 nity development corporations; 


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1 ‘‘(iii) a quasi-governmental economic 

2 development entity (such as a planning 

3 and development district), other than a 

4 State, county, or municipal government; 

5 and 

6 ‘‘(iv) an agency of or nonprofit entity 

7 established by a Native American Tribal 

8 Government; and 

9 ‘‘(B) the term ‘midsize loan’ means a fixed 

10 rate loan of not less than $35,000 and not 

11 more than $200,000, made by an intermediary 

12 to a startup, newly established, or growing 

13 small business concern. 

14 ‘‘(2) ESTABLISHMENT.—There is established a 

15 3-year small business intermediary lending pilot pro16 gram (referred to in this subsection as the ‘Pro17 gram’), under which the Administration may provide 

18 direct loans to eligible intermediaries, for the pur19 pose of making fixed interest rate midsize loans to 

20 startup, newly established, and growing small busi21 ness concerns. 

22 ‘‘(3) PURPOSES.—The purposes of the Program 

23 are— 


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1 ‘‘(A) to assist small business concerns in 

2 those areas suffering from a lack of credit due 

3 to poor economic conditions; 

4 ‘‘(B) to create employment opportunities 

5 for low-income individuals; 

6 ‘‘(C) to establish a midsize loan program 

7 to be administered by the Administration to 

8 provide loans to eligible intermediaries to enable 

9 such intermediaries to provide small scale loans, 

10 particularly loans in amounts averaging not 

11 more than $150,000, to startup, newly estab12 lished, or growing small business concerns for 

13 working capital or the acquisition of materials, 

14 supplies, or equipment; 

15 ‘‘(D) to test the effectiveness of nonprofit 

16 intermediaries— 

17 ‘‘(i) as a delivery system for a midsize 

18 loan program; and 

19 ‘‘(ii) in addressing the credit needs of 

20 small business concerns and leveraging 

21 other sources of credit; and 

22 ‘‘(E) to determine the advisability and fea23 sibility of implementing a midsize loan program 

24 nationwide. 


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1 ‘‘(4) ELIGIBILITY FOR PARTICIPATION.—An 

2 intermediary shall be eligible to receive loans under 

3 the Program if the intermediary has not less than 

4 1 year of experience making loans to startup, newly 

5 established, or growing small business concerns. 

6 ‘‘(5) LOANS TO INTERMEDIARIES.— 

7 ‘‘(A) APPLICATION.—Each intermediary 

8 desiring a loan under this subsection shall sub9 mit an application to the Administration that 

10 describes— 

11 ‘‘(i) the type of small business con12 cerns to be assisted; 

13 ‘‘(ii) the size and range of loans to be 

14 made; 

15 ‘‘(iii) the geographic area to be served 

16 and its economic, poverty, and unemploy17 ment characteristics; 

18 ‘‘(iv) the status of small business con19 cerns in the area to be served and an anal20 ysis of the availability of credit; and 

21 ‘‘(v) the qualifications of the applicant 

22 to carry out this subsection. 

23 ‘‘(B) LOAN LIMITS.—Notwithstanding sub24 section (a)(3), no loan may be made to an 

25 intermediary under this subsection if the total 


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1 amount outstanding and committed to the 

2 intermediary from the business loan and invest3 ment fund established by this Act would, as a 

4 result of such loan, exceed $1,000,000 during 

5 the participation of the intermediary in the Pro6 gram. 

7 ‘‘(C) LOAN DURATION.—Loans made by 

8 the Administration under this subsection shall 

9 be for a maximum term of 20 years. 

10 ‘‘(D) APPLICABLE INTEREST RATES.— 

11 Loans made by the Administration to an inter12 mediary under the Program shall bear an an13 nual interest rate equal to 1.00 percent. 

14 ‘‘(E) FEES; COLLATERAL.—The Adminis15 tration may not charge any fees or require col16 lateral with respect to any loan made to an 

17 intermediary under this subsection. 

18 ‘‘(F) LEVERAGE.—Any loan to a small 

19 business concern under this subsection shall not 

20 exceed 75 percent of the total cost of the 

21 project funded by such loan, with the remaining 

22 funds being leveraged from other sources, in23 cluding— 

24 ‘‘(i) banks or credit unions; 


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1 ‘‘(ii) community development financial 

2 institutions; and 

3 ‘‘(iii) other sources with funds avail4 able to the intermediary lender. 

5 ‘‘(G) DELAYED PAYMENTS.—The Adminis6 tration shall not require the repayment of prin7 cipal or interest on a loan made to an inter8 mediary under the Program during the first 2 

9 years of the loan. 

10 ‘‘(6) PROGRAM FUNDING FOR MIDSIZE

11 LOANS.— 

12 ‘‘(A) NUMBER OF PARTICIPANTS.—Under 

13 the Program, the Administration may provide 

14 loans, on a competitive basis, to not more than 

15 20 intermediaries. 

16 ‘‘(B) EQUITABLE DISTRIBUTION OF INTER17 MEDIARIES.—The Administration shall select 

18 and provide funding under the Program to such 

19 intermediaries as will ensure geographic diver20 sity and representation of urban and rural com21 munities. 

22 ‘‘(7) REPORT TO CONGRESS.— 

23 ‘‘(A) INITIAL REPORT.—Not later than 30 

24 months after the date of enactment of the 

25 Small Business Intermediary Lending Pilot 


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1 Program Act of 2006, the Administration shall 

2 submit a report containing an evaluation of the 

3 effectiveness of the Program to— 

4 ‘‘(i) the Committee on Small Business 

5 and Entrepreneurship of the Senate; and 

6 ‘‘(ii) the Committee on Small Busi7 ness of the House of Representatives. 

8 ‘‘(B) ANNUAL REPORT.—Not later than 12 

9 months after the date of enactment of the 

10 Small Business Intermediary Lending Pilot 

11 Program Act of 2006, and annually thereafter, 

12 the Administration shall submit a report con13 taining an evaluation of the effectiveness of the 

14 Program to the Committees described in sub15 paragraph (A). 

16 ‘‘(C) CONTENTS.—The reports submitted 

17 under subparagraphs (A) and (B) shall in18 clude— 

19 ‘‘(i) the numbers and locations of the 

20 intermediaries receiving funds to provide 

21 midsize loans; 

22 ‘‘(ii) the amounts of each loan to an 

23 intermediary; 


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1 ‘‘(iii) the numbers and amounts of 

2 midsize loans made by intermediaries to 

3 small business concerns; 

4 ‘‘(iv) the repayment history of each 

5 intermediary; 

6 ‘‘(v) a description of the loan portfolio 

7 of each intermediary, including the extent 

8 to which it provides midsize loans to small 

9 business concerns in rural and economi10 cally depressed areas; 

11 ‘‘(vi) an estimate of the number of 

12 low-income individuals who have been em13 ployed as a direct result of the Program; 

14 and 

15 ‘‘(vii) any recommendations for legis16 lative changes that would improve the op17 eration of the Program.’’. 

18 (b) RULEMAKING AUTHORITY.—Not later than 180 

19 days after the date of enactment of this Act, the Adminis20 trator shall issue regulations to carry out section 7(l) of 

21 the Small Business Act, as added by subsection (a). 

22 (c) AUTHORIZATION OF APPROPRIATIONS.— 

23 (1) IN GENERAL.—There are authorized to be 

24 appropriated to the Administration such sums as 

25 may be necessary for each of the fiscal years 2007 


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1 through 2009 to provide $20,000,000 in loans under 

2 section 7(l) of the Small Business Act, as added by 

3 subsection (a). 

4 (2) AVAILABILITY.—Any amounts appropriated 

5 pursuant to paragraph (1) shall remain available 

6 until expended. 

7 TITLE XIX—OTHER PROVISIONS 

8 SEC. 1901. COMPLIANCE ASSISTANCE. 

9 (a) IN GENERAL.—Section 212(a) of the Small Busi10 ness Regulatory Enforcement Fairness Act of 1996 (5 

11 U.S.C. 601 note) is amended to read as follows: 

12 ‘‘(a) COMPLIANCE GUIDE.— 

13 ‘‘(1) IN GENERAL.—For each rule or group of 

14 related rules for which an agency is required to pre15 pare a final regulatory flexibility analysis under sec16 tion 605(b) of title 5, United States Code, the agen17 cy shall publish 1 or more guides to assist small en18 tities in complying with the rule, and shall entitle 

19 such publications ‘small entity compliance guides’. 

20 ‘‘(2) PUBLICATION OF GUIDES.—The publica21 tion of each guide under this subsection shall in22 clude— 

23 ‘‘(A) the posting of the guide in an easily 

24 identified location on the website of the agency; 

25 and 


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1 ‘‘(B) distribution of the guide to known in2 dustry contacts, such as small entities, associa3 tions, or industry leaders affected by the rule. 

4 ‘‘(3) PUBLICATION DATE.—An agency shall 

5 publish each guide (including the posting and dis6 tribution of the guide as described under paragraph 

7 (2))— 

8 ‘‘(A) on the same date as the date of publi9 cation of the final rule (or as soon as possible 

10 after that date); and 

11 ‘‘(B) not later than the date on which the 

12 requirements of that rule become effective. 

13 ‘‘(4) COMPLIANCE ACTIONS.— 

14 ‘‘(A) IN GENERAL.—Each guide shall ex15 plain the actions which a small entity is re16 quired to take to comply with a rule. 

17 ‘‘(B) EXPLANATION.—The explanation 

18 under subparagraph (A)— 

19 ‘‘(i) shall include a description of ac20 tions needed to meet the requirements of a 

21 rule, to enable a small entity to know when 

22 such requirements are met; and 

23 ‘‘(ii) if determined appropriate by the 

24 agency, may include a description of pos25 sible procedures, such as conducting tests, 


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1 that may assist a small entity in meeting 

2 such requirements. 

3 ‘‘(C) PROCEDURES.—Procedures described 

4 under subparagraph (B)(ii)— 

5 ‘‘(i) shall be suggestions to assist 

6 small entities; and 

7 ‘‘(ii) shall not be additional require8 ments relating to the rule. 

9 ‘‘(5) AGENCY PREPARATION OF GUIDES.—The 

10 agency shall, in its sole discretion, taking into ac11 count the subject matter of the rule and the lan12 guage of relevant statutes, ensure that the guide is 

13 written using sufficiently plain language likely to be 

14 understood by affected small entities. Agencies may 

15 prepare separate guides covering groups or classes of 

16 similarly affected small entities and may cooperate 

17 with associations of small entities to develop and dis18 tribute such guides. An agency may prepare guides 

19 and apply this section with respect to a rule or a 

20 group of related rules. 

21 ‘‘(6) REPORTING.—Not later than 1 year after 

22 the date of enactment of the Small Business Reau23 thorization and Improvements Act of 2006, and an24 nually thereafter, the head of each agency shall sub25 mit a report to the Committee on Small Business 


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1 and Entrepreneurship of the Senate and the Com2 mittee on Small Business of the House of Rep3 resentatives describing the status of the agency’s 

4 compliance with paragraphs (1) through (5).’’. 

5 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

6 Section 211(3) of the Small Business Regulatory Enforce7 ment Fairness Act of 1996 (5 U.S.C. 601 note) is amend8 ed by inserting ‘‘and entitled’’ after ‘‘designated’’. 

9 SEC. 1902. APPOINTMENT OF OFFICIALS. 

10 (a) IN GENERAL.—Section 4(b)(1) of the Small Busi11 ness Act (15 U.S.C. 633(b)(1)) is amended— 

12 (1) by inserting ‘‘(A)’’ after ‘‘(b)(1)’’; and 

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

14 ‘‘(B) The following officials of the Administration 

15 shall be appointed by and with the advice and consent of 

16 the Senate: 

17 ‘‘(i) The General Counsel. 

18 ‘‘(ii) The Associate Deputy Administrator for 

19 Capital Access. 

20 ‘‘(iii) The Associate Deputy Administrator for 

21 Management and Administration. 

22 ‘‘(iv) The Associate Deputy Administrator for 

23 Entrepreneurial Development. 

24 ‘‘(v) The Associate Deputy Administrator for 

25 Government Contracting and Business Development. 


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1 ‘‘(vi) The Associate Administrator for Disaster 

2 Assistance.’’. 

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

4 subsection (a) shall take effect with respect to any ap5 pointment made after the date of enactment of this Act. 

6 SEC. 1903. SECOND-STAGE PILOT PROGRAM. 

7 (a) PURPOSE.—The purpose of this section is to es8 tablish a 3-year pilot program to— 

9 (1) identify second-stage small business con10 cerns that have the capacity for significant business 

11 growth and job creation; 

12 (2) facilitate business growth and job creation 

13 by second-stage small business concerns through the 

14 development of peer learning opportunities; 

15 (3) utilize the network of small business devel16 opment centers to expand access to peer learning op17 portunities for second-stage small business concerns; 

18 and 

19 (4) assist businesses owned by minority individ20 uals, service-disabled veterans, and women. 

21 (b) DEFINITIONS.—In this section: 

22 (1) COMMUNITY COLLEGE.—The term ‘‘commu23 nity college’’ has the meaning given that term in sec24 tion 3301(3) of the Higher Education Act of 1965 

25 (20 U.S.C. 7011(3)). 


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1 (2) ELIGIBLE ENTITIES.—The term ‘‘eligible 

2 entity’’ means an entity that— 

3 (A) is eligible to receive funding under sec4 tion 21 of the Small Business Act (15 U.S.C. 

5 648); and 

6 (B) submits to the Administrator an appli7 cation that includes— 

8 (i) a plan to— 

9 (I) offer peer learning opportuni10 ties to second-stage small business 

11 concerns; and 

12 (II) transition to providing such 

13 opportunities using nongovernmental 

14 funding; and 

15 (ii) any other information and assur16 ances that the Administrator may require. 

17 (3) HISTORICALLY BLACK COLLEGE.—The term 

18 ‘‘historically Black college’’ means a part B institu19 tion, as defined in section 322(2) of the Higher 

20 Education Act of 1965 (20 U.S.C. 1061(2)). 

21 (4) HISPANIC-SERVING INSTITUTION.—The 

22 term ‘‘Hispanic-serving institution’’ has the meaning 

23 given that term in section 502(a)(5) of the Higher 

24 Education Act of 1965 (20 U.S.C. 1101a(a)(5)). 


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1 (5) MINORITY INSTITUTION.—The term ‘‘mi2 nority institution’’ has the meaning given that term 

3 in section 365(3) of the Higher Education Act of 

4 1965 (20 U.S.C. 1067k(3)). 

5 (6) PEER LEARNING OPPORTUNITIES.—The 

6 term ‘‘peer learning opportunities’’ means formally 

7 organized peer groups of owners, presidents and 

8 chief executive officers in noncompeting second-stage 

9 business concerns, meeting regularly with a profes10 sionally trained facilitator. 

11 (7) PILOT PROGRAM.—The term ‘‘pilot pro12 gram’’ means the program established under sub13 section (c)(1). 

14 (8) SECOND-STAGE SMALL BUSINESS CON15 CERN.— 

16 (A) IN GENERAL.—The term ‘‘second17 stage small business concern’’ means a small 

18 business concern that— 

19 (i) has experienced high growth dem20 onstrated by— 

21 (I) an average annual revenue or 

22 employee growth rate of at least 15 

23 percent during the preceding 3 years; 

24 or 


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1 (II) a combination of any 3 of 

2 the attributes described in subpara3 graph (B); and 

4 (ii) does not exceed the size standard 

5 for the North American Industrial Classi6 fication System code of such concern, as 

7 established pursuant to section 3(a) of the 

8 Small Business Act (15 U.S.C. 632(a)). 

9 (B) ATTRIBUTES.—The attributes de10 scribed in this subparagraph are— 

11 (i) owning proprietary intellectual 

12 property; 

13 (ii) addressing an underserved or 

14 growing market; 

15 (iii) having a sustainable competitive 

16 advantage; 

17 (iv) exporting goods or services out18 side of its community; 

19 (v) having a product or service that is 

20 scalable to a large market; and 

21 (vi) ownership by minority individuals, 

22 service-disabled veterans, or women. 

23 (9) STATE.—The term ‘‘State’’ means each of 

24 the several States, the District of Columbia, the 


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1 Commonwealth of Puerto Rico, the Virgin Islands, 

2 Guam, and American Samoa. 

3 (c) PILOT PROGRAM.— 

4 (1) ESTABLISHMENT.—The Administrator shall 

5 establish and carry out a pilot program to make 

6 grants to eligible entities for the development of peer 

7 learning opportunities for second-stage small busi8 ness concerns in accordance with this section. 

9 (2) SELECTION OF GRANT RECIPIENTS.— 

10 (A) IN GENERAL.—The Administrator 

11 shall select 2 eligible entities from each of the 

12 10 regions described in subparagraph (C) to re13 ceive grants. 

14 (B) CRITERIA FOR SELECTION.—The Ad15 ministrator shall evaluate the plans described in 

16 subsection (b)(2) submitted by eligible entities 

17 and select eligible entities to receive grants on 

18 the basis of the merit of such plans. 

19 (C) REGIONS DESCRIBED.—The regions 

20 described in this subparagraph are as follows: 

21 (i) REGION 1.—Maine, Massachusetts, 

22 New Hampshire, Connecticut, Vermont, 

23 and Rhode Island. 

24 (ii) REGION 2.—New York, New Jer25 sey, Puerto Rico, and the Virgin Islands. 


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1 (iii) REGION 3.—Pennsylvania, Mary2 land, West Virginia, Virginia, the District 

3 of Columbia, and Delaware. 

4 (iv) REGION 4.—Georgia, Alabama, 

5 North Carolina, South Carolina, Mis6 sissippi, Florida, Kentucky, and Tennessee. 

7 (v) REGION 5.—Illinois, Ohio, Michi8 gan, Indiana, Wisconsin, and Minnesota. 

9 (vi) REGION 6.—Texas, New Mexico, 

10 Arkansas, Oklahoma, and Louisiana. 

11 (vii) REGION 7.—Missouri, Iowa, Ne12 braska, and Kansas. 

13 (viii) REGION 8.—Colorado, Wyoming, 

14 North Dakota, South Dakota, Montana, 

15 and Utah. 

16 (ix) REGION 9.—California, Guam, 

17 Hawaii, Nevada, Arizona, and American 

18 Samoa. 

19 (x) REGION 10.—Washington, Alaska, 

20 Idaho, and Oregon. 

21 (D) CONSULTATION.—If small business de22 velopment centers have formed an association 

23 to pursue matters of common concern as au24 thorized under section 21(a)(3)(A) of the Small 

25 Business Act (15 U.S.C. 648(a)(3)(A)), the AdVerDate Aug 31 2005 23:39 Aug 08, 2006 Jkt 049200 PO 00000 Frm 00352 Fmt 6652 Sfmt 6201 E:\BILLS\S3778.PCS S3778

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1 ministrator shall consult with such association 

2 and give substantial weight to the recommenda3 tions of such association in selecting the grant 

4 recipients under this subsection. 

5 (E) DEADLINE FOR INITIAL SELEC6 TIONS.—The Administrator shall make selec7 tions under subparagraph (A) not later than 60 

8 days after the promulgation of regulations 

9 under subsection (d). 

10 (3) USE OF FUNDS.—An eligible entity that re11 ceives a grant under the pilot program shall use the 

12 grant to— 

13 (A) identify second-stage small business 

14 concerns in the service delivery areas of the eli15 gible entity; and 

16 (B) establish and conduct peer learning 

17 opportunities for such second-stage small busi18 ness concerns. 

19 (4) AMOUNT OF GRANT.— 

20 (A) IN GENERAL.—Except as provided in 

21 subparagraph (B), a grant under the pilot pro22 gram shall be in an amount that does not ex23 ceed the product obtained by multiplying— 


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1 (i) the amount made available for 

2 grants under the pilot program for the fis3 cal year for which the grant is made; and 

4 (ii) the ratio that the population of 

5 the State in which the eligible entity is lo6 cated bears to the aggregate population the 

7 States in which eligible entities receiving 

8 grants for that fiscal year are located. 

9 (B) MINIMUM AMOUNT OF GRANT.—A 

10 grant under the pilot program shall be in an 

11 amount not less than $50,000. 

12 (5) MATCHING REQUIREMENT.—As a condition 

13 of a grant under the pilot program, the Adminis14 trator shall require that a matching amount be pro15 vided from sources other than the Federal Govern16 ment that— 

17 (A) is equal to the amount of the grant, or 

18 in the case of an eligible entity that is a com19 munity college, historically Black college, His20 panic-serving institution, or other minority in21 stitution, is equal to 50 percent of the amount 

22 of the grant; 

23 (B) is not less than 50 percent cash; 

24 (C) is not more than 50 percent comprised 

25 of indirect costs and in-kind contributions; and 


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1 (D) does not include any indirect cost or 

2 in-kind contribution derived from any Federal 

3 program. 

4 (6) QUARTERLY REPORT TO ADMINISTRATOR.— 

5 (A) IN GENERAL.—Each eligible entity 

6 that receives a grant under the pilot program 

7 shall submit to the Administrator a quarterly 

8 report that includes— 

9 (i) a summary of the peer learning op10 portunities established by the eligible enti11 ty using grant funds; 

12 (ii) the number of second-stage small 

13 business concerns assisted using grant 

14 funds; and 

15 (iii) in the case of an eligible entity 

16 that receives a grant for a second fiscal 

17 year or any subsequent fiscal year— 

18 (I) any measurable economic im19 pact data resulting from the peer 

20 learning opportunities established 

21 using grant funds; and 

22 (II) the number of peer learning 

23 opportunities established by the eligi24 ble entity that have transitioned from 

25 operating using Government funds to 


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1 operating without using Government 

2 funds. 

3 (B) FORM OF REPORT.—Each report re4 quired under subparagraph (A) shall be trans5 mitted in electronic form. 

6 (7) DATA REPOSITORY AND CLEARINGHOUSE.— 

7 In carrying out the pilot program, the Administrator 

8 shall act as the repository of and clearinghouse for 

9 data and information submitted by the eligible enti10 ties. 

11 (8) ANNUAL REPORT ON PILOT PROGRAM.—Not 

12 later than November 1 of each year, the Adminis13 trator shall submit to the President and to Con14 gress, a report evaluating the success of the pilot 

15 program during the preceding fiscal year, which 

16 shall include the following: 

17 (A) A description of the types of peer 

18 learning opportunities provided with grant 

19 funds. 

20 (B) The number of second-stage small 

21 business concerns assisted with grant funds. 

22 (C) For fiscal year 2007 and each subse23 quent fiscal year of the pilot program— 


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1 (i) data regarding the economic im2 pact of the peer learning opportunities pro3 vided with grant funds; and 

4 (ii) the number of peer learning op5 portunities established by grant recipients 

6 that have transitioned from operating 

7 using Government funds to operating with8 out using Government funds. 

9 (9) PRIVACY REQUIREMENT.— 

10 (A) IN GENERAL.—A small business devel11 opment center, consortium of small business de12 velopment centers, or contractor or agent of a 

13 small business development center shall not dis14 close the name, address, or telephone number of 

15 any individual or small business concern receiv16 ing assistance under this section without the 

17 consent of such individual or small business 

18 concern, unless— 

19 (i) the Administrator is ordered to 

20 make such a disclosure by a court in any 

21 civil or criminal enforcement action initi22 ated by a Federal or State agency; or 

23 (ii) the Administrator considers such 

24 a disclosure to be necessary for the pur25 pose of conducting a financial audit of a 


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1 small business development center, but a 

2 disclosure under this clause shall be limited 

3 to the information necessary for such 

4 audit. 

5 (B) ADMINISTRATOR USE OF INFORMA6 TION.—The privacy requirement under this 

7 paragraph shall not— 

8 (i) restrict Administrator access to 

9 program activity data; or 

10 (ii) prevent the Administrator from 

11 using client information to conduct client 

12 surveys. 

13 (10) EVALUATION AND REPORT.—Not later 

14 than 2 years after the establishment of the pilot pro15 gram, the Comptroller General of the United States 

16 shall— 

17 (A) conduct an evaluation of the pilot pro18 gram; and 

19 (B) transmit to Congress and the Adminis20 trator a report containing the results of such 

21 evaluation along with any recommendations as 

22 to whether the pilot program, with or without 

23 modification, should be extended to include the 

24 participation of all small business development 

25 centers. 


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1 (11) TERMINATION.—The pilot program shall 

2 terminate on September 30, 2009. 

3 (d) REGULATIONS.—After providing notice and an 

4 opportunity for comment and after consulting with the as5 sociation described in subsection (c)(2)(E) (if any such as6 sociation has been formed), the Administrator shall pro7 mulgate final regulations to carry out this section, includ8 ing regulations that establish— 

9 (1) standards relating to the establishment and 

10 conduct of peer learning opportunities to be provided 

11 by grant recipients, including the number of individ12 uals that may participate in a peer group that is 

13 part of a peer learning opportunity; 

14 (2) standards relating to the educational, tech15 nical, and professional competency of any facilitator 

16 who delivers peer learning opportunities under the 

17 pilot program; and 

18 (3) requirements for transitioning peer learning 

19 opportunities funded under the pilot program to 

20 nongovernmental funding. 

21 (e) AUTHORIZATION OF APPROPRIATIONS.— 

22 (1) IN GENERAL.—There are authorized to be 

23 appropriated to carry out this section, $1,500,000 

24 for each of fiscal years 2007 through 2009. 


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1 (2) LIMITATION ON USE OF OTHER FUNDS.— 

2 The Administrator shall carry out this section using 

3 only amounts appropriated in advance specifically 

4 for the purpose of carrying out this section. 

5 SEC. 1904. PRIME REAUTHORIZATION AND TRANSFER TO 

6 THE SMALL BUSINESS ACT. 

7 (a) PROGRAM REAUTHORIZATION.—The Small Busi8 ness Act (15 U.S.C. 631 et seq.) is amended by inserting 

9 after section 39, as added by this Act, the following: 

10 ‘‘SEC. 40. PROGRAM FOR INVESTMENT IN MICROENTRE11 PRENEURS. 

12 ‘‘(a) DEFINITIONS.—In this section: 

13 ‘‘(1) CAPACITY BUILDING SERVICES.—The term 

14 ‘capacity building services’ means services provided 

15 to an organization that is, or that is in the process 

16 of becoming, a microenterprise development organi17 zation or program, for the purpose of enhancing its 

18 ability to provide training and services to disadvan19 taged entrepreneurs. 

20 ‘‘(2) COLLABORATIVE.—The term ‘collabo21 rative’ means 2 or more nonprofit entities that agree 

22 to act jointly as a qualified organization under this 

23 section. 


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1 ‘‘(3) DISADVANTAGED ENTREPRENEUR.—The 

2 term ‘disadvantaged entrepreneur’ means a micro3 entrepreneur that— 

4 ‘‘(A) is a low-income person; 

5 ‘‘(B) is a very low-income person; or 

6 ‘‘(C) lacks adequate access to capital or 

7 other resources essential for business success, 

8 or is economically disadvantaged, as determined 

9 by the Administrator. 

10 ‘‘(4) DISADVANTAGED NATIVE AMERICAN EN11 TREPRENEUR.—The term ‘disadvantaged Native 

12 American entrepreneur’ means a disadvantaged en13 trepreneur who is also a member of an Indian Tribe. 

14 ‘‘(5) INDIAN TRIBE.—The term ‘Indian tribe’ 

15 has the same meaning as in section 4(a) of the In16 dian Self-Determination and Education Assistance 

17 Act. 

18 ‘‘(6) INTERMEDIARY.—The term ‘intermediary’ 

19 means a private, nonprofit entity that seeks to serve 

20 microenterprise development organizations and pro21 grams, as authorized under subsection (d). 

22 ‘‘(7) LOW-INCOME PERSON.—The term ‘low-in23 come person’ means having an income, adjusted for 

24 family size, of not more than— 


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1 ‘‘(A) for metropolitan areas, 80 percent of 

2 the area median income; and 

3 ‘‘(B) for nonmetropolitan areas, the great4 er of— 

5 ‘‘(i) 80 percent of the area median in6 come; or 

7 ‘‘(ii) 80 percent of the statewide non8 metropolitan area median income. 

9 ‘‘(8) MICROENTREPRENEUR.—The term ‘micro10 entrepreneur’ means the owner or developer of a 

11 microenterprise. 

12 ‘‘(9) MICROENTERPRISE.—The term ‘micro13 enterprise’ means a sole proprietorship, partnership, 

14 or corporation that— 

15 ‘‘(A) has fewer than 5 employees; and 

16 ‘‘(B) generally lacks access to conventional 

17 loans, equity, or other banking services. 

18 ‘‘(10) MICROENTERPRISE DEVELOPMENT ORGA19 NIZATION OR PROGRAM.—The term ‘microenterprise 

20 development organization or program’ means a non21 profit entity, or a program administered by such an 

22 entity, including community development corpora23 tions or other nonprofit development organizations 

24 and social service organizations, that provides serv25 ices to disadvantaged entrepreneurs. 


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1 ‘‘(11) TRAINING AND TECHNICAL ASSIST2 ANCE.—The term ‘training and technical assistance’ 

3 means services and support provided to disadvan4 taged entrepreneurs, such as assistance for the pur5 pose of enhancing business planning, marketing, 

6 management, financial management skills, and as7 sistance for the purpose of accessing financial serv8 ices. 

9 ‘‘(12) VERY LOW-INCOME PERSON.—The term 

10 ‘very low-income person’ means having an income, 

11 adjusted for family size, of not more than 150 per12 cent of the poverty line (as defined in section 673(2) 

13 of the Community Services Block Grant Act (42 

14 U.S.C. 9902(2)), including any revision required by 

15 that section). 

16 ‘‘(b) ESTABLISHMENT OF PROGRAM.—The Adminis17 trator shall establish a microenterprise technical assist18 ance and capacity building grant program to provide as19 sistance from the Administration in the form of grants 

20 to qualified organizations in accordance with this section. 

21 ‘‘(c) USES OF ASSISTANCE.—A qualified organization 

22 shall use grants made under this section— 

23 ‘‘(1) to provide training and technical assist24 ance to disadvantaged entrepreneurs; 


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1 ‘‘(2) to provide training and capacity building 

2 services to microenterprise development organiza3 tions and programs and groups of such organiza4 tions to assist such organizations and programs in 

5 developing microenterprise training and services; 

6 ‘‘(3) to aid in researching and developing the 

7 best practices in the field of microenterprise and 

8 technical assistance programs for disadvantaged en9 trepreneurs; 

10 ‘‘(4) to provide training and technical assist11 ance to disadvantaged Native American entre12 preneurs and prospective entrepreneurs; and 

13 ‘‘(5) for such other activities as the Adminis14 trator determines are consistent with the purposes of 

15 this section. 

16 ‘‘(d) QUALIFIED ORGANIZATIONS.—For purposes of 

17 eligibility for assistance under this section, a qualified or18 ganization shall be— 

19 ‘‘(1) a nonprofit microenterprise development 

20 organization or program (or a group or collaborative 

21 thereof) that has a demonstrated record of delivering 

22 microenterprise services to disadvantaged entre23 preneurs; 

24 ‘‘(2) an intermediary; 


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1 ‘‘(3) a microenterprise development organiza2 tion or program that is accountable to a local com3 munity, working in conjunction with a State or local 

4 government or Indian tribe; or 

5 ‘‘(4) an Indian tribe acting on its own, if the 

6 Indian tribe can certify that no private organization 

7 or program referred to in this subsection exists with8 in its jurisdiction. 

9 ‘‘(e) ALLOCATION OF ASSISTANCE; SUBGRANTS.— 

10 ‘‘(1) ALLOCATION OF ASSISTANCE.— 

11 ‘‘(A) IN GENERAL.—The Administrator 

12 shall allocate assistance from the Administra13 tion under this section to ensure that— 

14 ‘‘(i) activities described in subsection 

15 (c)(1) are funded using not less than 75 

16 percent of amounts made available for 

17 such assistance; and 

18 ‘‘(ii) activities described in subsection 

19 (c)(2) are funded using not less than 15 

20 percent of amounts made available for 

21 such assistance. 

22 ‘‘(B) LIMIT ON INDIVIDUAL ASSISTANCE.— 

23 No single person may receive more than 10 per24 cent of the total funds appropriated under this 

25 section in a single fiscal year. 


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1 ‘‘(2) TARGETED ASSISTANCE.—The Adminis2 trator shall ensure that not less than 50 percent of 

3 the grants made under this section are used to ben4 efit very low-income persons, including those resid5 ing on Indian reservations. 

6 ‘‘(3) SUBGRANTS AUTHORIZED.— 

7 ‘‘(A) IN GENERAL.—A qualified organiza8 tion receiving assistance under this section may 

9 provide grants using that assistance to qualified 

10 small and emerging microenterprise organiza11 tions and programs, subject to such rules and 

12 regulations as the Administrator determines to 

13 be appropriate. 

14 ‘‘(B) LIMIT ON ADMINISTRATIVE EX15 PENSES.—Not more than 7.5 percent of assist16 ance received by a qualified organization under 

17 this section may be used for administrative ex18 penses in connection with the making of sub19 grants under subparagraph (A). 

20 ‘‘(4) DIVERSITY.—In making grants under this 

21 section, the Administrator shall ensure that grant 

22 recipients include both large and small microenter23 prise organizations, serving urban, rural, and Indian 

24 tribal communities serving diverse populations. 


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1 ‘‘(5) PROHIBITION ON PREFERENTIAL CONSID2 ERATION OF CERTAIN ADMINISTRATION PROGRAM

3 PARTICIPANTS.—In making grants under this sec4 tion, the Administrator shall ensure that any appli5 cation made by a qualified organization that is a 

6 participant in the program established under section 

7 7(m) does not receive preferential consideration over 

8 applications from other qualified organizations that 

9 are not participants in such program. 

10 ‘‘(f) MATCHING REQUIREMENTS.— 

11 ‘‘(1) IN GENERAL.—Financial assistance under 

12 this section shall be matched with funds from 

13 sources other than the Federal Government on the 

14 basis of not less than 50 percent of each dollar pro15 vided by the Administration. 

16 ‘‘(2) SOURCES OF MATCHING FUNDS.—Fees, 

17 grants, gifts, funds from loan sources, and in-kind 

18 resources of a grant recipient from public or private 

19 sources may be used to comply with the matching 

20 requirement in paragraph (1). 

21 ‘‘(3) EXCEPTION.— 

22 ‘‘(A) IN GENERAL.—In the case of an ap23 plicant for assistance under this section with se24 vere constraints on available sources of match25 ing funds, the Administrator may reduce or 


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1 eliminate the matching requirements of para2 graph (1). 

3 ‘‘(B) LIMITATION.—Not more than 10 per4 cent of the total funds made available from the 

5 Administration in any fiscal year to carry out 

6 this section may be excepted from the matching 

7 requirements of paragraph (1), as authorized by 

8 subparagraph (A) of this paragraph. 

9 ‘‘(g) APPLICATIONS FOR ASSISTANCE.—An applica10 tion for assistance under this section shall be submitted 

11 in such form and in accordance with such procedures as 

12 the Administrator shall establish. 

13 ‘‘(h) RECORDKEEPING AND REPORTING.— 

14 ‘‘(1) IN GENERAL.—Each organization that re15 ceives assistance from the Administration under this 

16 section shall— 

17 ‘‘(A) submit to the Administration not less 

18 than once in every 18-month period, financial 

19 statements audited by an independent certified 

20 public accountant; 

21 ‘‘(B) submit an annual report to the Ad22 ministration on its activities; and 

23 ‘‘(C) keep such records as may be nec24 essary to disclose the manner in which any as25 sistance under this section is used. 


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1 ‘‘(2) ACCESS.—The Administration shall have 

2 access upon request, for the purposes of determining 

3 compliance with this section, to any records of any 

4 organization that receives assistance from the Ad5 ministration under this section. 

6 ‘‘(3) DATA COLLECTION.—Each organization 

7 that receives assistance from the Administration 

8 under this section shall collect information relating 

9 to, as applicable— 

10 ‘‘(A) the number of individuals counseled 

11 or trained; 

12 ‘‘(B) the number of hours of counseling 

13 provided; 

14 ‘‘(C) the number of startup small business 

15 concerns formed; 

16 ‘‘(D) the number of small business con17 cerns expanded; 

18 ‘‘(E) the number of low-income individuals 

19 counseled or trained; and 

20 ‘‘(F) the number of very low-income indi21 viduals counseled or trained. 

22 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.— 

23 ‘‘(1) IN GENERAL.—There are authorized to be 

24 appropriated to the Administrator $15,000,000 for 

25 each of the fiscal years 2007 through 2009, to carry 


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1 out the provisions of this section, which shall remain 

2 available until expended. 

3 ‘‘(2) TRAINING FOR NATIVE AMERICAN ENTRE4 PRENEURS.—In addition to the amount authorized 

5 under paragraph (1), there are authorized to be ap6 propriated to the Administrator $2,000,000 for each 

7 of the fiscal years 2007 through 2009, to carry out 

8 the provisions of subsection (c)(4), which shall re9 main available until expended.’’. 

10 (b) CONFORMING REPEAL.—Subtitle C of title I of 

11 the Riegle Community Development and Regulatory Im12 provement Act of 1994 (15 U.S.C. 6901 note) is repealed. 

13 (c) REFERENCES.—All references in Federal law, 

14 other than subsection (d) of this section, to the ‘‘Program 

15 for Investment in Microentrepreneurs Act of 1999’’ or the 

16 ‘‘PRIME Act’’ shall be deemed to be references to section 

17 40 of the Small Business Act, as added by this section. 

18 (d) RULE OF CONSTRUCTION.—Nothing in this sec19 tion or the amendments made by this section shall affect 

20 any grant or assistance provided under the Program for 

21 Investment in Microentrepreneurs Act of 1999, before the 

22 date of enactment of this Act, and any such grant or as23 sistance shall be subject to the Program for Investment 

24 in Microentrepreneurs Act of 1999, as in effect on the day 

25 before the date of enactment of this Act. 


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1 SEC. 1905. CHILD CARE LENDING PILOT PROGRAM. 

2 (a) CHILD CARE LENDING PILOT PROGRAM.—Sec3 tion 502 of the Small Business Investment Act of 1958 

4 (15 U.S.C. 696), as amended by this Act, is amended— 

5 (1) in the matter preceding paragraph (1)— 

6 (A) by striking ‘‘The Administration’’ and 

7 inserting the following: 

8 ‘‘(a) AUTHORIZATION.—The Administration’’; 

9 (B) by striking ‘‘and such loans’’ and in10 serting ‘‘. Such loans’’; 

11 (C) by striking ‘‘: Provided, however, That 

12 the foregoing powers shall be subject to the fol13 lowing restrictions and limitations:’’ and insert14 ing a period; and 

15 (D) by adding at the end the following: 

16 ‘‘(b) RESTRICTIONS AND LIMITATIONS.—The author17 ity under subsection (a) shall be subject to the following 

18 restrictions and limitations:’’; and 

19 (2) in subsection (b)(1), as so redesignated— 

20 (A) by inserting after ‘‘USE OF PRO21 CEEDS.—’’ the following: 

22 ‘‘(A) IN GENERAL.—’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(B) LOANS TO SMALL, NONPROFIT CHILD

25 CARE BUSINESSES.— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 subsection (a), the proceeds of any loan de3 scribed in subsection (a) may be used by 

4 the certified development company to as5 sist a small, nonprofit child care business, 

6 if— 

7 ‘‘(I) the loan is used for a sound 

8 business purpose that has been ap9 proved by the Administration; 

10 ‘‘(II) each such business meets 

11 all of the same eligibility requirements 

12 applicable to for-profit businesses 

13 under this title, except for status as a 

14 for-profit business; 

15 ‘‘(III) 1 or more individuals has 

16 personally guaranteed the loan; 

17 ‘‘(IV) each such business has 

18 clear and singular title to the collat19 eral for the loan; and 

20 ‘‘(V) each such business has suf21 ficient cash flow from its operations to 

22 meet its obligations on the loan and 

23 its normal and reasonable operating 

24 expenses. 


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1 ‘‘(ii) LIMITATION ON VOLUME.—Not 

2 more than 7 percent of the total number of 

3 loans guaranteed in any fiscal year under 

4 this title may be awarded under this sub5 paragraph. 

6 ‘‘(iii) DEFINED TERM.—For purposes 

7 of this subparagraph, the term ‘small, non8 profit child care business’ means an estab9 lishment that— 

10 ‘‘(I) is organized in accordance 

11 with section 501(c)(3) of the Internal 

12 Revenue Code of 1986; 

13 ‘‘(II) is primarily engaged in pro14 viding child care for infants, toddlers, 

15 pre-school, or pre-kindergarten chil16 dren (or any combination thereof), 

17 and may provide care for older chil18 dren when they are not in school, and 

19 may offer pre-kindergarten edu20 cational programs; 

21 ‘‘(III) including its affiliates, has 

22 tangible net worth that does not ex23 ceed $7,000,000, and has average net 

24 income (excluding any carryover 

25 losses) for the 2 completed fiscal years 


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1 preceding the date of the application 

2 for assistance under this subpara3 graph that does not exceed 

4 $2,500,000; and 

5 ‘‘(IV) is licensed as a child care 

6 provider by the State, insular area, or 

7 the District of Columbia, in which it 

8 is located. 

9 ‘‘(iv) SUNSET PROVISION.—This sub10 paragraph shall cease to have effect on 

11 September 30, 2009, and shall apply to all 

12 loans authorized under this subparagraph 

13 that are applied for, approved, or dis14 bursed during the period beginning on the 

15 date of enactment of this subparagraph 

16 and ending on September 30, 2009.’’. 

17 (b) REPORTS.— 

18 (1) SMALL BUSINESS ADMINISTRATION.— 

19 (A) IN GENERAL.—Not later than 6 

20 months after the date of enactment of this Act, 

21 and every 6 months thereafter until September 

22 30, 2009, the Administrator shall submit a re23 port on the implementation of the program 

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1 ness Investment Act of 1958, as added by this 

2 Act, to— 

3 (i) the Committee on Small Business 

4 and Entrepreneurship of the Senate; and 

5 (ii) the Committee on Small Business 

6 of the House of Representatives. 

7 (B) CONTENTS.—Each report under sub8 paragraph (A) shall contain— 

9 (i) the date on which the program is 

10 implemented; 

11 (ii) the date on which the rules are 

12 issued under subsection (c); and 

13 (iii) the number and dollar amount of 

14 loans under the program applied for, ap15 proved, and disbursed during the previous 

16 6 months— 

17 (I) with respect to nonprofit child 

18 care businesses; and 

19 (II) with respect to for-profit 

20 child care businesses. 

21 (2) GOVERNMENT ACCOUNTABILITY OFFICE.— 

22 (A) IN GENERAL.—Not later than March 

23 31, 2009, the Comptroller General of the 

24 United States shall submit a report on the child 

25 care small business loans authorized by section 


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1 502(b)(1)(B) of the Small Business Investment 

2 Act of 1958, as added by this Act, to— 

3 (i) the Committee on Small Business 

4 and Entrepreneurship of the Senate; and 

5 (ii) the Committee on Small Business 

6 of the House of Representatives. 

7 (B) CONTENTS.—The report under sub8 paragraph (A) shall contain information gath9 ered during the first 2 years of the loan pro10 gram, including— 

11 (i) an evaluation of the timeliness of 

12 the implementation of the loan program; 

13 (ii) a description of the effectiveness 

14 and ease with which certified development 

15 companies, lenders, and small business 

16 concerns have participated in the loan pro17 gram; 

18 (iii) a description and assessment of 

19 how the loan program was marketed; 

20 (iv) by location (State, insular area, 

21 and the District of Columbia) and in total, 

22 the number of child care small businesses, 

23 categorized by status as a for-profit or 

24 nonprofit business, that— 


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1 (I) applied for a loan under the 

2 program (and whether it was a new or 

3 expanding child care provider); 

4 (II) were approved for a loan 

5 under the program; and 

6 (III) received a loan disburse7 ment under the program (and whether 

8 they are a new or expanding child 

9 care provider); and 

10 (v) with respect to businesses de11 scribed under clause (iv)(III)— 

12 (I) the number of such busi13 nesses in each State, insular area, and 

14 the District of Columbia, as of the 

15 year of enactment of this Act; 

16 (II) the total amount loaned to 

17 such businesses under the program; 

18 (III) the total number of loans to 

19 such businesses under the program; 

20 (IV) the average loan amount 

21 and term; 

22 (V) the currency rate, delin23 quencies, defaults, and losses of the 

24 loans; 


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1 (VI) the number and percent of 

2 children served who receive subsidized 

3 assistance; and 

4 (VII) the number and percent of 

5 children served who are low income. 

6 (C) ACCESS TO INFORMATION.— 

7 (i) IN GENERAL.—The Administration 

8 shall collect and maintain such information 

9 as may be necessary to carry out this para10 graph from certified development centers 

11 and child care providers, and such centers 

12 and providers shall comply with a request 

13 for information from the Administration 

14 for that purpose. 

15 (ii) PROVISION OF INFORMATION TO

16 GOVERNMENT ACCOUNTABILITY OFFICE.— 

17 The Administration shall provide informa18 tion collected under this subparagraph to 

19 the Comptroller General of the United 

20 States for purposes of the report required 

21 by this paragraph. 

22 (c) RULEMAKING AUTHORITY.—Not later than 120 

23 days after the date of enactment of this Act, the Adminis24 trator shall issue final rules to carry out the loan program 


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1 authorized by section 502(b)(1)(B) of the Small Business 

2 Investment Act of 1958, as added by this Act. 

3 SEC. 1906. STUDY ON THE IMPACT OF THE LOW DOCU4 MENTATION LOAN PROGRAM. 

5 (a) DEFINITION.—In this section, the term ‘‘rural 

6 area’’ has the same meaning as in section 7(m) of the 

7 Small Business Act (15 U.S.C. 636(m)). 

8 (b) STUDY.—Not later than 3 months after the date 

9 of enactment of this Act, the Administrator shall under10 take a study on the effect of eliminating the low docu11 mentation loan program under section 7(a)(25)(C) of the 

12 Small Business Act (15 U.S.C. 636(a)(25)(C)), includ13 ing— 

14 (1) the effectiveness of the low documentation 

15 loan program in rural areas; 

16 (2) the effect that the elimination of the low 

17 documentation loan program would have on lending 

18 in rural areas; and 

19 (3) the overall accessibility and effectiveness of 

20 lending in rural areas. 

21 (c) REPORT TO CONGRESS.—Not later than 1 year 

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

23 shall submit to the Committee on Small Business and En24 trepreneurship of the Senate and the Committee on Small 


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1 Business of the House of Representatives a report con2 taining— 

3 (1) the results of the study conducted under 

4 subsection (b); and 

5 (2) recommendations, if any, to improve the ac6 cessibility and effectiveness of lending in rural areas. 

7 SEC. 1907. ENFORCEMENT OMBUDSMAN. 

8 Section 30(b)(2) of the Small Business Act (15 

9 U.S.C. 657(b)(2)) is amended— 

10 (1) by redesignating subparagraphs (C) through 

11 (E) as subparagraphs (D) through (F), respectively; 

12 (2) by inserting after subparagraph (B) the fol13 lowing: 

14 ‘‘(C) assist small business concerns with 

15 bringing cases or complaints (whether formal or 

16 informal) before Federal regulatory boards and 

17 agencies, including the Surface Transportation 

18 Board, Environmental Protection Agency, Oc19 cupational Health and Safety Administration, 

20 Federal Communications Commission, and 

21 Food and Drug Administration;’’; and 

22 (3) in subparagraph (F), as redesignated by 

23 this section, by striking ‘‘subparagraph (C)’’ and in24 serting ‘‘subparagraph (D)’’. 


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1 SEC. 1908. MINORITY ENTREPRENEURSHIP AND INNOVA2 TION PILOT PROGRAM. 

3 (a) DEFINITIONS.—In this section— 

4 (1) the term ‘‘Hispanic serving institution’’ has 

5 the meaning given the term in section 502 of the 

6 Higher Education Act of 1965 (20 U.S.C. 1101a); 

7 (2) the term ‘‘historically Black college and uni8 versity’’ has the meaning given the term ‘‘part B in9 stitution’’ in section 322 of the Higher Education 

10 Act of 1965 (20 U.S.C. 1061); 

11 (3) the term ‘‘small business development cen12 ter’’ has the same meaning as in section 21 of the 

13 Small Business Act (15 U.S.C. 648); and 

14 (4) the term ‘‘Tribal College’’ has the meaning 

15 given the term ‘‘tribally controlled college or univer16 sity’’ in section 2 of the Tribally Controlled College 

17 or University Assistance Act of 1978 (25 U.S.C. 

18 1801). 

19 (b) MINORITY ENTREPRENEURSHIP AND INNOVA20 TION GRANTS.— 

21 (1) IN GENERAL.—The Administrator shall 

22 make grants to historically Black colleges and uni23 versities, Tribal Colleges, and Hispanic serving insti24 tutions, or to any entity formed by a combination of 

25 such institutions— 


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1 (A) to assist in establishing an entrepre2 neurship curriculum for undergraduate or grad3 uate studies; and 

4 (B) for placement of small business devel5 opment centers on the physical campus of the 

6 institution. 

7 (2) CURRICULUM REQUIREMENT.—An institu8 tion of higher education receiving a grant under this 

9 subsection shall develop a curriculum that includes 

10 training in various skill sets needed by successful en11 trepreneurs, including— 

12 (A) business management and marketing, 

13 financial management and accounting, market 

14 analysis and competitive analysis, innovation 

15 and strategic planning; and 

16 (B) additional entrepreneurial skill sets 

17 specific to the needs of the student population 

18 and the surrounding community, as determined 

19 by the institution. 

20 (3) SMALL BUSINESS DEVELOPMENT CENTER

21 REQUIREMENT.—Each institution receiving a grant 

22 under this subsection shall open a small business de23 velopment center that— 


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1 (A) performs studies, research, and coun2 seling concerning the management, financing, 

3 and operation of small business concerns; 

4 (B) performs management training and 

5 technical assistance regarding the participation 

6 of small business concerns in international mar7 kets, export promotion and technology transfer, 

8 and the delivery or distribution of such services 

9 and information; 

10 (C) offers referral services for entre11 preneurs and small business concerns to busi12 ness development, financing, and legal experts; 

13 and 

14 (D) promotes market-specific innovation, 

15 niche marketing, capacity building, inter16 national trade, and strategic planning as keys 

17 to long-term growth for its small business con18 cern and entrepreneur clients. 

19 (4) GRANT LIMITATIONS.—A grant under this 

20 subsection— 

21 (A) may not exceed $500,000 for any fis22 cal year for any 1 institution of higher edu23 cation; 

24 (B) may not be used for any purpose other 

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1 curred to develop and implement a curriculum 

2 that fosters entrepreneurship and the costs in3 curred to organize and run a small business de4 velopment center on the grounds of the institu5 tion; and 

6 (C) may not be used for building expenses, 

7 administrative travel budgets, or other expenses 

8 not directly related to the implementation of the 

9 curriculum or activities authorized by this sec10 tion. 

11 (5) EXCEPTION FROM SMALL BUSINESS ACT

12 REQUIREMENT.—Subparagraphs (A) and (B) of sec13 tion 21(a)(4) of the Small Business Act (15 U.S.C. 

14 648(a)(4)) do not apply to assistance made available 

15 under this subsection. 

16 (6) REPORT.—Not later than November 1 of 

17 each year, the Associate Administrator of Entrepre18 neurial Development of the Administration shall sub19 mit to the Committee on Small Business and Entre20 preneurship of the Senate and the Committee on 

21 Small Business of the House of Representatives, a 

22 report evaluating the award and use of grants under 

23 this subsection during the preceding fiscal year, 

24 which shall include— 


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1 (A) a description of each entrepreneurship 

2 program developed with grant funds, the date 

3 of the award of such grant, and the number of 

4 participants in each such program; 

5 (B) the number of small business concerns 

6 assisted by each small business development 

7 center established with a grant under this sub8 section; and 

9 (C) data regarding the economic impact of 

10 the small business development center coun11 seling provided under a grant under this sub12 section. 

13 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

14 authorized to be appropriated to carry out this section 

15 $10,000,000, to remain available until expended, for each 

16 of fiscal years 2007 and 2008. 

17 (d) LIMITATION ON USE OF OTHER FUNDS.—The 

18 Administrator shall carry out this section only with 

19 amounts appropriated in advance specifically to carry out 

20 this section. 

21 SEC. 1909. OFFICE OF NATIVE AMERICAN AFFAIRS PILOT 

22 PROGRAM. 

23 (a) DEFINITION.—In this section, the term ‘‘Indian 

24 tribe’’ means any band, nation, or organized group or 

25 community of Indians located in the contiguous United 


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1 States, and the Metlakatla Indian Community, whose 

2 members are recognized as eligible for the services pro3 vided to Indians by the Secretary of the Interior because 

4 of their status as Indians. 

5 (b) AUTHORIZATION.—The Office of Native Amer6 ican Affairs of the Administration may conduct a pilot 

7 program— 

8 (1) to develop and publish a self-assessment 

9 tool for Indian tribes that will allow such tribes to 

10 evaluate and implement best practices for economic 

11 development; and 

12 (2) to provide assistance to Indian tribes, 

13 through the Inter-Agency Working Group, in identi14 fying and implementing economic development op15 portunities available from the Federal Government 

16 and private enterprise, including— 

17 (A) the Administration; 

18 (B) the Department of Energy; 

19 (C) the Environmental Protection Agency; 

20 (D) the Department of Commerce; 

21 (E) the Federal Communications Commis22 sion; 

23 (F) the Department of Justice; 

24 (G) the Department of Labor; 


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1 (H) the Office of National Drug Control 

2 Policy; and 

3 (I) the Department of Agriculture. 

4 (c) TERMINATION OF PROGRAM.—The authority to 

5 conduct a pilot program under this section shall terminate 

6 on September 30, 2008. 

7 (d) REPORT.—Not later than September 30, 2008, 

8 the Office of Native American Affairs shall submit a re9 port to the Committee on Small Business and Entrepre10 neurship of the Senate and the Committee on Small Busi11 ness of the House of Representatives regarding the effec12 tiveness of the self-assessment tool developed under sub13 section (b)(1). 

14 SEC. 1910. INSTITUTIONS OF HIGHER EDUCATION. 

15 (a) IN GENERAL.—Section 21(a)(1) of the Small 

16 Business Act (15 U.S.C. 648(a)(1)) is amended by strik17 ing ‘‘: Provided, That’’ and all that follows through ‘‘on 

18 such date.’’ and inserting the following: ‘‘On and after De19 cember 31, 2006, the Administration may only make a 

20 grant under this paragraph to an applicant that is an in21 stitution of higher education, as defined in section 101(a) 

22 of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) 

23 that is accredited (and not merely in preaccreditation sta24 tus) by a nationally recognized accrediting agency or asso25 ciation, recognized by the Secretary of Education for such 


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1 purpose in accordance with section 496 of that Act (20 

2 U.S.C. 1099b), or to a women’s business center operating 

3 pursuant to section 29 as a small business development 

4 center, unless the applicant was receiving a grant (includ5 ing a contract or cooperative agreement) on December 31, 

6 2006.’’. 

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

8 subsection (a) shall become effective on December 31, 

9 2006. 


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Calendar No. 577 

109TH CONGRESS 

2D SESSION S. 3778 

A BILL 

To reauthorize and improve the Small Business Act 

and for other purposes. and the Small Business Investment Act of 1958, 

AUGUST 2, 2006 

Read twice and placed on the calendar 


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