I

103D CONGRESS

1ST SESSION H. R. 2192

To amend the FREEDOM Support Act to establish a program to provide

loans for joint ventures between United States small businesses and

small businesses or entrepreneurs in the independent states of the former

Soviet Union.

IN THE HOUSE OF REPRESENTATIVES

MAY 19, 1993

Mr. TRAFICANT introduced the following bill; which was referred jointly to the

Committees on Foreign Affairs, Ways and Means, and Banking, Finance

and Urban Affairs

A BILL

To amend the FREEDOM Support Act to establish a program to provide loans for joint ventures between United

States small businesses and small businesses or entrepreneurs in the independent states of the former Soviet

Union.

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

3 SECTION 1. SMALL BUSINESS JOINT VENTURE LOAN PRO4 GRAM FOR THE FORMER SOVIET UNION.

5 (a) ESTABLISHMENT OF PROGRAM.—The Freedom

6 for Russia and Emerging Eurasian Democracies and Open
2

•HR 2192 IH

1 Markets Support Act of 1992 is amended by adding at

2 the end the following new title:

3 ‘‘TITLE XI—SMALL BUSINESS

4 JOINT VENTURE LOAN PRO5 GRAM

6 ‘‘SEC. 1101. PURPOSE.

7 ‘‘It is the purpose of this title to assist United States

8 small businesses expand into markets in the independent

9 states of the former Soviet Union, thereby developing

10 those markets to the benefit of United States small busi11 nesses and the United States economy.

12 ‘‘SEC. 1102. ESTABLISHMENT OF SMALL BUSINESS JOINT

13 VENTURE PROGRAM.

14 ‘‘(a) IN GENERAL.—The Secretary of State shall

15 carry out a program in accordance with this title to sup16 port the establishment by United States small businesses

17 and Independent States small businesses or entrepreneurs

18 of joint ventures to engage in business activity in the inde19 pendent states of the former Soviet Union.

20 ‘‘(b) EXAMPLES OF BUSINESS AREAS.—Joint ven21 tures supported under this title may include joint ventures

22 in areas such as manufacturing, telecommunications, en23 ergy production, environmental protection, agriculture,

24 housing, aviation, and defense conversion.
3

•HR 2192 IH

1 ‘‘SEC. 1103. LOANS TO JOINT VENTURES.

2 ‘‘(a) AUTHORIZATION.—The Secretary is authorized

3 to make loans in accordance with this section for joint ven4 tures described in section 1102(a).

5 ‘‘(b) CRITERIA.—The Secretary shall use the follow6 ing criteria in determining which joint ventures receive a

7 loan under this section:

8 ‘‘(1) Preference shall be given to joint ventures

9 involving United States small businesses located in

10 economically depressed communities.

11 ‘‘(2) Preference shall be given to loans that will

12 be most cost-effective.

13 ‘‘(3) Preference shall be given to joint ventures

14 that have the greatest likelihood of success. A loan

15 may not be made to a joint venture if the Secretary

16 determines that the joint venture is unlikely to be

17 successful.

18 ‘‘(4) Preference shall be given to joint ventures

19 that are most likely to benefit the participating

20 United States small businesses and the United

21 States economy.

22 ‘‘(5) Preference shall be given to joint ventures

23 in which—

24 ‘‘(A) the participating United States small

25 business will provide the management, account-
4

•HR 2192 IH

1 ing, marketing, training, and other business ex2 pertise needed by the joint venture; and

3 ‘‘(B) the participating Independent States

4 small business or entrepreneur will provide en5 trepreneurship, the understanding of local

6 needs and conditions, and the local resources

7 needed by the joint venture.

8 ‘‘(6) Preference shall be given to joint ventures

9 that will produce goods that are to be used, or serv10 ices that are to be provided, within the independent

11 states of the former Soviet Union.

12 ‘‘(c) LIMITATIONS ON AMOUNT OF LOAN.—A loan

13 under this section may not exceed $100,000. Not more

14 than one loan may be made for any single joint venture.

15 ‘‘(d) TERM AND REPAYMENT OF LOANS.—The fol16 lowing shall apply with respect to any loan under this sec17 tion:

18 ‘‘(1) The Secretary shall determine the term of

19 the loan.

20 ‘‘(2) Payments of principal shall not be re21 quired during the 1st 3 years of the loan.

22 ‘‘(3) Interest shall not accrue during the 1st 5

23 years of the loan. Thereafter, the rate of interest

24 shall be based on the average of the Consumer Price

25 Index (all items—United States city average), pub-
5

•HR 2192 IH

1 lished monthly by the Bureau of Labor Statistics in

2 the Department of Labor, for such period prior to

3 the due date for each interest payment as the Sec4 retary may determine.

5 ‘‘(e) PROHIBITION ON TRANSFER OF JOBS FROM

6 THE UNITED STATES.—A loan may not be made to a joint

7 venture under this section if, as a result of that joint ven8 ture, the United States small business participating in the

9 joint venture would transfer any business operation or ac10 tivity that it has been carrying out in the United States

11 to any location outside the United States.

12 ‘‘(f) PROHIBITION ON IMPORTS TO THE UNITED

13 STATES.—

14 ‘‘(1) IN GENERAL.—Goods produced pursuant

15 to any joint venture that receives a loan under this

16 section may not be imported into the United States,

17 including as parts or components of other goods.

18 ‘‘(2) ENFORCEMENT.—The Secretary and the

19 Secretary of the Treasury shall take appropriate

20 steps to implement and enforce paragraph (1). Such

21 steps shall include a requirement that any joint ven22 ture that receives a loan under this section and pro23 duces any goods for export submit to the Secretary

24 such information as the Secretary may require re25 garding the foreign recipient of any such goods that
6

•HR 2192 IH

1 are to be exported, the identifying characteristics of

2 such goods, and the amount of goods to be exported.

3 The Secretary shall provide such lists to the Com4 missioner of Customs.

5 ‘‘SEC. 1104. OTHER ACTIVITIES TO FACILITATE THE ESTAB6 LISHMENT OF JOINT VENTURES.

7 ‘‘(a) DATABASE CONTRACTOR.—

8 ‘‘(1) IN GENERAL.—In order to facilitate the

9 establishment of joint ventures that would be eligible

10 to receive a loan under section 1103(a), the Sec11 retary shall enter into a contract with an eligible pri12 vate business entity (hereinafter in this section re13 ferred to as the ‘contractor’) for the development

14 and maintanence by the contractor of the database

15 described in subsection (b).

16 ‘‘(2) SELECTION OF CONTRACTOR.—The Sec17 retary shall use competitive procedures in selecting

18 the contractor and shall award the contract required

19 by paragraph (1) within 60 days after the date of

20 enactment of this section.

21 ‘‘(3) LIMITATION ON CONTRACT AMOUNT;

22 BUDGET ACT REQUIREMENTS.—(A) Subject to sub23 paragraphs (B) and (C), the Secretary shall deter24 mine the amount of the contract awarded pursuant

25 to this subsection.
7

•HR 2192 IH

1 ‘‘(B) The contract awarded pursuant to this

2 subsection may not require the United States Gov3 ernment to make payments to the contractor that in

4 the aggregate exceed $3,000,000 for any fiscal year.

5 ‘‘(C) The United States Government shall be

6 obligated to make outlays under the contract re7 quired by this subsection only to the extent that the

8 budget authority for such outlays is provided in ad9 vance by appropriation Acts.

10 ‘‘(b) DATABASE.—The database provided for in sub11 section (a) shall list—

12 ‘‘(1) United States small businesses that are in13 terested in participating in a joint venture that

14 would be eligible to receive a loan under section

15 1103(a); and

16 ‘‘(2) Independent States small businesses or en17 trepreneurs that have submitted a proposal for the

18 establishment of a joint venture that would be eligi19 ble to receive a loan under section 1103(a).

20 The database shall include information regarding the

21 types of business activity in which each such business is

22 involved.

23 ‘‘(c) SUBMISSION AND DISTRIBUTION OF PROPOSALS

24 FOR JOINT VENTURES.—
8

•HR 2192 IH

1 ‘‘(1) SUBMISSION TO THE SECRETARY.—The

2 Secretary shall accept proposals for joint ventures

3 submitted by Independent States small businesses or

4 entrepreneurs and shall forward them to the con5 tractor.

6 ‘‘(2) DISTRIBUTION BY THE CONTRACTOR.—

7 The contractor shall provide information about each

8 such proposal to United States small businesses list9 ed in the database established pursuant to sub10 section (a) that would be qualified to participate in

11 the proposed joint venture.

12 ‘‘(d) REVIEW OF PROPOSED JOINT VENTURES BY

13 THE CONTRACTOR.—Each application for a loan under

14 section 1103(a) shall be submitted to the contractor. The

15 contractor—

16 ‘‘(1) shall determine whether the Independent

17 States small business or entrepreneur that would be

18 participating in the proposed joint venture has the

19 resources it claims it will contribute to the joint ven20 ture; and

21 ‘‘(2) shall make a recommendation to the Sec22 retary with respect to whether a loan should be

23 made for the proposed joint venture based on the

24 criteria set forth in section 1103(b).

25 ‘‘(e) PUBLICIZING PROGRAM.—
9

•HR 2192 IH

1 ‘‘(1) UNITED STATES SMALL BUSINESSES.—

2 The Secretary shall take appropriate steps to make

3 United States small businesses aware of the

4 database established pursuant to subsection (a) and

5 the loan program established pursuant to section

6 1103. Such steps shall include publication of infor7 mation about the database and the program in the

8 Federal Register.

9 ‘‘(2) INDEPENDENT STATES SMALL BUSINESSES

10 OR ENTREPRENEURS.—The Secretary shall also take

11 appropriate steps to make Independent States small

12 businesses or entrepreneurs aware of the database

13 and the loan program.

14 ‘‘SEC. 1105. AUTHORIZATION OF APPROPRIATIONS.

15 ‘‘(a) LOAN PROGRAM.—There are authorized to be

16 appropriated $100,000,000 to carry out section 1103, in17 cluding for the cost (as defined in section 502 of the Fed18 eral Credit Reform Act of 1990) of loans.

19 ‘‘(b) DATABASE COSTS.—There are authorized to be

20 appropriated $3,000,000 for each fiscal year for payments

21 pursuant to the contract provided for in section 1104(a).

22 ‘‘SEC. 1106. DEFINITIONS.

23 ‘‘(a) ECONOMICALLY DEPRESSED COMMUNITY.—For

24 purposes of this title, the term ‘economically depressed

25 community’ means a rural or urban community which, rel-
10

•HR 2192 IH

1 ative to other communities in the United States, is de2 pressed in terms of age of housing, the extent of poverty,

3 the growth rate of per capita income, the extent of unem4 ployment, job lag, or the extent of surplus labor.

5 ‘‘(b) ELIGIBLE PRIVATE BUSINESS ENTITY.—For

6 purposes of this title, the term ‘eligible private business

7 entity’ means a United States small business that—

8 ‘‘(1) has experience in business activity in at

9 least one independent state of the former Soviet

10 Union; and

11 ‘‘(2) has its main business office within the

12 metropolitian Washington, D.C., area.

13 ‘‘(c) INDEPENDENT STATES SMALL BUSINESS OR

14 ENTREPRENEUR.—For purposes of this title, the term

15 ‘Independent States small business or entrepreneur’

16 means—

17 ‘‘(1) a small business that is organized under

18 the laws of an independent state of the former So19 viet Union and that is more than 50 percent owned

20 by citizens of the independent states (as determined

21 under regulations of the Secretary); or

22 ‘‘(2) an entrepreneur who is a citizen of an

23 independent state and is a resident of an independ24 ent state.
11

•HR 2192 IH

1 ‘‘(d) SECRETARY.—For purposes of this title, the

2 term ‘Secretary’ means the Secretary of State.

3 ‘‘(e) SMALL BUSINESS.—For purposes of this title,

4 the term ‘small business’—

5 ‘‘(1) in the case of United States small busi6 nesses, means an organization that is a small busi7 ness concern for purposes of the Small Business Act;

8 and

9 ‘‘(2) in the case of Independent States small

10 businesses, means an organization that is deter11 mined to be a small business by the Secretary using

12 criteria comparable to those used for identifying

13 small business concerns for purposes of the Small

14 Business Act.

15 ‘‘(f) UNITED STATES SMALL BUSINESS.—For pur16 poses of this title, the term ‘United States small business’

17 means a small business—

18 ‘‘(1) that is organized under the laws of the

19 United States (including any State, the District of

20 Columbia, the Commonwealth of Puerto Rico, the

21 Commonwealth of the Northern Mariana Islands,

22 American Samoa, Guam, the Virgin Islands, or any

23 other territory or possession of the United States);

24 and
12

•HR 2192 IH

1 ‘‘(2) that is more than 50 percent owned by

2 United States citizens (as determined under regula3 tions of the Secretary).’’.

4 (b) CONFORMING AMENDMENT.—The table of con5 tents in section 2 of the Freedom for Russia and Emerg6 ing Eurasian Democracies and Open Markets Support Act

7 of 1992 is amended by adding at the end the following:

‘‘TITLE XI—SMALL BUSINESS JOINT VENTURE LOAN PROGRAM

‘‘Sec. 1101. Purpose.

‘‘Sec. 1102. Establishment of small business joint venture program.

‘‘Sec. 1103. Loans to joint ventures.

‘‘Sec. 1104. Other activities to facilitate the establishment of joint ventures.

‘‘Sec. 1105. Authorization of appropriations.

‘‘Sec. 1106. Definitions.’’.

Æ