238
‘‘(B) WAIVER.—The Administrator may, on 
a nondelegable basis, waive the requirements of 
subparagraph (A) only if one of the following 
conditions exist: 
‘‘(i) When it is necessary for the own-
ers of the concern to surrender partial con-
trol of such concern on a temporary basis in 
order to obtain equity financing. 
‘‘(ii) The head of the contracting agen-
cy for which the contract is being performed 
certifies that termination of the contract 
would severely impair attainment of the 
agency’s program objectives or missions. 
‘‘(iii) Ownership and control of the 
concern that is performing the contract will 
pass to another small business concern that 
is a program participant, but only if the 
acquiring firm would otherwise be eligible 
to receive the award pursuant to this sub-
section. 
‘‘(iv) The individuals upon whom eli-
gibility was based are no longer able to ex-
ercise control of the concern due to inca-
pacity or death.
239
‘‘(v) When, in order to raise equity 
capital, it is necessary for the disadvan-
taged owners of the concern to relinquish 
ownership of a majority of the voting stock 
of such concern, but only if—
‘‘(I) such concern has exited the 
program established under this sub-
section; 
‘‘(II) the disadvantaged owners 
will maintain ownership of the largest 
single outstanding block of voting stock 
(including stock held by affiliated par-
ties); and 
‘‘(III) the disadvantaged owners 
will maintain control of daily business 
operations. 
‘‘(C) TIMING
OF
WAIVER
REQUEST.—The 
Administrator may waive the requirements of 
subparagraph (A) if—
‘‘(i) in the case of subparagraphs 
(B)(i), (ii), and (iii), he is requested to do 
so prior to the actual relinquishment of 
ownership or control; and 
‘‘(ii) in the case of subparagraph 
(B)(iv), he is requested to do so as soon as
240
possible after the incapacity or death oc-
curs. 
‘‘(D) NOTIFICATION TO ADMINISTRATOR.—
Concerns performing contracts awarded pursu-
ant to this subsection shall be required to notify 
the Administration immediately upon entering 
an agreement (either oral or in writing) to 
transfer all or part of its stock or other owner-
ship interest to any other party. 
‘‘(E) TREATMENT OF SMALL BUSINESS IN-
VESTMENT
COMPANY
INTEREST.—Notwith-
standing any other provision of law, for the pur-
poses of determining ownership and control of a 
concern under this section, any potential owner-
ship interests held by investment companies li-
censed under the Small Business Investment Act 
of 1958 shall be treated in the same manner as 
interests held by the individuals upon whom eli-
gibility is based. 
‘‘(21) CONDITIONS OF PARTICIPATION.—
‘‘(A) DURATION.—A program participant 
shall be permitted to continue participation in 
such program for a period of time which is 9 
years. Nothing contained in this subparagraph 
shall be deemed to prevent the Administrator
241
from instituting a termination or graduation 
pursuant to subparagraph (F) or (H) for issues 
unrelated to the expiration of any time period 
limitation. 
‘‘(B) BUSINESS
PLAN
SUBMISSION.—(i) 
Promptly after certification as a participant in 
the program established by this section, a pro-
gram participant shall submit a business plan 
(hereinafter referred to as the ‘plan’) as described 
in clause (ii) of this subparagraph for review by 
the Business Opportunity Specialist assigned to 
assist such program participant. 
‘‘(ii) The plan may be a revision of a pre-
liminary business plan submitted by the pro-
gram participant or required by the Adminis-
trator as a part of the application for certifi-
cation under this subsection and shall be de-
signed to result in the program participant 
eliminating the conditions or circumstances 
upon which the Administrator determined eligi-
bility pursuant to paragraph (7) of this section. 
‘‘(iii) Such plan, and subsequent modifica-
tions submitted under clause (v), shall be ap-
proved by the Business Opportunity Specialist 
prior to the program participant being eligible
242
for award of a contract pursuant to this sub-
section. 
‘‘(iv) The plans submitted under this sub-
paragraph shall include the following: 
‘‘(I) An analysis of market potential, 
competitive environment, and other business 
analyses estimating the program partici-
pant’s prospects for profitable operations 
during the term of program participation 
and after graduation. 
‘‘(II) An analysis of the program par-
ticipant’s strengths and weaknesses with 
particular attention to correcting any fi-
nancial, managerial, technical, or personnel 
conditions which are likely to impede the 
program participant from receiving con-
tracts other than those awarded under this 
section. 
‘‘(III) Specific targets, objectives, and 
goals, for the business development of the 
program participant during the next and 
succeeding years utilizing the results of the 
analyses conducted pursuant to subclauses 
(I) and (II).
243
‘‘(IV) A transition management plan 
outlining specific steps to assure profitable 
business operations after graduation (to be 
incorporated into the program participant’s 
plan during the first year of the transi-
tional stage of program participation). 
‘‘(V) Estimates of contract awards pur-
suant to this subsection and from other 
sources, which the program participant will 
require to meet the specific targets, objec-
tives, and goals for the years covered by its 
plan. 
‘‘(v) Each program participant shall annu-
ally review its currently approved plan with its 
Business Opportunity Specialist and modify 
such plan as may be appropriate. Any modified 
plan shall be submitted to the District Director 
for approval. The currently approved plan shall 
be considered valid until such time as a modified 
plan is reviewed by the Business Opportunity 
Specialist and approved by the District Director. 
‘‘(vi) Annual reviews pertaining to years in 
the transitional stage of program participation 
shall 
require, 
as 
appropriate, 
a 
written 
verification that such program participant has
245
‘‘(III) an estimate of the dollar value 
of the section 8(a) contract support level to 
be sought on a competitive basis, and 
‘‘(IV) such other information as may 
be requested by the Business Opportunity 
Specialist to provide effective business devel-
opment assistance to the program partici-
pant. 
‘‘(C) CONDITIONS FOR DENIAL OF ASSIST-
ANCE.—A program participant shall be denied 
all such assistance if such concern—
‘‘(i) voluntarily elects not to continue 
participation; 
‘‘(ii) completes the period of Program 
participation as prescribed by paragraph 
(21)(A); and 
‘‘(iii) is terminated or graduated pur-
suant to proceedings conducted in accord-
ance with paragraph (10). 
‘‘(D) TERMINATION
DEFINED.—For pur-
poses of this subsection, the term ‘terminated’ 
and the term ‘termination’ means the total de-
nial or suspension of assistance under this para-
graph or under this section prior to the gradua-
tion of the program participant or prior to the
246
expiration of the maximum program participa-
tion term. An action for termination shall be 
based upon good cause, including—
‘‘(i) the failure by such concern to 
maintain its eligibility for program partici-
pation; 
‘‘(ii) the failure of the concern to en-
gage in business practices that will promote 
its competitiveness within a reasonable pe-
riod of time as evidenced by, among other 
indicators, a pattern of unjustified delin-
quent performance or terminations for de-
fault with respect to contracts awarded 
under the authority of this subsection; 
‘‘(iii) a demonstrated pattern of failing 
to make required submissions or responses 
to Administration officials or employees in 
a timely manner; 
‘‘(iv) the willful violation of any rule 
or regulation of the Administrator per-
taining to material issues; 
‘‘(v) the debarment of the concern or its 
disadvantaged owners by any agency pursu-
ant to subpart 9.4 of title 48, Code of Fed-
247
eral Regulations (or any successor regula-
tion); or 
‘‘(vi) the conviction of the disadvan-
taged owner or an officer of the concern for 
any offense indicating a lack of business in-
tegrity including any conviction for embez-
zlement, theft, forgery, bribery, falsification 
or violation of section 16. For purposes of 
this clause, no termination action shall be 
taken with respect to a disadvantaged 
owner solely because of the conviction of an 
officer of the concern (who is other than a 
disadvantaged owner) unless such owner 
conspired with, abetted, or otherwise know-
ingly acquiesced in the activity or omission 
that was the basis of such officer’s convic-
tion. 
‘‘(E) INITIATION
OF
TERMINATION
PRO-
CEEDING.—(i) The District Director may ini-
tiate a termination proceeding by recommending 
such action to the Assistant Administrator for 
Minority Small Business and Capital Owner-
ship Development. 
‘‘(ii) Whenever the Assistant Administrator 
determines such termination is appropriate,
248
within 15 days after making such a determina-
tion the program participant shall be provided 
a written notice of intent to terminate, speci-
fying the reasons for such action. 
‘‘(iii) No program participant shall be ter-
minated from the program pursuant to subpara-
graph (D) without first being afforded an oppor-
tunity for a hearing in accordance with para-
graph (10). 
‘‘(iv) If a termination proceeding is initi-
ated against a program participant, such partic-
ipant shall be ineligible from receiving assistance 
pursuant to this section until the final disposi-
tion of the termination action. 
‘‘(v) If the program participant is rein-
stated upon final decision by the Administrator 
pursuant to paragraph (10), the time during 
which the program participant did not receive 
assistance shall be added on to the original pro-
gram term end date. 
‘‘(F) GRADUATION DEFINED.—For the pur-
poses of this subsection and subsection 8(b) the 
term ‘graduated’ or ‘graduation’ means that the 
program participant is recognized as successfully 
completing the program by substantially achiev-
249
ing the targets, objectives, and goals contained in 
the 
concern’s 
business 
plan 
thereby 
dem-
onstrating its ability to compete in the market-
place without assistance under this section. 
‘‘(G) BUSINESS
ACTIVITY
TARGETS.—(i) 
During the developmental stage of its participa-
tion in the program, a program participant 
shall take all reasonable efforts within its control 
to attain the targets contained in its business 
plan for contracts awarded other than pursuant 
to this subsection (hereinafter referred to as 
‘business activity targets.’). 
‘‘(ii) Such efforts shall be made a part of 
the business plan and shall be sufficient in scope 
and duration to satisfy the Administrator that 
the program participant will engage in a reason-
able marketing strategy that will maximize its 
potential to achieve its business activity targets. 
‘‘(iii) During the transitional stage of the 
program a program participant shall be subject 
to regulations regarding business activity targets 
that are promulgated by the Administrator. Such 
regulations shall: 
‘‘(I) Establish business activity targets 
applicable to program participants during
250
the fifth year and each succeeding year of 
program participation. 
‘‘(aa) Such activity targets shall, 
for such period of time, reflect a rea-
sonably consistent increase in contracts 
awarded other than pursuant to this 
subsection, expressed as a percentage of 
total sales. 
‘‘(bb) The Administrator may es-
tablish modified business activity tar-
gets for program participants that 
have participated in the program for a 
period of longer than 5 years on the 
date of the enactment of this Act. 
‘‘(II) Require the program participant 
to certify that it has met its business activ-
ity targets or that it is in compliance with 
such remedial measures as may have been 
ordered pursuant to regulations issued 
under subclause (III) prior to the receipt of 
any contract awarded pursuant to this sub-
section. 
‘‘(III) Authorize the Administrator to 
take appropriate remedial measures with 
respect to a program participant that has
251
failed to attain a required business activity 
target for the purpose of reducing such par-
ticipant’s dependence on contracts awarded 
pursuant to this section. 
‘‘(aa) Such remedial actions may 
include assisting the program partici-
pant to expand the dollar volume of its 
competitive business activity or lim-
iting the dollar volume of contracts 
awarded to the program participant 
pursuant to this subsection. 
‘‘(bb) Unless the remedial meas-
ures taken pursuant to subclause (aa) 
bar the award of contracts to program 
participants, no remedial measures 
shall be reviewable pursuant to para-
graph (10). 
‘‘(H) ELIGIBILITY
REVIEW.—(i) The Ad-
ministrator shall conduct an evaluation of a pro-
gram participant’s eligibility for continued par-
ticipation in the program whenever it receives 
specific and credible information alleging that 
such program participant no longer meets the re-
quirements for program eligibility.
252
‘‘(ii) Upon making a finding that a pro-
gram participant is no longer eligible, the Ad-
ministrator shall initiate a termination pro-
ceeding in accordance with subparagraphs (D) 
and (E). 
‘‘(iii) A program participant’s eligibility 
for award of any contract under the authority of 
this section may be suspended pursuant to sub-
part 9.4 of title 48, Code of Federal Regulations 
(or any successor regulation). 
‘‘(22) CERTIFICATION AND REVIEW BY ADMINIS-
TRATOR.—
‘‘(A) ASSISTANT ADMINISTRATOR COORDINA-
TION.—The Assistant Administrator for Minor-
ity Small Business and Capital Ownership De-
velopment shall be responsible for coordinating 
and formulating policies relating to Federal as-
sistance to small business concerns eligible for 
assistance under section 7(i) of this Act and pro-
gram participants. 
‘‘(B) DIVISION OF PROGRAM CERTIFICATION 
AND ELIGIBILITY.—(i) There is established a Di-
vision of Program Certification and Eligibility 
(hereinafter referred to in this paragraph as the 
‘Division’) in the Office of Minority Small Busi-
253
ness and Capital Ownership Development. The 
Division shall be headed by a Director who shall 
report directly to the Assistant Administrator for 
Minority Small Business and Capital Owner-
ship Development. The Division shall establish 
field offices within such regional offices of the 
Administration as may be necessary to perform 
efficiently its functions and responsibilities. 
‘‘(ii) Subject to the provisions of paragraph 
(5)(B), the functions and responsibility of the 
Division of Program Certification and Eligi-
bility are to—
‘‘(I) receive, review and evaluate appli-
cations for certification pursuant to para-
graphs (5), (6), and (7); 
‘‘(II) advise each program applicant 
within 15 days after the receipt of an appli-
cation as to whether such application is 
complete and suitable for evaluation and, if 
not, what matters must be rectified; 
‘‘(III) render recommendations on such 
applications to the Assistant Administrator 
for Minority Small Business and Capital 
Ownership Development;
254
‘‘(IV) review and evaluate financial 
statements and other submissions from con-
cerns participating in the program estab-
lished by this subsection to ascertain contin-
ued eligibility to receive subcontracts pursu-
ant to this section; 
‘‘(V) make a request for the initiation 
of termination or graduation proceedings, 
as appropriate, to the Assistant Adminis-
trator for Minority Small Business and 
Capital Ownership Development; 
‘‘(VI) make recommendations to the 
Assistant Administrator for Minority Small 
Business and Capital Ownership Develop-
ment concerning protests from applicants 
that have been denied program admission; 
‘‘(VII) decide protests regarding the 
status of a concern as a disadvantaged con-
cern for purposes of any program or activ-
ity conducted under the authority of sub-
section (d), or any other provision of Fed-
eral law that references such subsection for 
a definition of program eligibility; and 
‘‘(VIII) implement such policy direc-
tives as may be issued by the Assistant Ad-
255
ministrator for Minority Small Business 
and Capital Ownership Development pursu-
ant to subparagraph (E) regarding, among 
other things, the geographic distribution of 
concerns to be admitted to the program and 
the industrial make-up of such concerns. 
‘‘(C) PROGRAM ADMISSION AND CONTRACT 
OPPORTUNITIES.—An applicant shall not be de-
nied admission into the program established by 
this subsection due solely to a determination by 
the Division of Program Certification and Eligi-
bility that specific contract opportunities are un-
available to assist in the development of such 
concern unless—
‘‘(i) the Government has not previously 
procured and is unlikely to procure the 
types of products or services offered by the 
concern on a prime contract basis; or 
‘‘(ii) the purchases of such products or 
services by the Federal Government will not 
be in quantities sufficient to support the de-
velopmental needs of the applicant and 
other program participants providing the 
same or similar items or services.
256
‘‘(D) CERTIFICATION DECISION.—Except as 
provided in paragraph 5(B), not later than 90 
days after receipt of a completed application for 
program certification, the Assistant Adminis-
trator for Minority Small Business and Capital 
Ownership Development shall certify a small 
business concern as a program participant or 
shall deny such application. 
‘‘(E) DIVISION REVIEW.—
‘‘(i) Thirty days before the conclusion 
of each fiscal year, the Director of the Divi-
sion of Program Certification and Eligi-
bility shall review all concerns that have 
been admitted into the program during the 
preceding 12-month period. 
‘‘(ii) The review shall ascertain the 
number of entrants, their geographic dis-
tribution, and their industrial classifica-
tion. The Director shall also estimate the ex-
pected growth of the program during the 
next fiscal year and the number of addi-
tional Business Opportunity Specialists, if 
any, that will be needed to meet the antici-
pated demand for the program.
257
‘‘(iii) The findings and conclusions of 
the Director shall be reported to the Assist-
ant Administrator for Minority Small 
Business and Capital Ownership Develop-
ment by September 30 of each year. 
‘‘(iv) Based on such report and such 
additional data as may be relevant, the As-
sistant Administrator shall, by October 31 
of each year, issue rules as that term is de-
fined in section 551(4) of title 5, United 
States Code, applicable to such fiscal year 
that—
‘‘(I) establish priorities for the so-
licitation 
of 
program 
applications 
from underrepresented regions and in-
dustry categories; 
‘‘(II) assign staffing levels and al-
locate other program resources as nec-
essary to meet program needs; and 
‘‘(III) establish priorities in the 
processing and admission of new pro-
gram participants as may be necessary 
to achieve an equitable geographic dis-
tribution of concerns and a distribu-
tion of concerns across all industry
258
categories in proportions needed to in-
crease significantly contract awards to 
small business concerns owned and 
controlled by socially and economically 
disadvantaged individuals. When con-
sidering such increase the Adminis-
trator shall give due consideration to 
those industrial categories where Fed-
eral purchases have been substantial 
but where the participation rate of 
such concerns has been limited. 
‘‘(23) STAGES OF PROGRAM PARTICIPATION.—
‘‘(A) IN GENERAL.—The Capital ownership 
Development Program established by this sub-
section shall have a developmental stage and 
transitional stage. 
‘‘(B) DEVELOPMENTAL STAGE.—The devel-
opmental stage of program participation shall be 
designed to assist the concern in its effort to 
overcome its economic disadvantage by providing 
such assistance as may be necessary and appro-
priate to access its markets and to strengthen its 
financial and managerial skills. 
‘‘(C) TRANSITIONAL
STAGE.—The transi-
tional stage of program participation shall be
259
designed to overcome, insofar as practicable, the 
remaining elements of economic disadvantage 
and to prepare such concern for graduation from 
the program. 
‘‘(24) TYPES OF ASSISTANCE PROVIDED BY THE 
ADMINISTRATOR.—The Administrator shall make 
available during the developmental and transitional 
stages the following assistance: 
‘‘(A) Contract support pursuant to this sec-
tion. 
‘‘(B) Financial assistance pursuant to sec-
tion 7(a)(20). 
‘‘(C) A maximum of two exemptions from 
the requirements of section 1(a) of the Act enti-
tled ‘An Act to provide conditions for the pur-
chase of supplies and the making of contracts by 
the United States, and for other purposes’, ap-
proved June 30, 1936 (popularly known as the 
‘Walsh-Healey Act’; 41 U.S.C. 35(a)), which ex-
emptions shall apply only to contracts awarded 
pursuant to this section and shall only be used 
to allow for contingent agreements by a small 
business concern to acquire the machinery, 
equipment, facilities, or labor needed to perform 
such contracts. No exemption shall be made pur-
260
suant to this subparagraph if the contract to 
which it pertains has an anticipated value in ex-
cess of $10,000,000. 
‘‘(D)(i) Financial assistance whereby the 
Administrator may purchase in whole or in 
part, and on behalf of such concerns, skills train-
ing or upgrading for employees or potential em-
ployees of such concerns. 
‘‘(ii) For purposes of this subparagraph the 
term ‘training provider’ shall mean an institu-
tion of higher education, a community or voca-
tional college, or an institution eligible to pro-
vide skills training or upgrading under the Job 
Training Partnership Act or title I of the Work-
force Investment Act of 1998. 
‘‘(iii) Assistance may be made by direct 
payment to the training provider or by reim-
bursing the program participant or the partici-
pant’s employee, if such reimbursement is found 
to be reasonable and appropriate. 
‘‘(iv) The Administrator shall, in consulta-
tion with the Secretary of Labor, promulgate 
rules and regulations to implement this subpara-
graph that establish acceptable training and up-
grading performance standards and provide for
261
such monitoring or audit requirements as may 
be necessary to ensure the integrity of the train-
ing effort. 
‘‘(v) No financial assistance shall be grant-
ed under this subparagraph unless the Adminis-
trator determines each of the following: 
‘‘(I) The program participant has doc-
umented that it has first explored the use of 
existing cost-free or cost-subsidized training 
programs offered by public and private sec-
tor agencies working with programs of em-
ployment and training and economic devel-
opment. 
‘‘(II) No more than 5 employees or po-
tential employees of the program partici-
pant are recipients of any benefits under 
this subparagraph at any one time. 
‘‘(III) No more than $2,500 shall be 
made available for any one employee or po-
tential employee. 
‘‘(IV) The length of training or up-
grading financed by this subparagraph 
shall be no less than 1 month nor more than 
6 months.
262
‘‘(V) The program participant has 
given adequate assurance it will employ the 
trainee or upgraded employee for at least 6 
months after the training or upgrading fi-
nanced by this subparagraph has been com-
pleted and each trainee or upgraded em-
ployee has provided a similar assurance to 
remain within the employ of such concern 
for such period. 
‘‘(aa) If such concern, trainee, or 
upgraded employee breaches this agree-
ment, the Administrator shall be enti-
tled to obtain from the violating party 
the repayment of all funds expended on 
behalf of the violating party. 
‘‘(bb) Such repayment shall be 
made to the Administrator together 
with such interest and costs of collec-
tion as may be reasonable. 
‘‘(cc) The violating party shall be 
barred from receiving any further as-
sistance under this subparagraph. 
‘‘(VI) The training to be financed may 
take place either at such concern’s facilities 
or at those of the training provider.
263
‘‘(VII) The program participant will 
maintain such records as the Administrator 
deems appropriate to ensure that the provi-
sions of this paragraph and any other ap-
plicable law have not been violated. 
‘‘(E)(i) The transfer of technology or sur-
plus property owned by the United States to 
such a concern. 
‘‘(ii) Activities designed to effect such trans-
fer shall be developed in cooperation with the 
heads of Federal agencies and shall include the 
transfer by grant, license, or sale of such tech-
nology or property to such a concern. Such prop-
erty may be transferred to program participants 
on a priority basis. 
‘‘(iii) Technology or property transferred 
under this subparagraph shall be used by the 
concern during the normal conduct of its busi-
ness operation and shall not be sold or trans-
ferred to any other party (other than the Govern-
ment) during such concern’s term of participa-
tion in the program and for one year thereafter. 
‘‘(F) Training assistance whereby the Ad-
ministrator shall conduct training sessions to as-
sist individuals and enterprises eligible to receive
264
contracts under this section in the development 
of business principles and strategies to enhance 
their ability to successfully compete for contracts 
in the marketplace. 
‘‘(G) Joint ventures, leader-follow arrange-
ments, and teaming agreements between the pro-
gram participant and other program partici-
pants and other small business concerns with re-
spect to contracting opportunities. Such activi-
ties shall be undertaken on the basis of programs 
developed by the procuring agency with the as-
sistance of the Administration. 
‘‘(H) Transitional management business 
planning training and technical assistance. 
‘‘(25) TRANSITIONAL STAGE ASSISTANCE.—Pro-
gram participants in the developmental stage of pro-
gram participation shall be eligible for the assistance 
provided by subparagraphs (A), (B), (C), (D), (E), 
(F), and (G) of paragraph (24). 
‘‘(26) DEVELOPMENTAL
STAGE
ASSISTANCE.—
Program Participants in the transitional stage of 
Program participation shall be eligible for the assist-
ance provided by subparagraphs (A), (B), (F), (G), 
and (H) of paragraph (24).
267
mediately preceding fiscal year due to the 
operations of such concerns. 
‘‘(iv) A listing of all participants in 
the program during the preceding fiscal 
year identifying, by State and by region, 
for each firm: the name of the concern, the 
race or ethnicity, and gender of the dis-
advantaged owners, the dollar value of all 
contracts received in the preceding year, the 
dollar amount of advance payments received 
by each concern pursuant to contracts 
awarded under this section, and a descrip-
tion including (if appropriate) an estimate 
of the dollar value of all benefits received 
pursuant to paragraphs (25) and (26) and 
section 7(a)(20) during such year. 
‘‘(v) The total dollar value of contracts 
and options awarded during the preceding 
fiscal year pursuant to this section and 
such amount expressed as a percentage of 
total sales of—
‘‘(I) all firms participating in the 
program during such year; and 
‘‘(II) firms in each of the nine 
years of program participation.
268
‘‘(vi) A description of such additional 
resources or program authorities as may be 
required to provide the types of services 
needed over the next 2-year period to service 
the expected portfolio of firms certified pur-
suant to this section. 
‘‘(vii) The total dollar value of con-
tracts and options awarded pursuant to this 
section, at such dollar increments as the Ad-
ministrator deems appropriate, for each 6 
digit North American Industrial Classifica-
tion System code under which such con-
tracts and options were classified. 
‘‘(b) MANAGEMENT AND TECHNICAL ASSISTANCE.—
‘‘(1) CONTRACTS FOR ASSISTANCE.—The Admin-
istrator shall be required to enter into contracts with 
business concerns, not-for-profit entities, and other 
persons capable of providing management and tech-
nical assistance, as may be necessary, to participants 
in the program established in subsection (a), to firms 
described in paragraph (5) or paragraph (6) of that 
subsection but are not participants in the program es-
tablished pursuant to that subsection, and to small 
business concerns which have loans guaranteed pursu-
ant to section 7(i).
269
‘‘(2) SELECTION OF CONTRACTORS.—The Admin-
istrator shall select contractors based on the experi-
ence in advising small business concerns on financial 
and business operations, including but not limited to 
comprehensive business plans, and other functions 
needed to preserve and expand small businesses eligi-
ble for assistance under paragraph (1). To the extent 
practical, the Administrator shall select, as contrac-
tors, small business concerns but the primary evalua-
tion criteria shall be the technical ability of the con-
tractor to provide the services set forth in this sub-
section. 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to carry out 
this subsection $6,000,000 for each of fiscal years 
2004 and 2005. Such sums shall remain available 
until expended. 
‘‘(c) COORDINATION WITH OTHER AGENCIES.—The 
Administrator shall take such steps as may be necessary 
and appropriate, in coordination and cooperation with the 
heads of Federal agencies to insure that contracts, sub-
contracts, and deposits made by the Federal Government 
or with programs aided with Federal funds are placed in 
such way as to further the purposes of subsection (a) of this 
section and section 7(i).’’.
270
(b) COMMERCIAL MARKETING.—Section 8(d)(10) of 
the Small Business Act (15 U.S.C. 637(d)(10)) is amended 
to read as follows: 
‘‘(10) In the case of contracts within the provi-
sions of paragraphs (4), (5), and (6), the Adminis-
trator is authorized to—
‘‘(A) assign at least one commercial mar-
keting representative per state whose primary re-
sponsibilities shall be to—
‘‘(i) assist Federal agencies and busi-
nesses in complying with their responsibil-
ities under the provisions of this subsection, 
including the formulation of subcontracting 
plans pursuant to paragraph (4); 
‘‘(ii) review any solicitation for any 
contract to be let pursuant to paragraphs 
(4) and (5) to determine the maximum 
practicable opportunity for small business 
concerns, small manufacturers, small busi-
ness concerns owned and controlled by vet-
erans, small business concerns owned and 
controlled 
by 
service-disabled 
veterans, 
qualified HUBZone small business con-
cerns, small business concerns owned and 
controlled by socially and economically dis-
271
advantaged individuals, small business con-
cerns eligible for participation under section 
8(a), and small business concerns owned 
and controlled by women to participate as 
subcontractors in the performance of any 
contract resulting from any solicitation, 
and to submit its findings, which shall be 
advisory in nature, to the appropriate Fed-
eral agency; 
‘‘(iii) evaluate compliance with subcon-
tracting plans, either on a contract-by-con-
tract basis, or in the case of contractors 
having multiple contracts, on an aggregate 
basis including recommendations to the con-
tracting officer for an assessment of liq-
uidated damages; 
‘‘(iv) work directly with small busi-
nesses to counsel them on marketing and 
subcontracting to large business prime con-
tractors that have contracts with the Fed-
eral Government; 
‘‘(v) identify large business buyers of 
small business products and services; 
‘‘(vi) assist small businesses in receiv-
ing timely payment from large business
272
prime contractors that have contracts with 
the Federal Government; and 
‘‘(vii) perform program reviews of the 
small business outreach programs and sub-
contracting programs of large businesses. 
‘‘(B) Not later than September 30, 2004, 
each state shall be assigned at least one commer-
cial marketing representative, authorized by 
paragraph 10(A) of this section, who must be 
physically located in each state. 
‘‘(C) Not later than 120 days after enact-
ment of this Act, the Administrator shall, after 
the opportunity for notice and comment, promul-
gate regulations governing the Administrator’s 
review of subcontracting plans including the 
standards for determining good faith effort of 
compliance with the subcontracting plans.’’. 
(c) WOMEN-OWNED SMALL BUSINESS CONCERNS; AU-
THORITIES OF ADMINISTRATOR.—Subsections (m) and (n) 
of section 8 of the Small Business Act (15 U.S.C. 637 (m) 
and (n)) are amended to read as follows: 
‘‘(m) PROCUREMENT PROGRAM FOR WOMEN-OWNED 
SMALL BUSINESS CONCERNS.—
‘‘(1) DEFINITIONS.—In this subsection, the fol-
lowing definitions apply:
273
‘‘(A) SMALL
BUSINESS
CONCERN
OWNED 
AND CONTROLLED BY WOMEN.—The term ‘small 
business concern owned and controlled by 
women’ has the meaning given such term in sec-
tion 3(n), except that ownership shall be deter-
mined without regard to any community prop-
erty law. 
‘‘(2) AUTHORITY TO RESTRICT COMPETITION.—
In accordance with this subsection, a contracting offi-
cer may restrict competition for any contract for the 
procurement of goods or services by the Federal Gov-
ernment to small business concerns owned and con-
trolled by women, if—
‘‘(A) each of the concerns is not less than 51 
percent owned by 1 or more women who are eco-
nomically disadvantaged (and such ownership is 
determined without regard to any community 
property law); 
‘‘(B) the contracting officer has a reasonable 
expectation that 2 or more small business con-
cerns owned and controlled by women will sub-
mit offers for the contract; 
‘‘(C) the contract is for the procurement of 
goods or services with respect to an industry
274
identified by the Administrator pursuant to 
paragraph (4); 
‘‘(D) the anticipated award price of the 
contract (including options) does not exceed—
‘‘(i) $5,000,000, in the case of a con-
tract assigned an industrial classification 
code for manufacturing; or 
‘‘(ii) $3,000,000, in the case of all 
other contracts; 
‘‘(E) in the estimation of the contracting of-
ficer, the contract award can be made at a fair 
and reasonable price; and 
‘‘(F) each of the concerns—
‘‘(i) is certified by a Federal agency or 
a State government as a small business con-
cern owned and controlled by women; 
‘‘(ii) is certified by a national certi-
fying entity approved by the Administrator 
as a small business concern owned and con-
trolled by women; or 
‘‘(iii) certifies to the contracting officer 
that it is a small business concern owned 
and controlled by women and provides ade-
quate documentation in accordance with
275
standards established by the Administration 
to support such certification. 
‘‘(3) WAIVER.—With respect to a small business 
concern owned and controlled by women, the Admin-
istrator may waive subparagraph (2)(A) if the Ad-
ministrator determines that the concern is in an in-
dustry in which small business concerns owned and 
controlled by women are substantially underrep-
resented. 
‘‘(4) IDENTIFICATION OF INDUSTRIES.—
‘‘(A) IN
GENERAL.—The Administrator 
shall conduct a study to identify industries in 
which small business concerns owned and con-
trolled by women are underrepresented with re-
spect to Federal procurement contracting. 
‘‘(B) DETERMINATION BY CONTRACTING OF-
FICER.—Until such time as the Administrator 
conducts such study, the determination as to 
whether an industry is under-represented by 
small business concerns owned and controlled by 
women shall be made by the contracting officer. 
‘‘(C) DEADLINE.—Not later than 90 days 
after the date of the enactment of this subpara-
graph the Administrator shall—
276
‘‘(i) ensure the completion of the study 
described in this paragraph; 
‘‘(ii) approve national certifying enti-
ties 
for 
the 
purposes 
of 
paragraph 
(2)(F)(ii); and 
‘‘(iii) make determinations in accord-
ance with paragraph (3). 
‘‘(5) ENFORCEMENT; PENALTIES.—
‘‘(A) VERIFICATION
OF
ELIGIBILITY.—In 
carrying out this subsection, the Administrator 
shall use existing procedures established by the 
Office of Hearings and Appeals relating to—
‘‘(i) the filing, investigation, and dis-
position by the Administrator of any chal-
lenge to the eligibility of a small business 
concern to receive assistance under this sub-
section (including a challenge, filed by an 
interested party, relating to the veracity of 
a certification made or information pro-
vided to the Administration by a small 
business concern under paragraph (2)(F)); 
and 
‘‘(ii) verification by the Administrator 
of the accuracy of any certification made or 
information provided to the Administration
277
by a small business concern under para-
graph (2)(F). 
‘‘(B) EXAMINATIONS.—The procedures es-
tablished under subparagraph (A) may provide 
for program examinations (including random 
program examinations) by the Administrator of 
any small business concern making a certifi-
cation or providing information to the Adminis-
trator under paragraph (2)(F). 
‘‘(C) PENALTIES.—In addition to the pen-
alties described in section 16(d), any small busi-
ness concern that is determined by the Adminis-
trator to have misrepresented the status of that 
concern as a small business concern owned and 
controlled by women for purposes of this sub-
section, shall be subject to—
‘‘(i) section 1001 of title 18, United 
States Code; and 
‘‘(ii) sections 3729 through 3733 of 
title 31, United States Code. 
‘‘(6) PROVISION OF DATA.—Upon the request of 
the Administrator, the head of any Federal depart-
ment or agency shall promptly provide to the Admin-
istrator such information as the Administrator deter-
mines to be necessary to carry out this subsection.
278
‘‘(n) AUTHORITIES OF ADMINISTRATOR.—In carrying 
out its functions under subsections 7(i), 8(a), and 8(b) of 
this Act the Administrator may do the following: 
‘‘(1) Utilize, with their consent, the services and 
facilities of Federal agencies without reimbursement, 
and, with the consent of any State or political sub-
division of a State, accept and utilize the services and 
facilities of such State or subdivision without reim-
bursement. 
‘‘(2) Accept voluntary and uncompensated serv-
ices, notwithstanding section 1342 of title 31, United 
States Code. 
‘‘(3) Employ experts and consultants or organi-
zations pursuant to the authority in section 6(h). No 
individual may be employed under the authority of 
this paragraph for more than 100 days in any fiscal 
year. No individual employed under this paragraph 
may be compensated at rates in excess of the daily 
equivalent of the highest rate payable under section 
5332 of title 5, United States Code, including travel-
time. Individuals employed under this paragraph 
may be allowed, while away from their homes or reg-
ular places of business, travel expenses (including per 
diem in lieu of subsistence) as authorized by section 
5703 of title 5, United States Code for persons in the
279
Government service employed intermittently. Con-
tracts for employment under this paragraph may be 
renewed annually.’’. 
(d) CLERICAL AMENDMENT.—Section 8 of the Small 
Business Act (15 U.S.C. 637) is amended by striking ‘‘SEC. 
8.’’ inserting the following: 
‘‘SEC. 8. GOVERNMENT CONTRACT AND BUSINESS DEVEL-
OPMENT ASSISTANCE FOR SMALL BUSINESS 
CONCERNS, ETC.’’. 
SEC. 209. TRAINING AND ASSISTANCE. 
Section 12 of the Small Business Act (15 U.S.C. 641) 
is amended to read as follows:
‘‘SEC. 12. TRAINING AND ASSISTANCE. 
‘‘(a) ASSISTANCE.—The Administrator shall (through 
co-sponsorships, small business development centers, wom-
en’s business centers, the Office of Veterans Affairs, and 
other programs as the Administrator determines appro-
priate) provide technical and managerial assistance, advice 
and guidance on matters of government procurement (at the 
Federal, State, and local levels) and information on the 
policies, practices, and principles of good management, 
and, when appropriate, distribute publications and other 
material on Administration programs to small business 
concerns, including all categories of such concerns defined 
in section 3 of this Act.
280
‘‘(b) VOLUNTEERS.—
‘‘(1) The Administrator shall recruit executive 
volunteers to assist the Administrator in carrying out 
this section. 
‘‘(2) The Administrator shall recruit retired and 
active executives to form the Service Corps of Retired 
Executives and the Active Corps of Executives. Such 
executives will be responsible for providing technical 
and managerial assistance and advice to small busi-
ness concerns. 
‘‘(3) The Administrator shall recruit retired and 
active executives from large and small manufacturers 
to form the Service Corps of Retired Manufacturing 
Executives and the Active Corps of Manufacturing 
Executives. Such executives will advise, assist, and 
train small manufacturers. 
‘‘(4) The Administrator may enter into appro-
priate contracts, grants, or cooperative agreements 
with the volunteers or corps referred to in this sub-
section in order to provide the services set forth in 
this section. 
‘‘(5) The Administrator may maintain the head-
quarters of the corps referred to in this subsection and 
assign, at his discretion, Administration personnel to 
assist the volunteers.
281
‘‘(6) The volunteers may solicit cash, other per-
sonal property, and in-kind contributions from the 
private sector to be used to carry out their functions 
under this section. The volunteers may use payments 
from the Administrator made pursuant to this sub-
section to assist in such solicitations. 
‘‘(7) The Administrator may permit any indi-
vidual or group of persons participating in the pro-
grams established pursuant to this subsection to use 
any facilities of the Administration, including re-
gional and district offices, as well as clerical and 
computer services. 
‘‘(8) The volunteers, while carrying out the pur-
poses of this section, shall be deemed Federal employ-
ees for the purposes of the Federal tort claims provi-
sions in title 28, United States Code; and for the pur-
poses of subchapter I of chapter 81 of title 5, United 
States Code (relative to compensation to Federal em-
ployees for work injuries) shall be deemed civil em-
ployees of the United States within the meaning of the 
term ‘employee’ as defined in section 8101 of title 5, 
United States Code, and the provisions of that sub-
chapter shall apply except that in computing com-
pensation benefits for disability or death, the monthly
282
pay of a volunteer shall be deemed that received under 
the entrance salary for a grade GS–11 employee. 
‘‘(9) The Administrator may reimburse the vol-
unteers for all necessary out-of-pocket expenses inci-
dent to their provision of services under this section, 
or in connection with attendance at meetings spon-
sored by the Administrator, or for the cost of mal-
practice insurance, as the Administrator shall deter-
mine, in accordance with regulations which he or she 
shall prescribe, and, while they are carrying out such 
activities away from their homes or regular places of 
business, for travel expenses (including per diem in 
lieu of subsistence) as authorized by section 5703 of 
title 5, United States Code, for individuals serving 
without pay. 
‘‘(10) None of the services made available by vol-
unteers pursuant to this subsection shall be made 
available to any person or small business concern who 
is delinquent on a loan made pursuant to section 7 
of this Act or Title V of the Small Business Invest-
ment Act of 1958 unless such assistance relates solely 
to addressing the matter of the delinquency and a spe-
cific request is made in writing to the volunteer (and 
a record of such communication is maintained by the 
volunteer).
283
‘‘(11) No payment for supportive services or re-
imbursement of out-of-pocket expenses made to per-
sons serving pursuant to this subsection shall be sub-
ject to any tax or charge or be treated as wages or 
compensation for the purposes of unemployment, dis-
ability, retirement, public assistance, or similar ben-
efit payments, or minimum wage laws. 
‘‘(12) Under regulations which the Adminis-
trator shall prescribe, counsel may be employed and 
counsel fees, court costs, bail, and other expenses inci-
dental to the defense of volunteers may be paid in ju-
dicial or administrative proceedings arising directly 
out of the performance of activities pursuant to this 
subsection to which volunteers have been made par-
ties. 
‘‘(c) SMALL BUSINESS INSTITUTES.—In carrying out 
its functions under this section, the Administrator may 
make grants (including contracts or cooperative agree-
ments) to any public or private institution of higher edu-
cation for the establishment and operation of a small busi-
ness institute, which shall be used to provide business coun-
seling and assistance to small business concerns through the 
activities of students enrolled at the institution, which stu-
dents shall be entitled to receive educational credits for their 
activities. To the extent practicable, the Administrator shall
284
select applicants that demonstrate the best capability of 
serving small manufacturers. 
‘‘(d) BUSINESS GRANTS AND COOPERATIVE AGREE-
MENTS.—
‘‘(1) IN GENERAL.—In accordance with this sub-
section, the Administrator may make grants to and 
enter into cooperative agreements with any coalition 
of private entities, public entities, or any combination 
of private and public entities—
‘‘(A) to expand business-to-business rela-
tionships between large and small businesses 
by—
‘‘(i) identifying opportunities for small 
business concerns located in areas of high 
unemployment or low income; 
‘‘(ii) assisting small business concerns 
and small manufacturers in finding oppor-
tunities to supply goods and services to 
other businesses, particularly large busi-
nesses that have previously obtained such 
goods and services from businesses located 
outside of the United States; and 
‘‘(iii) providing such other assistance 
as the Administrator may identify;
285
‘‘(B) to maintain a database, to the extent 
practicable, of supply chain management oppor-
tunities for small business concerns and small 
manufacturers; 
‘‘(C) to provide businesses, directly or indi-
rectly, with online information and a database 
of companies that are interested in mentor-pro-
tege programs or community-based, statewide, or 
local business development programs; and 
‘‘(D) by providing businesses with informa-
tion on the best practices used by other business 
concerns in establishing mentor-protege or other 
business development programs and not limited 
solely to procurement by Federal, State, or local 
governments. 
‘‘(2) MATCHING REQUIREMENT.—The Adminis-
trator may make a grant to a coalition under para-
graph (1) only if the coalition provides for activities 
described in paragraph (1) an amount, either in kind 
or in cash, equal to the grant amount. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section, the term ‘supply chain’ means a network of 
facilities and distribution options that performs the 
functions of procurement of materials, transformation 
of these materials into intermediate and furnished
286
products, and distribution of the finished products to 
customers. 
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out 
this subsection $10,000,000, to remain available until 
expended, for each of fiscal years 2004 through 
2005.’’.
SEC. 210. CONTRACTING ASSISTANCE; ETC. 
(a) 
CERTAIN
DISAGREEMENTS
SUBMITTED
TO 
OMB.—Section 15(a) of the Small Business Act (15 U.S.C. 
644(a)) is amended by striking the sentence beginning 
‘‘Whenever the Administrator and the contracting procure-
ment agency fail to agree,’’ and inserting the following: 
‘‘Whenever the Administration and the contracting procure-
ment agency fail to agree, the Administrator shall submit 
the matter to the Director of the Office of Management and 
Budget, who shall render his decision regarding the matter 
not later than 10 days after receiving the matter. The Direc-
tor may not delegate his duties under the preceding sentence 
except to a subordinate official within the Office of Manage-
ment and Budget appointed by the President, by and with 
the advice and consent of the Senate.’’. 
(b) PROGRAMS FOR BLIND AND HANDICAPPED INDI-
VIDUALS.—Section 15(c) of the Small Business Act (15 
U.S.C. 644(c)) is amended to read as follows:
287
‘‘(c) PROGRAMS FOR BLIND AND HANDICAPPED INDI-
VIDUALS.—
‘‘(1) As used in this subsection: 
‘‘(A) The term ‘Committee’ means the Com-
mittee for Purchase From People Who Are Blind 
or Severely Disabled established under the first 
section of the Act entitled ‘An Act to create a 
Committee on Purchases of Blind-made Prod-
ucts, and for other purposes’, approved June 25, 
1938 (41 U.S.C. 46). 
‘‘(B) The term ‘public or private organiza-
tion for the disabled’ means any organization—
‘‘(i) which is organized under the laws 
of the United States or of any State, oper-
ated in the interest of disabled individuals, 
the net income of which does not inure in 
whole or in part to the benefit of any share-
holder or other individual; 
‘‘(ii) which complies with any applica-
ble occupational health and safety pre-
scribed by the Secretary of Labor; and 
‘‘(iii) which in the production of com-
modities and in the provision of services 
during any fiscal year employs disabled in-
dividuals for not less than 75 percent of the
288
man-hours required for the production or 
provision of the commodities or services. 
‘‘(C) The term ‘disabled person’ means any 
individual who—
‘‘(i) is a service-disabled veteran; or 
‘‘(ii) has a disability (as defined in 
section 3 of the Americans with Disabilities 
Act of 1990) which limits such individual’s 
selection of any type of employment for 
which such individual would otherwise be 
qualified or qualifiable. 
‘‘(2) The Administrator shall evaluate the place-
ment of products on the procurement list maintained 
by the Committee pursuant to section 2 of the Act en-
titled ‘An Act to create a Committee on Purchases of 
Blind made Products, and for other purposes’, ap-
proved June 25, 1938 (41 U.S.C. 47) to determine the 
impact of such placement on for-profit small business 
concerns. 
‘‘(3) The Administrator shall monitor and evalu-
ate the participation of public or private organiza-
tions for the disabled in Federal procurement con-
tracts and shall annually report the results of such 
monitoring and evaluation to the Committee on 
Small Business of the House of Representatives and
289
the Committee on Small Business and Entrepreneur-
ship of the Senate not later than March 31st of each 
year. This report shall include the impact of such 
participation on for-profit small business concerns. 
‘‘(4)(A) Not later than 10 days after the an-
nouncement of a proposed award of a contract by an 
agency or department to a public or private organiza-
tion for the disabled, a for-profit small business con-
cern that has experienced or is likely to experience se-
vere economic injury as the result of the proposed 
award may file an appeal of the proposed award with 
the Administrator. 
‘‘(B) If such a concern files an appeal of a pro-
posed award under subparagraph (A) and the Admin-
istrator, after consultation with the Executive Direc-
tor of the Committee, finds that the concern has expe-
rienced or is likely to experience severe economic in-
jury as the result of the proposed award, not later 
than 30 days after the filing of the appeal, the Ad-
ministrator shall require each agency and department 
having procurement powers to take such action as 
may be appropriate to alleviate economic injury sus-
tained or likely to be sustained by the concern. 
‘‘(5) Each agency and department having pro-
curement powers shall report to the Office of Federal
290
Procurement Policy each time a contract subject to 
paragraph (2)(A) is entered into, and shall include in 
its report the amount of the next highest bid sub-
mitted by a for-profit small business concern. The Of-
fice of Federal Procurement Policy shall collect data 
reported under the preceding sentence through the 
Federal procurement data system and shall report to 
the Administrator who shall notify all such agencies 
and departments when the maximum amount of 
awards authorized under paragraph (2)(A) has been 
made during any fiscal year. 
‘‘(6) For the purposes of this subsection, a con-
tract may be awarded only if at least 75 percent of 
the direct labor performed on each item being pro-
duced under the contract in the sheltered workshop or 
performed in providing each type of service under the 
contract by the sheltered workshop is performed by 
disabled individuals. 
‘‘(7) Agencies awarding one or more contracts to 
such an organization pursuant to the provisions of 
this subsection may use multiyear contracts, if appro-
priate.’’. 
(c) MINIMUM SOLICITATION PERIOD.—Section 15(e) of 
the Small Business Act (15 U.S.C. 644(e)) is amended by 
adding at the end the following new paragraph:
291
‘‘(5) MINIMUM
SOLICITATION
PERIOD.—In the 
case of a solicitation of offers for a bundled contract 
that is issued by the head of an agency, small busi-
ness concerns shall be allowed to submit offers for a 
period of not less than 60 days beginning on the date 
the solicitation is issued.’’. 
(d) PROCUREMENT GOALS.—Section 15(g) of the 
Small Business Act (15 U.S.C. 644(g)) is amended to read 
as follows: 
‘‘(g)(1) The President shall before the close of each fis-
cal year establish new Government-wide procurement goals 
for the following fiscal year for procurement contracts 
awarded to small business concerns, small business concerns 
owned and controlled by service-disabled veterans, qualified 
HUBZone small business concerns, small business concerns 
owned and controlled by socially and economically dis-
advantaged individuals, and small business concerns owned 
and controlled by women. The President shall not simply 
readopt the preceding years procurement goals. The Govern-
ment-wide goal for participation by small business concerns 
shall be established at not less than 23 percent of the total 
value of all prime contract awards for each fiscal year. The 
Government-wide goal for participation by small business 
concerns owned and controlled by service-disabled veterans 
shall be established at not less than 3 percent of the total
292
value of all prime contract and subcontract awards for each 
fiscal year. The Government-wide goal for participation by 
qualified HUBZone small business concerns shall be estab-
lished at not less than 3 percent of the total value of all 
prime contract awards. The Government-wide goal for par-
ticipation by small business concerns owned and controlled 
by socially and economically disadvantaged individuals 
shall be established at not less than 5 percent of the total 
value of all prime contract awards and not less than 5 per-
cent of the total value of all subcontract awards for each 
fiscal year. The Government-wide goal for participation by 
small business concerns owned and controlled by women 
shall be established at not less than 5 percent of the total 
value of all prime contract awards and not less than 5 per-
cent of the total value of all subcontract awards for each 
fiscal year. Notwithstanding the Government-wide goal, 
each agency shall have an annual goal that presents, for 
that agency, the maximum practicable opportunity for 
small business concerns, small manufacturers, small busi-
ness concerns owned and controlled by service-disabled vet-
erans, qualified HUBZone small business concerns, small 
business concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, small business con-
cerns participating in the program established by section 
8(a) of this Act, and small business concerns owned and
293
controlled by women to participate in the performance of 
contracts let by such agency. For the purposes of the pre-
ceding sentence, each agency is prohibited from counting 
towards its procurement goal for small business concerns 
owned and controlled by socially and economically dis-
advantaged individuals any contract awarded to small 
business concerns participating in the program established 
pursuant to section 8(a) of this Act. The Administrator and 
the Administrator of the Office of Federal Procurement Pol-
icy shall, when exercising their authority pursuant to para-
graph (2), insure that the cumulative annual prime con-
tract goals for all agencies meet or exceed the annual Gov-
ernment-wide prime contract goal established by the Presi-
dent pursuant to this paragraph. 
‘‘(2) The head of each Federal agency shall, after con-
sultation with the Administrator, establish goals for the 
participation by small business concerns, small manufac-
turers, small business concerns owned and controlled by 
service-disabled veterans, qualified HUBZone small busi-
ness concerns, small business concerns owned and controlled 
by socially and economically disadvantaged individuals, 
small business concerns participating in the program estab-
lished pursuant to section 8(a) of this Act, and small busi-
ness concerns owned and controlled by women in procure-
ment contracts of such agency having a value of $25,000
294
or more. For the purposes of the preceding sentence, each 
agency is prohibited from counting towards its procurement 
goal for small business concerns owned and controlled by 
socially and economically disadvantaged individuals any 
contract awarded to small business concerns participating 
in the program established pursuant to section 8(a) of this 
Act. Goals established under this subsection shall be jointly 
established by the Administrator and the head of each Fed-
eral agency and shall realistically reflect the potential of 
small business concerns, small manufacturers, small busi-
ness concerns owned and controlled by service-disabled vet-
erans, qualified HUBZone small business concerns, small 
business concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, small business con-
cerns participating in the program established pursuant to 
section 8(a) of this Act, and small business concerns owned 
and controlled by women to perform subcontracts under 
such contracts. For the purposes of the preceding sentence, 
each agency is prohibited from counting towards its pro-
curement goal for small business concerns owned and con-
trolled by socially and economically disadvantaged individ-
uals any contract awarded to small business concerns par-
ticipating in the program established pursuant to section 
8(a) of this Act. Whenever the Administrator and the head 
of any Federal agency fail to agree on established goals,
295
the disagreement shall be submitted to the Administrator 
of the Office of Federal Procurement Policy for final deter-
mination. For the purpose of establishing goals under this 
subsection, the head of each Federal agency shall make con-
sistent efforts to annually expand participation by small 
business concerns from each industry category in procure-
ment contracts of the agency, including participation by 
small business concerns owned and controlled by service-
disabled veterans, qualified HUBZone small business con-
cerns, small business concerns owned and controlled by so-
cially and economically disadvantaged individuals, small 
business concerns participating in the program established 
pursuant to section 8(a), small business concerns owned 
and controlled by women, and small manufacturers. For 
the purposes of the preceding sentence, each agency is pro-
hibited from counting towards its procurement goal for 
small business concerns owned and controlled by socially 
and economically disadvantaged individuals any contract 
awarded to small business concerns participating in the 
program established pursuant to section 8(a) of this Act. 
The head of each Federal agency, in attempting to attain 
such participation, shall consider—
‘‘(A) contracts awarded as the result of unre-
stricted competition; and
296
‘‘(B) contracts awarded after competition re-
stricted to eligible small business concerns under this 
section and under the program established under sec-
tion 8(a).’’. 
(e) REPORTS.—Section 15(h) of the Small Business 
Act (15 U.S.C. 644(h)) is amended to read as follows: 
‘‘(h)(1) At the conclusion of each fiscal year, the head 
of each Federal agency shall report to the Administrator 
on the extent of participation by small business concerns, 
small manufacturers, small business concerns owned and 
controlled by veterans (including service-disabled veterans), 
qualified HUBZone small business concerns, small business 
concerns owned and controlled by socially and economically 
disadvantaged individuals, small business concerns partici-
pating in the program established pursuant to section 8(a) 
of this Act, and small business concerns owned and con-
trolled by women in procurement contracts of such agency. 
Such reports shall contain appropriate justifications for 
failure to meet the goals established under subsection (g) 
of this section. Additionally, such reports shall contain suf-
ficient justification if goals established for the most recent 
fiscal year end were established lower than the same goals 
for the previous fiscal year. 
‘‘(2) The Administrator shall annually compile and 
analyze the reports submitted by the individual agencies
297
pursuant to paragraph (1) and shall submit them to the 
President and the Congress. The Administrator’s submis-
sion to the President shall include the following: 
‘‘(A) The Government-wide goals for participa-
tion by small business concerns, small business con-
cerns owned and controlled by service-disabled vet-
erans, qualified HUBZone small business concerns, 
small business concerns owned and controlled by so-
cially and economically disadvantaged individuals, 
small business concerns participating in the program 
established pursuant to section 8(a) of this Act, and 
small business concerns owned and controlled by 
women and the performance in attaining such goals. 
‘‘(B) The goals in effect for each agency and the 
agency’s performance in attaining such goals. 
‘‘(C) An analysis of any failure to achieve the 
Government-wide goals or any individual agency 
goals and the actions planned by such agency (and 
approved by the Administrator) to achieve the goals 
in the succeeding fiscal year. 
‘‘(D) The number and dollar value of prime con-
tracts awarded to small business concerns, small 
manufacturers small business concerns owned and 
controlled by service-disabled veterans, qualified 
HUBZone small business concerns, small business
298
concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, small business 
concerns participating in the program established 
pursuant to section 8(a) of this Act, and small busi-
ness concerns owned and controlled by women. For 
each agency and on a government-wide basis, number 
and dollar value of contracts issued through—
‘‘(i) noncompetitive negotiation; 
‘‘(ii) competition restricted to small busi-
ness concerns owned and controlled by socially 
and economically disadvantaged individuals; 
‘‘(iii) competition restricted to small busi-
ness concerns participating in the program es-
tablished by section 8(a) of this Act; 
‘‘(iv) competition restricted to small busi-
ness concerns; and 
‘‘(v) unrestricted competitions. 
‘‘(E) The number and dollar value of sub-
contracts awarded to small business concerns, small 
manufacturers, small business concerns owned and 
controlled by service-disabled veterans, qualified 
HUBZone small business concerns, small business 
concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, small business 
concerns participating in the program established
299
pursuant to section 8(a) of this Act, and small busi-
ness concerns owned and controlled by women. 
‘‘(3) The President shall include the information re-
quired by paragraph (2) in each annual report to the Con-
gress on the state of small business prepared pursuant to 
section 303(a) of the Small Business Economic Policy Act 
of 1980 (15 U.S.C. 631b(a)). 
‘‘(4) For the purpose of this subsection, the term ‘small 
disadvantaged business’ means any small business concern 
that is certified as a ‘small disadvantaged business’ by the 
Administrator.’’. 
(f) RESTRICTED COMPETITION.—Section 15(j) of the 
Small Business Act (15 U.S.C. 644(j)) is amended to read 
as follows: 
‘‘(j)(1) Each contract for the purchase of goods and 
services that has an anticipated value greater than $2,500 
but not greater than $1,000,000 shall be reserved exclusively 
for small business concerns unless the contracting officer is 
unable to obtain offers from two or more small business con-
cerns that are competitive with market prices and are com-
petitive with regard to the quality and delivery of the goods 
or services being purchased. 
‘‘(2) In carrying out paragraph (1), a contracting offi-
cer shall consider a responsive offer timely received from 
an eligible small business offeror.
300
‘‘(3) Nothing in paragraph (1) shall be construed as 
precluding an award of a contract with a value not greater 
than $1,000,000 under the authority of section 8(a) of this 
Act, section 2323 of title 10, United States Code, section 
712 of the Business Opportunity Development Reform Act 
of 1988 (Public Law 100–656; 15 U.S.C. 644 note), or sec-
tion 7102 of the Federal Acquisition Streamlining Act of 
1994.’’. 
(g) ASSIGNMENT
OF PROCUREMENT CENTER REP-
RESENTATIVES.—Section 15(l) of the Small Business Act 
(15 U.S.C. 644(l)) is amended to read as follows: 
‘‘(l)(1) The Administrator shall assign to each major 
procurement center a procurement center representative 
with such assistance as may be appropriate. The procure-
ment center representative shall carry out the activities de-
scribed in paragraph (2), and shall be an advocate for the 
breakout of items for procurement through full and open 
competition, whenever appropriate, while maintaining the 
integrity of the system in which such items are used, and 
an advocate for the use of full and open competition, when-
ever appropriate, for the procurement of supplies and serv-
ices by such center. Any procurement center representative 
assigned under this subsection shall be in addition to the 
representative referred to in subsection (k)(6).
301
‘‘(2) A procurement center representative is authorized 
to—
‘‘(A) work directly with small businesses to coun-
sel them on the Federal market and contracting with 
the Federal Government; 
‘‘(B) identify Federal agency buyers of small 
business products and services; 
‘‘(C) attend any provisioning conference or simi-
lar evaluation session during which determinations 
are made as to whether requirements are to be pro-
cured through other than full and open competition 
and make recommendations with respect to such re-
quirements to the members of such conference or ses-
sion; 
‘‘(D) review, at any time, restrictions on com-
petition previously imposed on items through acquisi-
tion method coding or similar procedures, and rec-
ommend to personnel of the appropriate activity the 
prompt reevaluation of such limitations; 
‘‘(E) review restrictions on competition arising 
out of restrictions on the rights of the United States 
in technical data, and, when appropriate, recommend 
that personnel of the appropriate activity initiate a 
review of the validity of such an asserted restriction;
302
‘‘(F) obtain from any governmental source, and 
make available to personnel of the appropriate activ-
ity, technical data necessary for the preparation of a 
competitive solicitation package for any item of sup-
ply or service previously procured noncompetitively 
due to the unavailability of such technical data; 
‘‘(G) have access to procurement records and 
other data of the procurement center commensurate 
with the level of such representative’s approved secu-
rity clearance classification; and 
‘‘(H) receive unsolicited engineering proposals 
and, when appropriate—
‘‘(i) either—
‘‘(I) conduct a value analysis of such 
proposal to determine whether such pro-
posal, if adopted, will result in lower costs 
to the United States without substantially 
impeding legitimate acquisition objectives 
and forward to personnel of the appropriate 
activity recommendations with respect to 
such proposal; or 
‘‘(II) forward such proposals without 
analysis to personnel of the activity respon-
sible for reviewing such proposals and who 
shall furnish the breakout procurement cen-
303
ter representative with information regard-
ing the disposition of any such proposal; 
and 
‘‘(ii) review the systems that account for the 
acquisition and management of technical data 
within the procurement center to assure that 
such systems provide the maximum availability 
and access to data needed for the preparation of 
offers to sell to the United States those supplies 
to which such data pertain which potential 
offerors are entitled to receive. 
‘‘(3) A procurement center representative is authorized 
to appeal the failure to act favorably on any recommenda-
tion made pursuant to paragraph (2). Such appeal shall 
be filed and processed in the same manner and subject to 
the same conditions and limitations as an appeal filed by 
the Administrator pursuant to subsection (a). 
‘‘(4) The Administrator shall assign and co-locate at 
least two small business technical advisers to each major 
procurement center in addition to such other advisers as 
may be authorized from time to time. The sole duties of 
such advisers shall be to assist the procurement center rep-
resentative for the center to which such advisers are as-
signed in carrying out the functions described in paragraph 
(2) and the representatives referred to in subsection (k)(6).
305
duct familiarization sessions for contracting officers and 
other appropriate personnel of the procurement center to 
which such representative is assigned. Such sessions shall 
acquaint the participants with the provisions of this sub-
section and shall instruct them in methods designed to fur-
ther the purposes of such subsection. 
‘‘(B) The procurement center representative shall pre-
pare and personally deliver an annual briefing and report 
to the head of the procurement center to which such rep-
resentative is assigned. Such briefing and report shall detail 
the past and planned activities of the representative and 
shall contain such recommendations for improvement in the 
operation of the center as may be appropriate. The head 
of such center shall personally receive such briefing and re-
port and shall, within sixty calendar days after receipt, re-
spond, in writing, to each recommendation made by such 
representative.’’. 
(h) OTHER DUTIES OF ADMINISTRATOR.—Section 15 
of the Small Business Act (15 U.S.C. 644) is amended by 
adding at the end the following new subsection: 
‘‘(q)(1) The Administrator shall obtain information as 
to methods and practices which Government prime contrac-
tors utilize in letting subcontracts and to take action to en-
courage the letting of subcontracts by prime contractors to
306
small business concerns and small manufacturers at prices 
and on conditions and terms which are fair and equitable. 
‘‘(2) The Administrator shall determine within any in-
dustry the concerns, firms, persons, corporations, partner-
ships, cooperatives, or other business enterprises which are 
to be designated as small business concerns or small manu-
facturers for the purpose of effectuating the provisions of 
this Act. To carry out this purpose the Administrator, when 
requested to do so, shall issue in response to each such re-
quest an appropriate certificate certifying an individual 
concern as a small business concern or small manufacturer 
in accordance with criteria expressed in this Act. Any such 
certificate shall be subject to revocation when the concern 
covered thereby ceases to be a small business concern or 
small manufacturer. Offices of the Government having pro-
curement or lending powers, or engaging in the disposal 
of Federal property or allocating materials or supplies, or 
promulgating regulations affecting the distribution of mate-
rials or supplies, shall accept as conclusive the Administra-
tion’s determination as to which enterprises are to be des-
ignated as small business concerns or small manufacturers, 
as authorized and directed under this paragraph. 
‘‘(3)(A) The Administration shall certify to Govern-
ment procurement officers, and officers engaged in the sale 
and disposal of Federal property, with respect to all ele-
307
ments of responsibility, including, but not limited to, capa-
bility, competency, capacity, credit, integrity, perseverance, 
and tenacity, of any small business concern or group of such 
concerns to receive and perform a specific Government con-
tract. A Government procurement officer or an officer en-
gaged in the sale and disposal of Federal property may not, 
for any reason specified in the preceding sentence, preclude 
any small business concern or group of such concerns from 
being awarded such contract without referring the matter 
for a final disposition to the Administration. 
‘‘(B) If a Government procurement officer finds that 
an otherwise qualified small business concern may be ineli-
gible due to the provisions of section 35(a) of the Act enti-
tled ‘An Act to provide conditions for the purchase of sup-
plies and the making of contracts by the United States, and 
for other purposes’, approved June 30, 1936 (popularly 
known as the ‘Walsh-Healey Act’; 41 U.S.C. 35(a)), he shall 
notify the Administration in writing of such finding. The 
Administration shall review such finding and shall either 
dismiss it and certify the small business concern to be an 
eligible Government contractor for a specific Government 
contract or if it concurs in the finding, forward the matter 
to the Secretary of Labor for final disposition, in which 
case the Administration may certify the small business con-
308
cern only if the Secretary of Labor finds the small business 
concern not to be in violation. 
‘‘(C) In any case in which a small business concern 
or group of such concerns has been certified by the Adminis-
trator pursuant to (A) or (B) to be a responsible or eligible 
Government contractor as to a specific Government con-
tract, the officers of the Government having procurement 
or property disposal powers are directed to accept such cer-
tification as conclusive, and shall let such Government con-
tract to such concern or group of concerns without requiring 
it to meet any other requirement of responsibility or eligi-
bility. Notwithstanding the first sentence of this subpara-
graph, the Administrator may not establish an exemption 
from referral or notification or refuse to accept a referral 
or notification from a Government procurement officer 
made pursuant to subparagraph (A) or (B) of this para-
graph, but nothing in this paragraph shall require the proc-
essing of an application for certification if the small busi-
ness concern to which the referral pertains declines to have 
the application processed. 
‘‘(4) The Administrator shall obtain from any Federal 
department, establishment, or agency engaged in procure-
ment or in the financing of procurement or production such 
reports concerning the letting of contracts and subcontracts
309
and the making of loans to business concerns as it may 
deem pertinent in carrying out its functions under this Act. 
‘‘(5) The Administrator shall obtain from any Federal 
department, establishment, or agency engaged in the dis-
posal of Federal property such reports concerning the solici-
tation of bids, time of sale, or otherwise as it may deem 
pertinent in carrying out its functions under this Act. 
‘‘(6) The Administrator shall obtain from suppliers of 
materials information pertaining to the method of filling 
orders and the bases for allocating their supply, whenever 
it appears that any small business is unable to obtain mate-
rials from its normal sources. 
‘‘(7) The Administrator shall make studies and rec-
ommendations to the appropriate Federal agencies to insure 
that a fair proportion of the total purchases and contracts 
for property and services for the Government be placed with 
small-business concerns, to insure that a fair proportion of 
Government contracts for research and development be 
placed with small-business concerns, to insure that a fair 
proportion of the total sales of Government property be 
made to small-business concerns, and to insure a fair and 
equitable share of materials, supplies, and equipment to 
small-business concerns. 
‘‘(8) The Administrator shall consult and cooperate 
with all Government agencies for the purpose of insuring
310
that small-business concerns shall receive fair and reason-
able treatment from such agencies.’’. 
(i) PRIORITY
OF SMALL BUSINESS PROCUREMENT 
PREFERENCES.—Section 15 of the Small Business Act (15 
U.S.C. 644) is further amended by adding at the end the 
following new subsection: 
‘‘(r) PRIORITY OF SMALL BUSINESS PROCUREMENT 
PREFERENCES.—
‘‘(1) IN GENERAL.—A contracting officer may 
not make a procurement from a source on the basis 
of a preference provided under any provision of this 
Act referred to in paragraph (2) unless the con-
tracting officer has determined that such procurement 
cannot be made on the basis of a preference provided 
under another provision of this Act with a higher pri-
ority under such subsection. 
‘‘(2) ORDER OF PRIORITY.—For purposes of this 
subsection, the following provisions of this Act are 
listed in order of priority from highest to lowest: 
‘‘(A) Section 8(a). 
‘‘(B) Section 31(b)(2)(B). 
‘‘(C) Section 31(b)(2)(A). 
‘‘(D) Section 8(m). 
‘‘(3) PRIORITY
OF
CERTAIN
OTHER
PROCURE-
MENT
PREFERENCES.—A procurement may not be
311
made from a source on the basis of a preference pro-
vided under any provision of this Act referred to in 
paragraph (2) if the procurement would otherwise by 
made from a different source under section 4124 or 
4125 of title 18, United States Code, or the Act enti-
tled ‘An Act to create a Committee on Purchases of 
Blind made Products, and for other purposes’, ap-
proved June 25, 1938 (41 U.S.C. 47).’’. 
(j) PROCUREMENT PROGRAM FOR VERY SMALL BUSI-
NESS CONCERNS.—Section 15 of the Small Business Act (15 
U.S.C. 644) is further amended by adding at the end the 
following new subsection: 
‘‘(s) PROCUREMENT PROGRAM FOR VERY SMALL BUSI-
NESS CONCERNS.—
‘‘(1) ESTABLISHMENT.—The Administrator shall 
establish and carry out a program in accordance with 
the requirements of this subsection to provide im-
proved access to Federal contract opportunities for 
very small business concerns. 
‘‘(2) PROCUREMENT CONTRACTS.—
‘‘(A) IDENTIFICATION OF CONTRACTS.—The 
Administrator shall identify procurement con-
tracts of Federal agencies for award under the 
program.
313
‘‘(A) in the case of a small manufacturer, 
annual 
gross 
receipts 
of 
not 
more 
than 
$2,000,000; or 
‘‘(B) in any other case, annual gross re-
ceipts of not more than $500,000. 
‘‘(5) REGULATIONS.—The Administrator shall—
‘‘(A) issue proposed regulations to carry out 
this subsection not later than 180 days after the 
date of enactment of this subsection; and 
‘‘(B) issue final regulations to carry out 
this subsection not later than 270 days after the 
date of enactment of this subsection.’’. 
(k) OTHER AMENDMENTS TO SECTION 15.—
(1) Section 15(e)(1) of the Small Business Act 
(15 U.S.C. 644(e)(1)) is amended by inserting ‘‘in the 
following order’’ after ‘‘concerns’’. 
(2) Section 15(e)(4) of the Small Business Act 
(15 U.S.C. 644(e)(4)) is amended by striking ‘‘bun-
dled’’. 
(3) Section 15(k)(9) of the Small Business Act 
(15 U.S.C. 644(k)(9)) is amended by striking ‘‘Ad-
ministration’’ and inserting ‘‘Administrator’’. 
(4) Section 15(p)(4)(A) of the Small Business 
Act (15 U.S.C. 644(p)(4)(A)) is amended by striking 
‘‘Administration’’ and inserting ‘‘Administrator’’.
314
SEC. 211. AUTHORIZATION OF APPROPRIATIONS; ETC. 
Section 20 of the Small Business Act (15 U.S.C. 631 
note) is amended to read as follows: 
‘‘SEC. 20. AUTHORIZATION OF APPROPRIATIONS; ETC. 
‘‘(a)(1) For fiscal year 2004 and each fiscal year there-
after, there are authorized to be appropriated such sums 
as may be necessary and appropriate, to remain available 
until expended, and to be available solely—
‘‘(A) to carry out the Small Business Develop-
ment Center Program under section 21, but not to ex-
ceed the annual funding level, as specified in section 
21(j)(7); 
‘‘(B) to pay the expenses of the National Small 
Business Development Center Advisory Board, as pro-
vided in section 21(m)(1); 
‘‘(C) to pay the expenses of the information shar-
ing system, as provided in section 21(o); 
‘‘(D) to pay the expenses of the association re-
ferred to in section 21(k) for conducting the certifi-
cation program, as provided in section 21(l); and 
‘‘(E) to pay the expenses of the Administration, 
including salaries of examiners, for conducting ex-
aminations as part of the accreditation program con-
ducted by the association referred to in section 21(l). 
‘‘(2)(A) Notwithstanding any other provision of law, 
the Administrator shall enter into commitments for direct
315
loans and to guarantee loans, debentures, payment of rent-
als, or other amounts due under qualified contracts and 
other types of financial assistance and enter into commit-
ments to purchase debentures and preferred securities and 
to guarantee sureties against loss pursuant to programs 
under this Act and the Small Business Investment Act of 
1958, in the full amounts provided by law subject only to—
‘‘(i) the availability of qualified applications; 
and 
‘‘(ii) limitations contained in appropriations 
Acts. 
‘‘(B) Nothing in this paragraph authorizes the Admin-
istrator to reduce or limit its authority to enter into such 
commitments. 
‘‘(3) Subject to approval in appropriations Acts, 
amounts authorized for preferred securities, debentures or 
participating securities under title III of the Small Busi-
ness Investment Act of 1958 may be obligated in one fiscal 
year and disbursed or guaranteed in any 1 or more of the 
4 subsequent fiscal years. 
‘‘(4) The amount of deferred participation loans au-
thorized in this section—
‘‘(A) shall mean the net amount of the loan prin-
cipal guaranteed by the Administrator (and does not 
include any amount which is not guaranteed); and
316
‘‘(B) shall be available for a national program, 
except as otherwise provided in section 7(a). 
‘‘(b) There are authorized to be appropriated to the 
Administration for each fiscal year such sums as may be 
necessary to carry out the provisions of this Act and the 
Small Business Investment Act of 1958. There also are here-
by authorized to be appropriated such sums as may be nec-
essary and appropriate for the carrying out of the provi-
sions and purposes, including administrative expenses, of 
sections 7(b) of this Act; and there are authorized to be 
transferred from such sums as may be necessary and appro-
priate for such administrative expenses. 
‘‘(c) FISCAL YEAR 2004.—
‘‘(1) PROGRAM LEVELS.—The following program 
levels are authorized for fiscal year 2004: 
‘‘(A) For the programs authorized by this 
Act, the Administrator is authorized to make—
‘‘(i) $70,000,000 in technical assist-
ance grants, as provided in section 7(m); 
and 
‘‘(ii) $100,000,000 in direct loans, as 
provided in section 7(m). 
‘‘(B) For the programs authorized by this 
Act, the Administrator is authorized to make 
$22,000,000,000 in deferred participation loans
317
and other financings. Of such sum, the Adminis-
tration is authorized to make—
‘‘(i) $16,000,000,000 in general busi-
ness loans as provided in section 7(a); 
‘‘(ii) $5,500,000,000 in financings as 
provided in section 7(a)(13) of this Act and 
section 504 of the Small Business Invest-
ment Act of 1958; and 
‘‘(iii) $500,000,000 in loans as pro-
vided in section 7(a)(21). 
‘‘(C) For the programs authorized by title 
III of the Small Business Investment Act of 
1958, the Administrator is authorized to make—
‘‘(i) $5,000,000,000 in purchases of 
participating securities; and 
‘‘(ii) $4,000,000,000 in guarantees of 
debentures. 
‘‘(D) For the programs authorized by part 
B of title IV of the Small Business Investment 
Act of 1958, the Administration is authorized to 
enter 
into 
guarantees 
not 
to 
exceed 
$6,000,000,000, of which not more than 50 per-
cent may be in bonds approved pursuant to sec-
tion 411(a)(3) of that Act.
318
‘‘(E) There is authorized to be appropriated 
$7,000,000 to carry out section 12(b). 
‘‘(2) ADDITIONAL AUTHORIZATIONS.—
‘‘(A) There are authorized to be appro-
priated to the Administration for fiscal year 
2004 such sums as may be necessary to carry out 
this Act not elsewhere provided for, including ad-
ministrative expenses and necessary loan capital 
for disaster loans pursuant to section 7(b), and 
to carry out the Small Business Investment Act 
of 1958, including salaries and expenses of the 
Administration. 
‘‘(B) Notwithstanding any other provision 
of this paragraph, for fiscal year 2004—
‘‘(i) no funds are authorized to be pro-
vided to carry out the loan program author-
ized by section 7(a)(21) except by transfer 
from another Federal department or agency 
to the Administration, unless the program 
level authorized for general business loans 
under paragraph (1)(B)(i) is fully funded; 
and 
‘‘(ii) the Administrator may not ap-
prove loans on behalf of the Administration 
or on behalf of any other department or
319
agency, by contract or otherwise, under 
terms and conditions other than those spe-
cifically authorized under this Act or the 
Small Business Investment Act of 1958, ex-
cept that he may approve loans under sec-
tion 7(a)(21) of this Act in gross amounts 
of not more than $1,250,000. 
‘‘(d) FISCAL YEAR 2005.—
‘‘(1) PROGRAM LEVELS.—The following program 
levels are authorized for fiscal year 2005: 
‘‘(A) For the programs authorized by this 
Act, the Administrator is authorized to make—
‘‘(i) $$75,000,000 in technical assist-
ance grants as provided in section 7(m); 
and 
‘‘(ii) $105,000,000 in direct loans, as 
provided in section 7(m). 
‘‘(B) For the programs authorized by this 
Act, the Administrator is authorized to make 
$23,000,000,000 in deferred participation loans 
and other financings. Of such sum, the Adminis-
tration is authorized to make—
‘‘(i) $16,500,000,000 in general busi-
ness loans as provided in section 7(a);
320
‘‘(ii) $6,000,000,000 in financings as 
provided in section 7(a)(13) of this Act and 
section 504 of the Small Business Invest-
ment Act of 1958; and 
‘‘(iii) $500,000,000 in loans as pro-
vided in section 7(a)(21). 
‘‘(C) For the programs authorized by title 
III of the Small Business Investment Act of 
1958, the Administration is authorized to 
make—
‘‘(i) $5,500,000,000 in purchases of 
participating securities; and 
‘‘(ii) $4,500,000,000 in guarantees of 
debentures. 
‘‘(D) For the programs authorized by part 
B of title IV of the Small Business Investment 
Act of 1958, the Administration is authorized to 
enter 
into 
guarantees 
not 
to 
exceed 
$6,000,000,000, of which not more than 50 per-
cent may be in bonds approved pursuant to sec-
tion 411(a)(3) of that Act. 
‘‘(E) There is authorized to be appropriated 
$7,000,000 to carry out section 12(b). 
‘‘(2) ADDITIONAL AUTHORIZATIONS.—
321
‘‘(A) There are authorized to be appro-
priated to the Administration for fiscal year 
2005 such sums as may be necessary to carry out 
this Act not elsewhere provided for, including ad-
ministrative expenses and necessary loan capital 
for disaster loans pursuant to section 7(b), and 
to carry out the Small Business Investment Act 
of 1958, including salaries and expenses of the 
Administration. 
‘‘(B) Notwithstanding any other provision 
of this paragraph, for fiscal year 2005—
‘‘(i) no funds are authorized to be pro-
vided to carry out the loan program author-
ized by section 7(a)(21) except by transfer 
from another Federal department or agency 
to the Administration, unless the program 
level authorized for general business loans 
under paragraph (1)(B)(i) is fully funded; 
and 
‘‘(ii) the Administrator may not ap-
prove loans on behalf of the Administration 
or on behalf of any other department or 
agency, by contract or otherwise, under 
terms and conditions other than those spe-
cifically authorized under this Act or the
322
Small Business Investment Act of 1958, ex-
cept that he may approve loans under sec-
tion 7(a)(21) of this Act in gross amounts 
of not more than $1,250,000.’’. 
SEC. 212. SMALL BUSINESS DEVELOPMENT CENTERS. 
(a) IN GENERAL.—Section 21 of the Small Business 
Act (15 U.S.C. 648) is amended to read as follows: 
‘‘SEC. 21. SMALL BUSINESS DEVELOPMENT CENTER PRO-
GRAM. 
‘‘(a) ESTABLISHMENT OF PROGRAM.—The Adminis-
trator is authorized to make grants to any eligible appli-
cant to establish the network of small business development 
centers proposed in the plan submitted by such applicant 
under subsection (b). 
‘‘(b) SELECTION OF GRANTEES.—
‘‘(1) APPLICATION.—An eligible applicant may 
apply for a grant under subsection (a) by submitting 
to the Administrator for approval a plan for estab-
lishing a network of small business development cen-
ters. 
‘‘(2) SELECTION.—The Administrator shall select 
the applicant that demonstrates it has the budgetary 
and other resources to ensure that it will provide the 
most 
comprehensive 
and 
coordinated 
assistance 
throughout the State. The Administrator shall require
323
the grantee to have a separate budget for the purpose 
of operating its network of small business development 
centers and to primarily utilize institutions of higher 
education and women’s business centers operating 
pursuant to section 29 to provide for the operation of 
the small business development centers. The Adminis-
trator may approve, conditionally approve, or reject, 
a plan or combination of plans submitted under this 
section. The Administrator may not delegate the au-
thority to select grantees under this section except to 
the Deputy Administrator. 
‘‘(3) LIMITATION BY STATE.—
‘‘(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the Administrator 
shall select one grantee from each State to serve 
the entire State. 
‘‘(B) 
UNAVAILABILITY
EXCEPTION.—The 
Administrator may select 2 grantees to serve a 
State if no eligible applicant submits an appli-
cation to serve the entire State. With respect to 
any such State, the Administrator, at the end of 
the 2-year period beginning on the date of the se-
lection of such grantees, shall seek applications 
under this subsection for the purpose of replacing
324
such grantees with a single grantee to serve the 
entire State. 
‘‘(C) HISTORICAL
EXCEPTION.—Subpara-
graph (A) shall not apply with respect to any 
State if multiple grantees served such State dur-
ing calendar year 2000 or 2001. 
‘‘(D) CERTAIN TERRITORIES.—In the case 
that no eligible applicant from a qualified terri-
tory applies for a grant under this section, the 
Administrator may select a grantee from any 
State to serve such qualified territory. For pur-
poses of the preceding sentence, the term ‘quali-
fied territory’ means Guam, the United States 
Virgin Islands, American Samoa, and the Com-
monwealth of the Northern Mariana Islands. 
‘‘(4) ELIGIBLE APPLICANT.—For purposes of this 
section, the term ‘eligible applicant’ means—
‘‘(A) any institution of higher education; 
‘‘(B) any women’s business center operating 
pursuant to section 29; or 
‘‘(C) in the case of an entity that was re-
ceiving a grant under this section on December 
31, 1990, any of the following: 
‘‘(i) Any State government or any 
agency thereof.
325
‘‘(ii) Any regional entity. 
‘‘(iii) Any State-chartered develop-
ment, credit or finance corporation. 
‘‘(iv) Any entity formed by two or 
more of the entities described in this para-
graph. 
‘‘(5) REQUIREMENT TO SEEK APPLICATIONS.—If 
for any reason a grant under this section is termi-
nated or not renewed, the Administrator shall seek 
applications from eligible applicants with respect to 
such grant. 
‘‘(c) GRANT PROVISIONS.—
‘‘(1) AGREEMENT BETWEEN GRANTEE AND AD-
MINISTRATOR.—The Administrator and the grantee 
shall jointly develop, negotiate, and agree upon the 
terms and conditions of the grant. The grantee shall 
also consult with the district office or offices within 
the State to determine the special services and assist-
ance that are needed by the community or commu-
nities served by the grantee’s small business develop-
ment centers. 
‘‘(2) REQUIREMENTS.—Each grant shall—
‘‘(A) allow the grantee to serve portions of 
the State by subcontracting the operation of a 
small business development center to another en-
326
tity, provided that such small business develop-
ment centers shall, to the extent feasible, be lo-
cated at institutions of higher education or 
Women’s Business Centers established pursuant 
to section 29 of this Act; 
‘‘(B) ensure that the grantee provides serv-
ices as close as possible to small business con-
cerns by providing extension services and uti-
lizing satellite facilities, including those of any 
subcontractor; 
‘‘(C) ensure that the grantee provides facili-
ties and staff for each small business develop-
ment center to provide maximum accessibility 
and benefit to small business concerns; 
‘‘(D) ensure that the grantee is utilizing the 
resources of other Federal agencies in providing 
the services and assistance set forth in subsection 
(f); and 
‘‘(E) allow the grantee to enter into a con-
tract described in subsection (g)(2). 
‘‘(3) PROHIBITION ON DELEGATION TO DISTRICT 
OFFICES.—The Administrator shall not delegate any 
authority under paragraph (1) to any employee of the 
Administration located in a regional or district office.
327
‘‘(4) FORM OF GRANT AGREEMENTS.—For pur-
poses of this section, the term ‘grant’ includes any 
contract or cooperative agreement. 
‘‘(5) PROHIBITION ON CERTAIN GRANT REQUIRE-
MENTS.—The Administrator shall not require, and a 
grant agreement shall not include a requirement, that 
the grantee serve a particular number of small busi-
ness concerns with respect to loans under section 7 of 
this Act or title V of the Small Business Investment 
Act of 1958. 
‘‘(d) 
TERM, 
RENEWAL, 
AND
TERMINATION
OF 
GRANTS.—
‘‘(1) TERM
OF
GRANTS.—Each grant made 
under this section shall be made on the basis of a cal-
endar year or the Federal fiscal year, as determined 
by the Administrator. 
‘‘(2) AUTOMATIC RENEWAL.—Unless the Admin-
istrator for cause terminates the grant or the grantee 
decides not to seek renewal of the grant, the Adminis-
trator and the grantee shall renew the agreement and 
may make mutually satisfactory modifications to the 
agreement. The renewal shall take effect on the date 
of termination of the old agreement. 
‘‘(3) STANDARDS FOR TERMINATION.—After the 
opportunity for notice and comment and consultation
328
with the association authorized by subsection (k), the 
Administrator shall promulgate standards for deter-
mining when cause exists to terminate a grantee. 
Such standards shall be codified in the Code of Fed-
eral Regulations and shall take into account the 
grantee’s compliance with the standards set forth in 
the grant agreement, any budgetary restrictions faced 
by the grantee, the overall economic climate in the 
State served by the grantee, and the accreditation of 
the grantee’s small business development centers 
(whether operated by the grantee or through a subcon-
tractor) under the program established pursuant to 
subsection (l). 
‘‘(4) NOTICE OF TERMINATION.—If the Adminis-
trator determines that cause exists to terminate a 
grant agreement under this section, the Administrator 
shall provide the grantee with written notification set-
ting forth the reasons therefor and affording the ap-
plicant an opportunity for a hearing pursuant to sec-
tions 554, 556, and 557 of title 5, United States Code. 
‘‘(e) MANAGEMENT OF SMALL BUSINESS DEVELOP-
MENT CENTERS BY GRANTEES.—
‘‘(1) APPOINTMENT
OF
GRANTEE
DIRECTOR.—
Each Grantee shall appoint a full-time director to 
oversee the operations of the grant, the subcontractors
329
to the grantee, and the small business development 
centers operated by the grantee. The grantee’s director 
shall be responsible for accounting for any Federal 
funds used by the grantee to carry out the require-
ments of this section. The grantee shall have the sole 
discretion of selecting the director without requiring 
the approval of the Administrator, except that the Ad-
ministrator may terminate the employment of the 
grantee’s director if the Administrator determines 
that the grantee’s director is unfit for the position be-
cause of a prior conviction for a felony. 
‘‘(2) SMALL
BUSINESS
DEVELOPMENT
CENTER 
STAFF.—Each small business development center shall 
have a staff, which shall be full-time, part-time, or on 
a contract basis, as the grantee may determine. 
‘‘(3) EXPENDITURES.—Expenditures of funds by 
the grantee shall not require the approval of the Ad-
ministrator except that the Administrator may pro-
hibit an expenditure using Federal funds if, after con-
sultation with the General Counsel, the Administrator 
determines that such expenditure violates Federal law. 
‘‘(f) SERVICES PROVIDED BY THE GRANTEE THROUGH 
SMALL BUSINESS DEVELOPMENT CENTERS.—
‘‘(1) IN GENERAL.—Each grantee and its sub-
contractors shall assist small business concerns in
330
solving problems concerning operations, manufac-
turing, engineering, technology exchange and develop-
ment, personnel administration, marketing, sales, 
merchandising, finance, accounting, business strategy 
development, and other disciplines required for small 
business growth and expansion, innovation, increased 
productivity, and management improvement, and for 
decreasing industry economic concentrations. Small 
Business Development Centers shall, in providing as-
sistance to small manufacturers, coordinate such as-
sistance and utilize the resources of the Manufac-
turing Extension Partnership of the National Insti-
tutes of Standards and Technology. 
‘‘(2) PERIODIC MODIFICATION.—Each grantee or 
its subcontractors shall continue to upgrade and mod-
ify its services, as needed, in order to meet the chang-
ing and evolving needs of the small business commu-
nity and those of small manufacturers in particular. 
‘‘(3) ACCESS TO PROFESSIONALS.—Each grantee 
shall ensure that small business development centers 
provide access to: 
‘‘(A) Business analysts to counsel, assist, 
and inform small business clients. 
‘‘(B) Technology transfer agents to provide 
state of art technology to small business concerns
331
through coupling with national and regional 
technology data sources. 
‘‘(C) Information specialists to assist in 
providing information searches and referrals to 
small business concerns. 
‘‘(D) Part-time professional specialists to 
conduct research or to provide counseling assist-
ance whenever the need arises. 
‘‘(E) Laboratory and adaptive engineering 
facilities. 
‘‘(4) SERVICES.—Each grantee shall ensure that 
the services provided by its network of small business 
development centers include—
‘‘(A) furnishing one-to-one individual coun-
seling to small business concerns, including—
‘‘(i) working with individuals to in-
crease awareness of basic credit practices 
and credit requirements; 
‘‘(ii) working with individuals to de-
velop business plans, financial packages, 
credit applications, and contract proposals; 
‘‘(iii) working with the Administration 
to develop and provide informational tools 
for use in working with individuals on pre-
332
business startup planning, existing business 
expansion, and export planning; and 
‘‘(iv) working with individuals referred 
by the district offices of the Administration 
and Administration participating lenders; 
‘‘(B) assisting in technology transfer, re-
search and development, including applied re-
search, and coupling from existing sources to 
small business concerns, including—
‘‘(i) working to increase the access of 
small business concerns to the capabilities of 
automated flexible manufacturing systems; 
‘‘(ii) working through existing net-
works and developing new networks for 
technology transfer that encourage partner-
ship between the small business and aca-
demic communities to help commercialize 
university-based research and development 
and introduce university-based engineers 
and scientists to their counterparts in small 
technology-based firms and small manufac-
turers; 
‘‘(iii) exploring the viability of devel-
oping shared production facilities, under 
appropriate circumstances; and
333
‘‘(iv) assisting small manufacturers in 
developing more efficient operations, includ-
ing coordination of assistance with the 
Manufacturing Extension Partnership of 
the National Institutes of Standards and 
Technology; 
‘‘(C) in cooperation with the Department of 
Commerce, the entities providing services pursu-
ant to section 12(d), and other relevant Federal 
agencies, actively assisting small business con-
cerns in exporting by identifying and developing 
potential export markets, facilitating export 
transactions, developing linkages between United 
States small business concerns and prescreened 
foreign buyers, assisting small business concerns 
to participate in international trade shows, as-
sisting small business concerns in obtaining ex-
port financing, assisting small manufacturers in 
identifying supply chain management opportu-
nities, and facilitating the development or reori-
entation of marketing and production strategies; 
where appropriate, the grantee and the Adminis-
trator may work in cooperation with the State 
to establish a State international trade center for 
these purposes;
334
‘‘(D) developing a program in conjunction 
with the Export-Import Bank and local and re-
gional Administration offices that will enable 
Small Business Development Centers to serve as 
an information network and to assist small busi-
ness applicants for Export-Import Bank financ-
ing programs, and otherwise identify and help to 
make available export financing programs to 
small business concerns; 
‘‘(E) working closely with the small business 
community, small business consultants, State 
agencies, universities and other appropriate 
groups to make translation services more readily 
available to small business concerns doing busi-
ness, or attempting to develop business, in for-
eign markets; 
‘‘(F) in providing assistance under this sub-
section, grantees shall cooperate with the Depart-
ment of Commerce and other relevant Federal 
agencies to increase access to available export 
market information systems such as the CIMS 
system; 
‘‘(G) assisting small business concerns to 
develop and implement strategic business plans 
to timely and effectively respond to the planned
335
closure (or reduction) of a Department of Defense 
facility within the community, or actual or pro-
jected reductions in such firms’ business base due 
to the actual or projected termination (or reduc-
tion) of a Department of Defense program or a 
contract in support of such program—
‘‘(i) by developing broad economic as-
sessments of the adverse impacts of—
‘‘(I) the closure (or reduction) of 
the Department of Defense facility on 
the small business concerns providing 
goods or services to such facility or to 
the military and civilian personnel 
currently stationed or working at such 
facility; and 
‘‘(II) the termination (or reduc-
tion) of a Department of Defense pro-
gram (or contracts under such pro-
gram) on the small business concerns 
participating in such program as a 
prime contractor, subcontractor or sup-
plier at any tier; 
‘‘(ii) by developing, in conjunction 
with appropriate Federal, State, and local 
governmental entities and other private sec-
338
small business concerns and prescreened foreign 
buyers, assisting rural small business concerns to 
participate in international trade shows, assist-
ing rural small business concerns in obtaining 
export financing and developing marketing and 
production strategies; 
‘‘(N) assisting rural small business concerns 
in developing marketing and production strate-
gies that will enable them to better compete in 
the domestic market by providing technical as-
sistance needed by rural small business concerns, 
by making available managerial assistance to 
rural small business concerns, and by providing 
information and assistance in obtaining financ-
ing for business startups and expansion; 
‘‘(O) in conjunction with the United States 
Travel and Tourism Administration, assist rural 
small business concerns in developing the tour-
ism potential of rural communities by—
‘‘(i) identifying the cultural, historic, 
recreational, and scenic resources of such 
communities; 
‘‘(ii) providing assistance to small 
business concerns in developing tourism
339
marketing and promotion plans relating to 
tourism in rural areas; and 
‘‘(iii) assisting small business concerns 
to obtain capital for starting or expanding 
businesses primarily serving tourists; 
‘‘(P) maintaining lists of local and regional 
private consultants to whom small business con-
cerns can be referred; 
‘‘(Q) providing information to small busi-
ness concerns regarding compliance with regu-
latory requirements; 
‘‘(R) developing informational publications, 
establishing resource centers of reference mate-
rials, and distributing compliance guides pub-
lished under section 312(a) of the Small Business 
Regulatory Enforcement Fairness Act of 1996; 
‘‘(S) providing small business concerns with 
access to a wide variety of export-related infor-
mation by establishing on-line computer linkages 
between small business development centers and 
an international trade data information network 
with ties to the Export Assistance Center pro-
gram;
340
‘‘(T) providing information and assistance 
to small business concerns with respect to estab-
lishing drug-free workplace programs; 
‘‘(U) in the case of a small business develop-
ment center located at an institution of higher 
learning, hosting semi-annually a procurement 
conference to which the grantee (or its sub-
contractors) invites small business concerns, in-
cluding small manufacturers, to meet with the 
procurement officials of such institution in an 
effort to increase procurement by such institution 
from small business concerns and small manu-
facturers; 
‘‘(V) providing comprehensive plans (devel-
oped in cooperation with relevant State and Fed-
eral agencies) relating to the export potential of 
small business concerns, including small manu-
facturers; and 
‘‘(W) assisting small business concerns to 
develop and implement strategic business plans 
to timely and effectively respond to the closure of 
a large business concern that has a significant 
adverse impact on the community—
341
‘‘(i) by developing broad economic as-
sessments of the adverse impacts of such clo-
sure; 
‘‘(ii) by developing, in conjunction 
with appropriate Federal, State, and local 
governmental entities and other private sec-
tor organizations, the parameters of a tran-
sition adjustment program adaptable to the 
needs of individual small business concerns; 
‘‘(iii) by conducting appropriate pro-
grams to inform the affected small business 
community regarding the adverse impacts 
identified under clause (i) and the economic 
adjustment assistance available to such 
firms; 
‘‘(iv) by assisting small business con-
cerns to develop and implement an individ-
ualized transition business plan; and 
‘‘(v) by assisting unemployed individ-
uals in establishing a small business con-
cern. 
‘‘(g) SPECIAL RULES RELATING TO SMALL BUSINESS 
DEVELOPMENT CENTERS.—
‘‘(1) SERVICES TO OUT-OF-STATE SMALL BUSI-
NESS CONCERNS.—The Administrator may allow a
342
small business development center to serve small busi-
ness concerns located outside the State in which such 
center is located (or, in the case of a State with more 
than one grantee, outside the area served by the 
grantee) to the extent such business concerns are lo-
cated within close geographical proximity to the small 
business development center as determined by the Ad-
ministrator. 
‘‘(2) CONTRACTS WITH OTHER AGENCIES.—Sub-
ject to the restrictions set forth in this paragraph, a 
grantee (or its subcontractors, with the grantee’s ap-
proval) may contract with a Federal Department or 
agency to provide specific assistance to small business 
concerns through its network of small business devel-
opment centers. Before bidding on a contract de-
scribed in this paragraph, a grantee shall receive ap-
proval from the Administrator. Before granting ap-
proval, the Administrator shall consider the subject 
and scope of the contract and the extent to which per-
formance of the contract would provide assistance to 
small business and not impair the performance of the 
grantee’s obligations under this section. A contract for 
assistance under this paragraph shall not count to-
ward the achievement of any contracting goal under 
section 15(g).
343
‘‘(3) SMALL BUSINESS VENDORS.—Each grantee 
shall ensure, to the extent practicable, that its network 
of small business development centers utilize and com-
pensate qualified small business vendors, including 
private management consultants, private consulting 
engineers, and private testing laboratories, to provide 
services under this section to small business concerns. 
To the extent appropriate for the community served 
by the small business development center, such quali-
fied small business vendors should include at least one 
such vendor with expertise in manufacturing and as-
sisting small manufacturers. 
‘‘(4) COORDINATION
WITH
DISTRICT
OFFICES, 
ETC.—The grantees shall ensure that the small busi-
ness development centers shall work in close coopera-
tion with the Administration’s regional and district 
offices, the local small business community, and ap-
propriate State and local agencies. No action by a 
grantee or its subcontractors or staff shall require the 
approval of any employee in a regional or district of-
fice of the Administration. Any such employee shall, 
after consultation with district counsel, notify the As-
sistant Administrator for Small Business Develop-
ment Centers if such employee believes that the grant-
ee or its subcontractors or staff has taken action that
344
violates the law or jeopardizes the legal position of 
the United States. 
‘‘(5) ASSISTANCE FROM STATE INTERNATIONAL 
TRADE OFFICES.—The grantee may use funds pro-
vided by State international trade offices and co-lo-
cate employees of such offices at small business devel-
opment centers. 
‘‘(6) COORDINATION
WITH
ADMINISTRATION.—
On an annual basis, the grantee, after consultation 
with the district director, shall review and coordinate 
public and private partnerships and cosponsorships 
with the Administrator for the purpose of more effi-
ciently leveraging available resources on a national 
and a State basis. Should the grantee be unable to 
consult with the district director, the grantee shall 
consult with the Assistant Administrator for Small 
Business Development Centers. 
‘‘(7) PROHIBITION
ON
CERTAIN
FEES.—Each 
grantee shall ensure that small business development 
centers shall not impose or otherwise collect a fee or 
other compensation in connection with the provision 
of counseling services under this section. 
‘‘(8) PRIVACY REQUIREMENTS.—
‘‘(A) IN GENERAL.—Each grantee shall en-
sure that small business development centers
345
shall not disclose the name or address of any in-
dividual or small business concern receiving as-
sistance under this section without the consent of 
such individual or small business concern, except 
that—
‘‘(i) the Administrator shall require 
such disclosure if ordered to do so by a 
court in any civil or criminal action; and 
‘‘(ii) if the Administrator considers it 
necessary while undertaking a financial 
audit of a small business development center 
or the grantee’s network of small business 
development centers, the Administrator shall 
require such disclosure for the sole purpose 
of undertaking such audit. 
‘‘(B) REGULATIONS.—After notice and com-
ment and not later than 180 days after the date 
of the enactment of this subparagraph, the Ad-
ministrator shall issue regulations to establish 
standards for requiring disclosures during a fi-
nancial audit under subparagraph (A)(ii). 
‘‘(h) ADDITIONAL GRANTS.—
‘‘(1) IN GENERAL.—Any grantee may apply to 
the Administrator for an additional grant to be used 
solely to assist—
346
‘‘(A) with the development and enhancement 
of exports by small business concerns; 
‘‘(B) in technology transfer; 
‘‘(C) with outreach, development, and en-
hancement of minority-owned small business 
startups or expansions, HUBZone small business 
concerns, veteran-owned small business startups 
or expansions, and women-owned small business 
startups or expansions, in communities affected 
by base closings or military or corporate 
downsizing, or in rural or underserved commu-
nities; and 
‘‘(D) small manufacturers. 
‘‘(2) CERTAIN RULES TO APPLY.—Except as oth-
erwise provided in this subsection, any additional 
grant under this subsection shall be subject to rules 
similar to the rules that apply to grants made under 
subsection (a). 
‘‘(3) GRANT
AMOUNT.—A grant shall not be 
made under this subsection if such grant which would 
exceed the grantee’s pro rata share of a $15,000,000 
program based upon the populations to be served by 
the grantee as compared to the total population of the 
United States. The minimum amount of eligibility 
for any State shall be $100,000. Any additional grant
347
made under this section shall not be taken into ac-
count for purposes of the dollar program limitations 
specified in subsection (j). 
‘‘(4) REALLOCATION OF UNUSED FUNDS.—If the 
Administrator has not received an application for an 
additional grant from a grantee pursuant to this sub-
section within 90 days after the Administrator and 
the grantee have signed an agreement pursuant to 
subsection (c) or within 60 days after the grantee and 
Administrator has renewed an agreement pursuant to 
subsection (c), the Administrator may make such 
grant to any eligible applicant (determined without 
regard to so much of subsection (b)(4)(C) as precedes 
‘1990,’) in that State to carry out the activities speci-
fied in this subsection subject to the requirements of 
paragraphs (2) and (3). 
‘‘(i) MATCHING FUNDS.—
‘‘(1) IN GENERAL.—The Administrator shall re-
quire as a condition of any grant (or amendment or 
modification thereof) made to a grantee under this 
section, that a matching amount equal to the amount 
of such grant be provided from sources other than the 
Federal Government, to be comprised of not less than 
50 percent cash and not more than 50 percent of in-
direct costs and in-kind contributions.
348
‘‘(2) RESTRICTION.—The matching amount de-
scribed in paragraph (1) shall not include—
‘‘(A) any indirect costs or in-kind contribu-
tions derived from any Federal program; and 
‘‘(B) any amount received under a contract 
described in subsection (g)(2). 
‘‘(j) FUNDING FORMULA.—
‘‘(1) IN GENERAL.—Subject to paragraph (3), the 
amount of funds to be made available to the grantee 
or grantees within a State under this subsection shall 
be equal to an amount determined in accordance with 
the following formula: 
‘‘(A) The annual amount made available 
for the Small Business Development Center Pro-
gram under section 20(a), less any reductions 
made for expenses authorized by paragraph (5), 
shall be divided on a pro rata basis, based on the 
percentage of the population of each State, as 
compared to the population of the United States. 
‘‘(B) If the pro rata amount calculated 
under subparagraph (A) for any State is less 
than the minimum funding level under para-
graph (3), the Administrator shall determine the 
aggregate amount necessary to achieve that min-
imum funding level for each such State.
349
‘‘(C) The aggregate amount calculated 
under subparagraph (B) shall be deducted from 
the amount calculated under subparagraph (A) 
for States eligible to receive more than the min-
imum funding level. The deductions shall be 
made on a pro rata basis, based on the popu-
lation of each such State, as compared to the 
total population of all such States. 
‘‘(D) The aggregate amount deducted under 
subparagraph (C) shall be added to the funds of 
those States that are not eligible to receive more 
than the minimum funding level in order to 
achieve the minimum funding level for each such 
State, except that the eligible amount of funds 
made available to any State under this sub-
section shall not be reduced to an amount below 
the minimum funding level. 
‘‘(2) FUNDS
AVAILABILITY
DETERMINATION.—
The amount of funds that one or more grantees with-
in a State are eligible to receive under this subsection 
shall be the amount determined under paragraph (1), 
subject to any modifications required under para-
graph (3), and shall be based on the amount available 
for the fiscal year in which performance of the grant 
commences, but not including amounts distributed in
350
accordance with paragraph (4). The amount of funds 
received by one or more grantees in any State under 
any provision of this subsection shall not exceed the 
amount of matching funds from sources other than the 
Federal Government, as required under subsection (i). 
‘‘(3) MINIMUM FUNDING LEVEL.—The amount of 
the minimum funding level for each State shall be de-
termined for each fiscal year based on the amount 
made available for that fiscal year to carry out this 
section, as follows: 
‘‘(A) If the amount made available is not 
less than $81,500,000 and not more than 
$90,000,000, the minimum funding level shall be 
$500,000. 
‘‘(B) If the amount made available is less 
than $81,500,000, the minimum funding level 
shall be the remainder of $500,000 minus a per-
centage of $500,000 equal to the percentage 
amount by which the amount made available is 
less than $81,500,000. 
‘‘(C) If the amount made available is more 
than $90,000,000, the minimum funding level 
shall be the sum of $500,000 plus a percentage 
of $500,000 equal to the percentage amount by
351
which the amount made available exceeds 
$90,000,000. 
‘‘(4) DISTRIBUTIONS.—Subject to paragraph (3), 
if one or more grantees within a State do not apply 
for, or use, their full funding eligibility for a fiscal 
year, the Administration shall distribute the remain-
ing funds as follows: 
‘‘(A) If the grant to any State is less than 
the amount received by that State in fiscal year 
2000, the Administrator shall distribute such re-
maining funds, on a pro rata basis, based on the 
percentage of shortage of each such State, as 
compared to the total amount of such remaining 
funds available, to the extent necessary in order 
to increase the amount of the grant to the 
amount received by that State in fiscal year 
2000, or until such funds are exhausted, which-
ever first occurs. 
‘‘(B) If any funds remain after the applica-
tion of subparagraph (A), the remaining amount 
may be distributed as supplemental funds to a 
grantee or grantees in any State, as the Admin-
istrator determines, in its discretion, to be ap-
propriate, after consultation with the association 
referred to in subsection (k).
352
‘‘(5) USE OF AMOUNTS.—Of the amounts made 
available in any fiscal year to carry out this section 
not more than $500,000 may be used by the Adminis-
trator to pay expenses enumerated in subparagraphs 
(B) through (D) of section 20(a)(1). 
‘‘(6) EXCLUSIONS.—Funds made available to one 
or more grantees within a State provided by the Ad-
ministrator or another Federal agency to carry out 
subsection (f)(4), (g)(2), (h), or (o) or for supple-
mental grants set forth in paragraph (4)(B), shall not 
be included in the calculation of maximum funding 
to be made available to one or more grantees within 
the State under paragraph (2). 
‘‘(7) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out 
this section $135,000,000 for fiscal year 2004 and 
$145,000,000 for fiscal year 2005. The authority to 
award grants under this section shall be in effect for 
each fiscal year only to the extent and in the amounts 
as are provided in advance in appropriations Acts. 
‘‘(k) FORMATION OF ASSOCIATION.—The grantees’ di-
rectors are authorized to form an association to pursue mat-
ters of common concern. If more than a majority of the 
grantees’ directors are members of such an association, the 
Administrator is authorized and directed to recognize the
353
existence and activities of such an association and to con-
sult with it and develop documents—
‘‘(1) announcing the annual scope of activities 
pursuant to this section; 
‘‘(2) requesting proposals to deliver assistance as 
provided in this section; and 
‘‘(3) governing the general operations and ad-
ministration of the Small Business Development Cen-
ter Program, specifically including the development of 
regulations and a uniform negotiated grant agree-
ment for use on an annual basis when entering into 
agreements with grantees. 
‘‘(l) PROGRAM EXAMINATION AND ACCREDITATION.—
‘‘(1) EXAMINATION.—The Administrator shall 
develop and implement a biennial programmatic and 
financial examination of each network of small busi-
ness development centers established pursuant to this 
section. The biennial examination shall be conducted 
by the Assistant Administrator for Small Business 
Development Centers. 
‘‘(2) ACCREDITATION.—The Administrator shall 
provide financial support, by contract or otherwise, to 
the association authorized by subsection (k) for the 
purpose of developing and implementing a small busi-
ness development center accreditation program.
354
‘‘(3) EXTENSION OR RENEWAL OF COOPERATIVE 
AGREEMENTS.—
‘‘(A) IN GENERAL.—In renewing a grant or 
cooperative agreement or contract of a grantee, 
the Administrator shall consider the results of 
the examination and accreditation program con-
ducted pursuant to paragraphs (1) and (2). 
‘‘(B) ACCREDITATION REQUIREMENT.—The 
Administrator may not renew any grant under 
this section unless the grantee’s small business 
development centers have been accredited under 
the program conducted pursuant to this sub-
section, except that the Assistant Administrator 
for Small Business Development Centers may 
waive such accreditation requirement if the As-
sistant Administrator determines that the grant-
ee is making a good faith effort to obtain accred-
itation for each of the grantee’s small business 
development centers. 
‘‘(m) SMALL BUSINESS DEVELOPMENT CENTER ADVI-
SORY BOARDS.—
‘‘(1) NATIONAL SMALL BUSINESS DEVELOPMENT 
CENTER ADVISORY BOARD.—
‘‘(A) ESTABLISHMENT.—There is estab-
lished a National Small Business Development
355
Center Advisory Board (herein referred to as 
‘Board’) which shall consist of nine members ap-
pointed from civilian life by the Administrator 
and who shall be persons of outstanding quali-
fications known to be familiar and sympathetic 
with small business needs and problems. No more 
than three members shall be from universities or 
their affiliates and six shall be from small busi-
ness concerns or associations representing small 
business concerns. At the time of the appoint-
ment of the Board, the Administrator shall des-
ignate one-third of the members and at least one 
from each category whose term shall end in two 
years from the date of appointment, a second 
third whose term shall end in three years from 
the date of appointment, and the final third 
whose term shall end in four years from the date 
of appointment. Succeeding Boards shall have 
three-year terms, with one-third of the Board 
changing each year. 
‘‘(B) OPERATION.—The Board shall elect a 
Chairman and advise, counsel, and confer with 
the Assistant Administrator for Small Business 
Development Centers in carrying out the duties 
described in this section. The Board shall meet at
356
least semiannually and at the call of the Chair-
man of the Board. Each member of the Board 
shall be entitled to be compensated at the rate 
not in excess of the per diem equivalent of the 
highest rate of pay for individuals occupying the 
position under GS–18 of the General Schedule 
for each day engaged in activities of the Board 
and shall be entitled to be reimbursed for ex-
penses as a member of the Board. 
‘‘(2) LOCAL
SMALL
BUSINESS
DEVELOPMENT 
CENTER ADVISORY BOARDS.—Each grantee’s director 
shall establish an advisory board for the grantee’s net-
work of small business development centers. The dis-
trict director shall have no authority to approve or 
disapprove the members of the advisory board selected 
by the grantee’s director. 
‘‘(n) ADMINISTRATION OF PROGRAM.—
‘‘(1) IN GENERAL.—Except as otherwise provided 
in this section, the program established by this section 
shall be administered by the Administrator, acting 
through the Assistant Administrator for Small Busi-
ness Development Centers with such oversight by the 
Associate Administrator for Enterprise Outreach and 
Training as the Administrator determines to be ap-
propriate.
357
‘‘(2) DUTIES OF ASSISTANT ADMINISTRATOR FOR 
SMALL BUSINESS DEVELOPMENT CENTERS.—The du-
ties of the Assistant Administrator for Small Business 
Development Centers shall include recommending the 
annual program budget, reviewing the annual budgets 
submitted by each grantee, establishing appropriate 
funding levels therefore, advising the Administrator 
on the selection of grantees to participate in the pro-
gram, implementing the provisions of this section, 
maintaining a clearinghouse to provide for the dis-
semination and exchange of information between 
grantees and their subcontractors and conducting au-
dits of recipients of grantees under this section. 
‘‘(3) CONSULTATION
REQUIREMENTS.—In car-
rying out the duties described in paragraph (2), the 
Assistant Administrator shall confer with and seek 
the advice of the advisory boards established pursuant 
to subsection (m) and the heads of the regional and 
district offices of the Administration. 
‘‘(o) ESTABLISHMENT OF INFORMATION SHARING SYS-
TEM.—
‘‘(1) IN GENERAL.—The Administrator, in con-
sultation with the grantees, their subcontractors, and 
the association authorized by this section shall develop
358
and implement an information sharing system. Such 
system shall—
‘‘(A) allow small business development cen-
ters to exchange information about their pro-
grams; 
‘‘(B) provide information central to tech-
nology transfer; and 
‘‘(C) provide information central to in-
creased utilization by United States businesses of 
sourcing their procurement requirements with 
small manufacturers. 
‘‘(2) GRANT
AUTHORITY.—The Administrator 
may make grants to one or more grantees to carry out 
the provisions of this subsection. Such grants shall be 
awarded for a period of not to exceed 5 years. The 
matching funds requirements of subsection (i) shall 
not be applicable to grants made under this sub-
section. 
‘‘(p) COOPERATION WITH FEDERAL SCIENCE RE-
SEARCH FACILITIES AND AGENCIES.—
‘‘(1) IN GENERAL.—Laboratories operated and 
funded by the Federal Government are authorized and 
directed to cooperate with the Administrator in devel-
oping and establishing programs to support small 
business development centers by making facilities and
359
equipment available; providing experiment station ca-
pabilities in adaptive engineering; providing library 
and technical information processing capabilities; 
and providing professional staff for consulting. The 
Administrator is authorized to reimburse the labora-
tories for such services. 
‘‘(2) NATIONAL SCIENCE FOUNDATION.—The Na-
tional Science Foundation is authorized and directed 
to cooperate with the Administrator in developing 
and establishing programs to support small business 
development centers. 
‘‘(3) NATIONAL AERONAUTICS AND SPACE AD-
MINISTRATION.—The National Aeronautics and Space 
Administration and regional technology transfer cen-
ters supported by the National Aeronautics and Space 
Administration are authorized and directed to cooper-
ate with grantees and their small business develop-
ment centers. 
‘‘(q) REGULATIONS.—In promulgating regulations to 
carry out this section, the Administration shall identify, 
and require grantee compliance with, the provisions in-
cluded in uniform requirements of Office of Management 
and Budget (OMB) Circulars which govern audits, cost 
principles and administrative requirements for Federal 
grants, and contracts and cooperative agreements.’’.
360
(b) CONFORMING AMENDMENT.—Paragraph (2) of sec-
tion 27(g) of the Small Business Act (15 U.S.C. 654(g)) 
is amended by striking ‘‘section 21(c)(3)(T)’’ and inserting 
‘‘section 21(f)(4)(T)’’. 
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
take effect on the date of the enactment of this Act. 
(2) GRANTS.—To the extent that the amendment 
made by subsection (a) applies with respect to grants, 
such amendment shall apply to grants made, renewed, 
or terminated after the date of the enactment of this 
Act. 
(d) TRANSITION RULES.—
(1) MULTIPLE GRANTEES REPLACED WITH SIN-
GLE GRANTEE.—In the case of a State which is served 
by two or more grantees under section 21 of the Small 
Business Act on the date of the enactment of this Act, 
the Administrator shall be required to select a new 
grantee for such State following the selection process 
set forth in such section (as in effect on the day after 
the date of the enactment of this Act) if the grantees 
serving such State on the date of the enactment of this 
Act were selected after January 1, 2002.
361
(2) SMALL BUSINESS DEVELOPMENT CENTER AD-
VISORY
BOARDS.—Each member of the National 
Small Business Development Center Advisory Board 
and each member serving on a local small business 
development center advisory board on the day before 
the date of the enactment of this Act shall continue 
to so serve until the end of such member’s term. 
SEC. 213. ASSIGNMENT OF EMPLOYEES OF THE OFFICE OF 
INTERNATIONAL TRADE. 
Section 22 of the Small Business Act (15 U.S.C. 649) 
is amended by adding at the end the following new sub-
section: 
‘‘(h) In carrying out this section, the Administrator 
shall ensure that the number of full-time equivalent employ-
ees of the Office assigned to the one-stop shops referred to 
in section 2301(b) of the Omnibus Trade and Competitive-
ness Act of 1988 (15 U.S.C. 4721(b)) is not less than the 
number of such employees so assigned on January 1, 
2003.’’. 
SEC. 214. SUPERVISORY AND ENFORCEMENT AUTHORITY 
FOR SMALL BUSINESS LENDING COMPANIES. 
Section 23 of the Small Business Act (15 U.S.C. 650) 
is amended to read as follows:
362
‘‘SEC. 23. SUPERVISORY AND ENFORCEMENT AUTHORITY 
FOR SMALL BUSINESS LENDING COMPANIES. 
‘‘(a) IN GENERAL.—The Administrator is author-
ized—
‘‘(1) to supervise the safety and soundness of 
small business lending companies and non-Federally 
regulated lenders; 
‘‘(2) with respect to small business lending com-
panies to set capital standards to regulate, to exam-
ine, and to enforce laws governing such companies, in 
accordance with the purposes of this Act; and 
‘‘(3) with respect to non-Federally regulated 
lenders to regulate, to examine, and to enforce laws 
governing the lending activities of such lenders under 
section 7(a) in accordance with the purposes of this 
Act. 
‘‘(b) CAPITAL DIRECTIVE.—The Administrator may 
determine that failure of a small business lending company 
to maintain capital at the minimum level established by 
the Administrator is an unsafe and unsound practice. In 
addition to any other action authorized by law, the Admin-
istrator may issue a directive to a small business lending 
company that does not comply with the minimum capital 
requirement requiring the small business lending company 
to increase capital to level established by the Administrator.
363
‘‘(c) CIVIL ACTION.—If a small business lending com-
pany violates this Act, the Administrator may institute a 
civil action in an appropriate district court to terminate 
the rights, privileges, and franchises of the company under 
this Act. 
‘‘(d) REVOCATION OR SUSPENSION OF LOAN AUTHOR-
ITY.—
‘‘(1) The Administrator may revoke or suspend 
the authority of a small business lending company or 
a non-Federally regulated lender to make, service or 
liquidate business loans authorized by section 7(a) of 
this Act—
‘‘(A) for false statements knowingly made in 
any written submission required under this Act; 
‘‘(B) for omission of a material fact from 
any written submission required under this Act; 
‘‘(C) for willful or repeated violation of this 
Act; 
‘‘(D) for willful or repeated violation of any 
condition imposed by the Administrator with re-
spect to any application, request, or agreement 
under this Act; or 
‘‘(E) for violation of any cease and desist 
order of the Administrator under this section.
364
‘‘(2) The Administrator may revoke or suspend 
authority under paragraph (1) only after a hearing 
under subsection (f). The Administrator may delegate 
power to revoke or suspend authority under para-
graph (1) only to the Deputy Administrator and only 
if the Administrator is unavailable to take such ac-
tion. 
‘‘(A) The Administrator, after finding ex-
traordinary circumstances and in order to pro-
tect the financial or legal position of the United 
States, may issue a suspension order without 
conducting a hearing pursuant to subsection (f). 
If the Administrator issues a suspension under 
the preceding sentence, the Administrator shall 
within two business days follow the procedures 
set forth in subsection (f). 
‘‘(B) Any suspension under paragraph (1) 
shall remain in effect until the Administrator 
makes a decision pursuant to subparagraph (4) 
to permanently revoke the authority of the small 
business lending company or non-Federally regu-
lated lender, suspend the authority for a time 
certain, or terminate the suspension. 
‘‘(3) The small business lending company or 
non-Federally regulated lender must notify borrowers
365
of a revocation and that a new entity has been ap-
pointed to service their loans. The Administrator or 
an employee of the Administration designated by the 
Administrator may provide such notice to the bor-
rower. 
‘‘(4) Any revocation or suspension under para-
graph (1) shall be made by the Administrator except 
that the Administrator shall delegate to an adminis-
trative law judge as that term is used in section 3105 
of title 5, United States Code the authority to conduct 
any hearing required under subsection (f). The Ad-
ministrator shall base the decision to revoke on the 
record of the hearing. 
‘‘(e) CEASE AND DESIST ORDER.—
‘‘(1) Where a small business lending company, a 
non-Federally regulated lender, or other person vio-
lates this Act or is engaging or is about to engage in 
any acts or practices which constitute or will con-
stitute a violation of this Act, the Administrator may 
order, after the opportunity for hearing pursuant to 
subsection (f), the company, lender, or other person to 
cease and desist from such action or failure to act. 
The Administrator may delegate the authority under 
the preceding sentence only to the Deputy Adminis-
366
trator and only if the Administrator is unavailable to 
take such action. 
‘‘(2) The Administrator, after finding extraor-
dinary circumstances and in order to protect the fi-
nancial or legal position of the United States, may 
issue a cease and desist order without conducting a 
hearing pursuant to subsection (f). If the Adminis-
trator issues a cease and desist order under the pre-
ceding sentence, the Administrator shall within two 
business days follow the procedures set forth in sub-
section (f). 
‘‘(3) The Administrator may further order such 
small business lending company or non-Federally reg-
ulated lender or other person to take such action or 
to refrain from such action as the Administrator 
deems necessary to insure compliance with this Act. 
‘‘(4) A cease and desist order under this sub-
section may also provide for the suspension of author-
ity to lend in subsection (d). 
‘‘(f) PROCEDURE FOR REVOCATION OR SUSPENSION OF 
LOAN AUTHORITY AND FOR CEASE AND DESIST ORDER.—
‘‘(1) Before revoking or suspending authority 
under subsection (d) or issuing a cease and desist 
order under subsection (e), the Administrator shall 
serve an order to show cause upon the small business
367
lending company, non-Federally regulated lender, or 
other person why an order revoking or suspending the 
authority or a cease and desist order should not be 
issued. The order to show cause shall contain a state-
ment of the matters of fact and law asserted by the 
Administrator and the legal authority and jurisdic-
tion under which a hearing is to be held, and shall 
set forth that a hearing will be held before an admin-
istrative law judge at a time and place stated in the 
order. Such hearing shall be conducted pursuant to 
the provisions of sections 554, 556, and 557 of title 
5, United States Code. If after hearing, or a waiver 
thereof, the Administrator determines that an order 
revoking or suspending the authority or a cease and 
desist order should be issued, the Administrator shall 
promptly issue such order, which shall include a 
statement of the findings of the Administrator and the 
grounds and reasons therefor and specify the effective 
date of the order, and shall cause the order to be 
served on the small business lending company, non-
Federally regulated lender, or other person involved.
‘‘(2) Witnesses summoned before the Adminis-
trator shall be paid by the party at whose instance 
they were called the same fees and mileage that are 
paid witnesses in the courts of the United States.
368
‘‘(3) A cease and desist order, suspension or rev-
ocation issued by the Administrator, after the hearing 
under this subsection is final agency action for pur-
poses of chapter 7 of title 5, United States Code. An 
adversely aggrieved party shall have 20 days from the 
date of issuance of the cease and desist order, suspen-
sion or revocation, to seek judicial review in an ap-
propriate district court. 
‘‘(g) REMOVAL OR SUSPENSION OF MANAGEMENT OF-
FICIAL.—
‘‘(1) DEFINITION.—In this section, the term 
‘management official’ means, with respect to a small 
business lending company or a non-Federally regu-
lated lender, an officer, director, general partner, 
manager, employee, agent, or other participant in the 
management of the affairs of the company’s or lend-
er’s activities under section 7(a) of this Act. 
‘‘(2) REMOVAL OF MANAGEMENT OFFICIAL.—
‘‘(A) NOTICE.—The Administrator may 
serve upon any management official a written 
notice of its intention to remove that manage-
ment official if, in the opinion of the Adminis-
trator, the management official—
‘‘(i) willfully and knowingly commits 
a substantial violation of—
369
‘‘(I) this Act; 
‘‘(II) any regulation issued under 
this Act; 
‘‘(III) a final cease-and-desist 
order under this Act; or 
‘‘(IV) any agreement by the man-
agement official, the small business 
lending company or non-Federally reg-
ulated lender under this Act; or 
‘‘(ii) willfully and knowingly commits 
a substantial breach of a fiduciary duty of 
that person as a management official and 
the violation or breach of fiduciary duty is 
one involving personal dishonesty on the 
part of such management official. 
‘‘(B) CONTENTS
OF
NOTICE.—A notice 
under subparagraph (A) shall contain a state-
ment of the facts constituting grounds therefor 
and shall fix a time and place at which a hear-
ing, conducted pursuant to sections 554, 556, 
and 557 of title 5, United States Code, will be 
held thereon. 
‘‘(C) HEARING.—
‘‘(i) TIMING.—A hearing under sub-
paragraph (B) shall be held not earlier than
370
30 days and later than 60 days after the 
date of service of notice of the hearing, un-
less an earlier or a later date is set by the 
Administrator at the request of—
‘‘(I) the management official, and 
for good cause shown; or 
‘‘(II) the Attorney General. 
‘‘(ii) CONSENT.—Unless the manage-
ment official appears at a hearing under 
this paragraph in person or by a duly au-
thorized representative, the management of-
ficial shall be deemed to have consented to 
the issuance of an order of removal under 
subparagraph (A). 
‘‘(D) ORDER OF REMOVAL.—
‘‘(i) IN GENERAL.—In the event of con-
sent under subparagraph (C)(ii), or if upon 
the record made at a hearing under this 
subsection, the Administrator finds that any 
of the grounds specified in the notice of re-
moval has been established, the Adminis-
trator may issue such orders of removal 
from office as the Administrator deems ap-
propriate.
371
‘‘(ii) 
EFFECTIVENESS.—An 
order 
under clause (i) shall—
‘‘(I) take effect 30 days after the 
date of service upon the subject small 
business lending company or non-Fed-
erally regulated lender and the man-
agement official concerned (except in 
the case of an order issued upon con-
sent as described in subparagraph 
(C)(ii), which shall become effective at 
the time specified in such order); and 
‘‘(II) remain effective and enforce-
able, except to such extent as it is 
stayed, modified, terminated, or set 
aside by action of the Administrator or 
a reviewing court in accordance with 
this section. 
‘‘(3) AUTHORITY TO SUSPEND OR PROHIBIT PAR-
TICIPATION.—
‘‘(A) IN GENERAL.—In order to protect a 
small business lending company, a non-Federally 
regulated lender or the interests of the Adminis-
tration or the United States, the Administrator 
may suspend from office or prohibit from further 
participation in any manner in the management
372
or conduct of the affairs of a small business lend-
ing company or a non-Federally regulated lender 
a management official by written notice to such 
effect served upon the management official. Such 
suspension or prohibition may prohibit the man-
agement official from making, servicing, review-
ing, approving, or liquidating any loan under 
section 7(a) of this Act.–
‘‘(B) EFFECTIVENESS.—A suspension or 
prohibition under subparagraph (A)—
‘‘(i) shall take effect upon service of no-
tice under paragraph (2); and 
‘‘(ii) unless stayed by a court in pro-
ceedings authorized by subparagraph (C), 
shall remain in effect—
‘‘(I) pending the completion of the 
administrative proceedings pursuant to 
a notice of intention to remove served 
under paragraph (2); and 
‘‘(II) until such time as the Ad-
ministrator dismisses the charges speci-
fied in the notice, or, if an order of re-
moval or prohibition is issued against 
the management official, until the ef-
fective date of any such order.
373
‘‘(C) JUDICIAL
REVIEW
OF
SUSPENSION 
PRIOR
TO
HEARING.—Not later than 10 days 
after a management official is suspended or pro-
hibited from participation under subparagraph 
(A), the management official may apply to an 
appropriate district court for a stay of the sus-
pension or prohibition pending the completion of 
the administrative proceedings pursuant to a no-
tice of intent to remove served upon the manage-
ment official under paragraph (2). 
‘‘(4) AUTHORITY
TO
SUSPEND
ON
CRIMINAL 
CHARGES.—
‘‘(A) IN GENERAL.—If a management offi-
cial is charged in any information, indictment, 
or complaint authorized by a United States at-
torney, with a felony involving dishonesty or 
breach of trust, the Administrator may, by writ-
ten notice served upon the management official, 
suspend the management official from office or 
prohibit the management official from further 
participation in any manner in the management 
or conduct of the affairs of the small business 
lending company or non-Federally regulated 
lender.
374
‘‘(B) EFFECTIVENESS.—A suspension or 
prohibition under subparagraph (A) shall re-
main in effect until the information, indictment, 
or complaint is finally disposed of, or until ter-
minated by the Administrator or upon an order 
of a district court. 
‘‘(C) AUTHORITY UPON CONVICTION.—If a 
judgment of conviction with respect to an offense 
described in subparagraph (A) is entered against 
a management official, then at such time as the 
judgment is not subject to further judicial review 
(and for purposes of this subparagraph shall not 
include any petition for a writ of habeas cor-
pus), the Administrator may issue and serve 
upon the management official an order removing 
the management official, effective upon service of 
a copy of the order upon the small business lend-
ing company or non-Federally regulated lender. 
‘‘(D) AUTHORITY
UPON
DISMISSAL
OR 
OTHER DISPOSITION.—A finding of not guilty or 
other disposition of charges described in subpara-
graph (A) shall not preclude the Administrator 
from instituting proceedings under subsection (e) 
or (f).
375
‘‘(5) NOTIFICATION TO SMALL BUSINESS LEND-
ING
COMPANY
OR
A
NON-FEDERALLY
REGULATED 
LENDER.—Copies of each notice required to be served 
on a management official under this section shall also 
be served upon the small business lending company or 
non-Federally regulated lender involved. 
‘‘(6) FINAL AGENCY ACTION AND JUDICIAL RE-
VIEW.—
‘‘(A) ISSUANCE OF ORDERS.—After a hear-
ing under this subsection, and not later than 30 
days after the Administrator notifies the parties 
that the case has been submitted for final deci-
sion, the Administrator shall render a decision 
in the matter (which shall include findings of 
fact upon which its decision is predicated), and 
shall issue and cause to be served upon each 
party to the proceeding an order or orders con-
sistent with this section. The decision of the Ad-
ministrator shall constitute final agency action 
for purposes of chapter 7 of title 5, United States 
Code. 
‘‘(B) JUDICIAL REVIEW.—An adversely ag-
grieved party shall have 20 days from the date 
of issuance of the order to seek judicial review in 
an appropriate district court.
376
‘‘(h) APPOINTMENT OF RECEIVER.—
‘‘(1) In any proceeding under subsection (f)(4) or 
subsection (g)(6)(C), the court may take exclusive ju-
risdiction of a small business lending company or a 
non-Federally regulated lender and appoint a receiver 
for assets of the company or lender. 
‘‘(2) Upon request of the Administrator, the 
court may appoint the Administrator as a receiver 
under paragraph (1). 
‘‘(i) POSSESSION OF ASSETS.—
‘‘(1) If a small business lending company or a 
non-Federally regulated lender is not in compliance 
with capital requirements or is insolvent, the Admin-
istrator may take possession of the portfolio of loans 
guaranteed by the Administrator and sell such loans 
to a third party by means of a receiver appointed 
under subsection (h). 
‘‘(2) If a small business lending company or a 
non-Federally regulated lender is not in compliance 
with capital requirements or is insolvent or otherwise 
operating in an unsafe and unsound condition, the 
Administrator may take possession of servicing ac-
tivities of loans that are guaranteed by the Adminis-
trator and sell such servicing rights to a third party
377
by means of a receiver appointed under subsection 
(h). 
‘‘(j) PENALTIES AND FORFEITURES.—
‘‘(1) Except as provided in paragraph (2), a 
small business lending company or a non-Federally 
regulated lender which violates any regulation or 
written directive issued by the Administrator regard-
ing the filing of any regular or special report shall 
pay to the United States a civil penalty of not more 
than $100 for each day of the continuance of the fail-
ure to file such report, unless it is shown that such 
failure is due to reasonable cause and not due to will-
ful neglect. The civil penalties under this subsection 
may be enforced in a civil action brought by the Ad-
ministrator. The penalties under this subsection shall 
not apply to any affiliate of a small business lending 
company that procures at least 10 percent of its an-
nual purchasing requirements from small manufac-
turers. 
‘‘(2) The Administration may by rules and regu-
lations that shall be codified in the Code of Federal 
Regulations, after an opportunity for notice and com-
ment, or upon application of an interested party, at 
any time previous to such failure, by order, after no-
tice and opportunity for hearing which shall be con-
378
ducted pursuant to sections 554, 556, and 557 of title 
5, United States Code, exempt in whole or in part, 
any small business lending company or non-Federally 
regulated lender from paragraph (1), upon such terms 
and conditions and for such period of time as it 
deems necessary and appropriate, if the Administra-
tion finds that such action is not inconsistent with 
the public interest or the protection of the Adminis-
tration. The Administration may for the purposes of 
this section make any alternative requirements appro-
priate to the situation.’’. 
SEC. 215. REAUTHORIZATION OF PAUL D. COVERDELL 
DRUG-FREE WORKPLACE PROGRAM. 
Paragraph (1) of section 27(g) of the Small Business 
Act (15 U.S.C. 654(g)) is amended by striking ‘‘$5,000,000 
for each of fiscal years 2001 through 2003’’ and inserting 
‘‘$2,000,000 for each of fiscal years 2003 through 2005’’. 
SEC. 216. WOMEN’S BUSINESS CENTER PROGRAM. 
Section 29 of the Small Business Act (15 U.S.C. 656) 
is amended to read as follows:
‘‘SEC. 29. WOMEN’S BUSINESS CENTER PROGRAM. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘private nonprofit organization’ 
means an entity that is described in section 501(c) of
379
the Internal Revenue Code of 1986 and exempt from 
taxation under section 501(a) of such Code. 
‘‘(2) The term ‘women’s business center site’ 
means the location of—
‘‘(A) a women’s business center; or 
‘‘(B) 1 or more women’s business centers, es-
tablished in conjunction with another women’s 
business center in another location within a 
State or region—
‘‘(i) that reach a distinct population 
that would otherwise not be served; 
‘‘(ii) whose services are targeted to 
women; and 
‘‘(iii) whose scope, function, and ac-
tivities are similar to those of the primary 
women’s business center or centers in con-
junction with which it was established. 
‘‘(b) AUTHORITY.—The Administrator may provide fi-
nancial assistance to private nonprofit organizations to 
conduct projects which will receive Federal funding for 5 
years and those that receive extensions for funding under 
the conditions set forth in this section for the benefit of 
small business concerns owned and controlled by women. 
The projects shall provide—
380
‘‘(1) financial assistance, including training and 
counseling in how to apply for and secure business 
credit and investment capital, preparing and pre-
senting financial statements, and managing cash flow 
and other financial operations of a business concern; 
‘‘(2) management assistance, including training 
and counseling in how to plan, organize, staff, direct, 
and control each major activity and function of a 
small business concern; and 
‘‘(3) marketing assistance, including training 
and counseling in identifying and segmenting domes-
tic and international market opportunities, preparing 
and executing marketing plans, developing pricing 
strategies, locating contract opportunities, negotiating 
contracts, and utilizing varying public relations and 
advertising techniques. 
‘‘(c) SUBMISSION OF 5-YEAR PLANS.—
‘‘(1) In response to solicitations made by the Ad-
ministrator requesting applications for grants to op-
erate women’s business centers, each applicant orga-
nization initially shall submit a 5-year plan to the 
Administrator detailing the budget required to pro-
vide the services set forth in subsection (b), the serv-
ices that will be provided, the target population, and
381
the proposed fundraising activities to meet the non-
Federal contributions mandated by this section. 
‘‘(2)(A) Notwithstanding any other provision of 
law, the Administrator may use such expedited meth-
ods of solicitation and award as the Administrator 
determines to be appropriate to carry out this section. 
‘‘(B) Any expedited procedures utilized by the 
Administrator shall ensure that all small business 
sources are provided a reasonable opportunity to sub-
mit applications. 
‘‘(d) CRITERIA.—The Administrator shall evaluate 
and rank applicants in accordance with predetermined se-
lection criteria that shall be stated in terms of relative im-
portance. Such criteria and their relative importance shall 
be made publicly available and stated in each solicitation 
for applications made by the Administrator. The criteria 
shall include—
‘‘(1) the experience of the applicant in con-
ducting programs or ongoing efforts designed to im-
part or upgrade the business skills of women business 
owners or potential owners; 
‘‘(2) the present ability of the applicant to com-
mence a project within a minimum amount of time; 
‘‘(3) the ability of the applicant to provide train-
ing and services to a representative number of women
382
who are both socially and economically disadvan-
taged; and 
‘‘(4) the location for the women’s business center 
site proposed by the applicant. 
‘‘(e) SELECTION
OF
GRANTEES.—Assuming other 
ranking factors to be equal, the Administrator shall make 
selection of grantees in the following order of preference: 
‘‘(1) The Administrator shall select from the ap-
plications those that demonstrate the greatest ability 
to serve women who are socially and economically 
disadvantaged whether located in standard metropoli-
tan statistical areas or rural areas and without re-
gard to the location of an existing center. 
‘‘(2) If, in the opinion of the Administrator, 2 
or more applicants have the same rank with respect 
to service of socially and economically disadvantaged 
women, the Administrator shall prefer the applicant 
that proposes to serve part of a State in a State that 
was served by a higher number of women’s business 
centers at any time in the last 5 years than the num-
ber of such centers that serve such State at the time 
of selection. 
‘‘(3) If no application has been received under 
which an award can be made pursuant to paragraph 
(2), the Administrator then shall select an applicant
383
that proposes to serve a standard metropolitan statis-
tical area that was served by a higher number of 
women’s business centers at any time in the last 5 
years than the number of such centers that serve such 
area at the time of selection. 
‘‘(f) ADMINISTRATOR FUNDING OF GRANTEES.—The 
Administrator, except as otherwise provided by subsection 
(m), shall provide funding according to the following for-
mula: 
‘‘(1) During the first and second years of oper-
ation, two dollars in Federal funds for each dollar in 
matching funds as required by subsection (g). 
‘‘(2) During the third, fourth, and fifth years, 
one dollar in Federal funds for each dollar in match-
ing funds as required by subsection (g). 
‘‘(3) The grant agreement shall provide for the 
mechanism of disbursement of Federal funds by the 
Administrator including payment in lump sum or 
installments, in advance, or by way of reimburse-
ment. The Administrator may disburse up to 25 per-
cent of each year’s Federal share to a grantee before 
the non-Federal sector matching funds are obtained. 
‘‘(4) If a grantee fails to obtain the required 
non-Federal contribution at any time during the life 
of the grant, such grantee shall not be eligible there-
384
after for advance disbursements pursuant to para-
graph (3) during the remainder of the term of the 
grant, or for any other women’s business center which 
it operates or for which it has applied to establish. 
‘‘(5) Prior to approving assistance to a grantee 
for any other projects, the Administrator shall specifi-
cally determine whether the Administrator believes 
that the grantee will be able to obtain the requisite 
non-Federal funding and enter a written finding set-
ting forth the reasons for making such determination. 
‘‘(6) The authority of the Administrator to pro-
vide funding pursuant to this section shall only be in 
effect for each fiscal year and only to the extent and 
in amounts as are provided for in advance of appro-
priations Acts. 
‘‘(g) MATCHING FUNDS.—
‘‘(1) Except as provided by subsection (n), each 
grantee, shall be required to obtain matching con-
tributions according to the formula set forth in sub-
section (f). 
‘‘(2) No more than one-half of such contributions 
may be in the form of in-kind contributions that are 
budget line items only, including office equipment 
and office space.
385
‘‘(3) The restriction in paragraph (2) shall 
apply to all grantees under this section. 
‘‘(h) CONTRACT AUTHORITY.—A women’s business 
center may enter into a contract with a Federal department 
or agency to provide specific assistance to women and other 
underserved small business concerns. Performance of such 
contract should not hinder the women’s business centers in 
carrying out the terms of the grant received by the women’s 
business centers from the Administrator. 
‘‘(i) ANNUAL PROGRAM EXAMINATION.—
‘‘(1) The Administrator shall—
‘‘(A) develop and implement an annual 
programmatic and financial examination of 
each women’s business center established pursu-
ant to this section, pursuant to which each such 
center shall provide to the Administrator—
‘‘(i) an itemized cost breakdown of ac-
tual expenditures for costs incurred during 
the preceding year; 
‘‘(ii) 
documentation 
regarding 
the 
amount of matching assistance from non-
Federal sources obtained and expended by 
the center during the preceding year in 
order to meet the requirements of subsection 
(g) and, with respect to any in-kind con-
386
tributions described in that subsection that 
were used to satisfy the matching require-
ments, verification of the existence and 
valuation of those contributions; and 
‘‘(iii) a review of the grantee’s success 
in fundraising plan and whether that needs 
revision to ensure that the grantee can sus-
tain operations after five years; and 
‘‘(B) analyze the results of each such exam-
ination and, based on that analysis, make a de-
termination regarding the programmatic and fi-
nancial viability of each women’s business cen-
ter. 
‘‘(2) In conducting such annual examination, the 
Administrator shall limit the total number of site vis-
its to a particular women’s business center to no more 
than 2 per year, unless the Administrator determines 
that extraordinary circumstances, as defined in regu-
lations promulgated by the Administrator, requires 
more than 2 such visits. 
‘‘(j) RENEWAL OF FUNDING AND TERMINATION.—
‘‘(1) On an annual basis, commencing with the 
end of the grantee’s second year of operation of a 
women’s business center, the Administrator, based on 
the program review made pursuant to subsection (i),
387
shall determine whether to continue funding the 
grantee according to the formula set forth in sub-
section (f). In determining whether to renew funding 
during any year of the life of the project operated by 
the grantee, the Administrator—
‘‘(A) shall consider the results of each an-
nual examination of the center under subsection 
(i); and 
‘‘(B) may withhold funding for the fol-
lowing year or years, if the Administrator deter-
mines that—
‘‘(i) the grantee has failed to provide 
for any women’s business center which it 
operates any information required to by the 
Administrator to perform the annual pro-
gram examination required under sub-
section (i), or the information is deemed to 
be inadequate to conduct the annual exam-
ination under subsection (i); 
‘‘(ii) the center has failed to provide 
any information required to be provided by 
the center for purposes of the report of the 
Administrator under subsection (l), or the 
information provided by the center is inad-
equate; or
388
‘‘(iii) the Administrator determines, 
pursuant to regulations adopted by the Ad-
ministrator and codified in the Code of Fed-
eral Regulations, that the grantee has failed 
to deliver the services required by subsection 
(b) taking into account current economic 
conditions and the target population served 
by the grantee. 
‘‘(2) The Administrator shall not require, as a 
condition of initial or continued funding, and a 
grant agreement shall not include a requirement that 
a women’s business center operated by the grantee 
serve a particular number of women with respect to 
loans under section 7 of this Act or title V of the 
Small Business Investment Act of 1958. 
‘‘(3) The Administrator shall not fund a grantee 
for the operation of a women’s business center that 
has been in operation for 5 years unless it applies for 
and receives an extension of Federal funding pursu-
ant to subsection (m) or the grantee reapplies as a 
new applicant pursuant to subsection (c) and the Ad-
ministrator selects the grantee pursuant to subsections 
(d) and (e). 
‘‘(4) If the Administrator makes a determination 
pursuant to subparagraph (1)(B)(iii), prior to the
389
withholding of any funds, the Administrator shall 
provide the grantee with a written notification of the 
reasons and shall provide the grantee with the oppor-
tunity for a hearing pursuant to sections 554, 556, 
and 557 of title 5, United States Code. 
‘‘(5) The Administrator shall make a final deci-
sion based on the record of the hearing and such deci-
sion shall be made within 60 days of the notification 
provided in paragraph (4). 
‘‘(k) MANAGEMENT REPORT.—
‘‘(1) The Administrator shall prepare and sub-
mit to the Committee on Small Business of the House 
of Representatives and the Committee on Small Busi-
ness and Entrepreneurship of the Senate a report on 
the effectiveness of all projects, including those oper-
ated pursuant to extensions of Federal funding, con-
ducted under this section. 
‘‘(2) Each report submitted under paragraph (1) 
shall include information concerning, with respect to 
each women’s business center established pursuant to 
this section—
‘‘(A) the number of individuals receiving 
assistance; 
‘‘(B) the number of startup business con-
cerns formed;
390
‘‘(C) the gross receipts of assisted concerns; 
‘‘(D) the employment increases or decreases 
of assisted concerns; 
‘‘(E) to the maximum extent practicable, 
increases or decreases in profits of assisted con-
cerns; 
‘‘(F) the number of hours of counseling and 
training provided and workshops conducted; and 
‘‘(G) the most recent analysis, as required 
under subsection (i)(1)(B), and the subsequent 
determination made by the Administrator under 
that subsection. 
‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) There is authorized to be appropriated—
‘‘(A) $ 16,000,000 for fiscal year 2004; and 
‘‘(B) $ 17,500,000 for fiscal year 2005. 
‘‘(2)(A) Except as provided in subparagraph 
(B), amounts made available under this subsection for 
each fiscal year, may only be used for grant awards 
and may not be used for costs incurred by the Admin-
istrator in connection with the management and ad-
ministration of the program under this section. 
‘‘(B) Of the amount made available under this 
subsection for a fiscal year, 1.75 percent shall be
391
available for costs associated with selection, moni-
toring, and oversight. 
‘‘(3)(A) Subject to subparagraph (B), 30.2 per-
cent of the funds authorized pursuant to this sub-
section shall be reserved to provide extensions of Fed-
eral funding to grantees that meet the standards set 
forth in subsection (m). 
‘‘(B) If the Administrator does not distribute all 
funds reserved for extensions of Federal funding pur-
suant to subsection (m), the Administrator shall uti-
lize the unawarded funds to grantees according to the 
priorities set forth in paragraphs (1), (2), and (3) of 
subsection (e). 
‘‘(m) EXTENSIONS OF FEDERAL FUNDING AFTER FIVE 
YEARS.—
‘‘(1) The Administrator is authorized to extend 
Federal funding to any grantee for 5 years after the 
term of the original grant ends. 
‘‘(2) In order to receive an extension of Federal 
funding, the grantee shall submit an application in 
the fourth year of its operation of a women’s business 
center and has met all of the criteria set by the Ad-
ministrator for continued funding in its fifth year. 
‘‘(n) SELECTION OF GRANTEES FOR EXTENSIONS OF 
FEDERAL FUNDING.—
392
‘‘(1) The Administrator shall review each appli-
cation submitted under paragraph (2) and select 
grantees for extensions of Federal funding who have—
‘‘(A) a demonstrated record of serving pre-
dominantly socially and economically disadvan-
taged women; and 
‘‘(B) are unable to meet their matching 
fund requirements due to their target popu-
lations. 
‘‘(2) If the Administrator does not receive any 
applications that meet the standards of subparagraph 
(A), the Administrator shall select grantees under this 
subsection according to the following preferences: 
‘‘(A) Those that meet the matching require-
ments in subsection (f)(2). 
‘‘(B) If there are no applicants that meet 
that standard in subparagraph (A) then based 
on criteria developed by the Administrator to 
rank applicants for extensions of Federal fund-
ing. 
‘‘(3) The Administrator shall maintain a copy of 
each application submitted under this subsection for 
not less than 10 years. 
‘‘(4) In awarding an extension of Federal fund-
ing, the Administrator may condition such award on
393
the grantee obtaining a match requirement at least 
equal to 2 non-Federal dollars for each dollar of Fed-
eral funding except that grantees meeting the stand-
ards of paragraph (1)(A) shall only be required to 
match each Federal dollar with a non-Federal dol-
lar.’’. 
SEC. 217. HUBZONE PROGRAM. 
Section 31 of the Small Business Act (15 U.S.C. 657a) 
is amended to read as follows: 
‘‘SEC. 31. HUBZONE PROGRAM. 
‘‘(a) IN GENERAL.—There is established within the 
Administration a program to be carried out by the Admin-
istrator to provide for Federal contracting assistance to 
qualified HUBZone small business concerns in accordance 
with this section. 
‘‘(b) ELIGIBLE CONTRACTS.—
‘‘(1) AUTHORITY OF CONTRACTING OFFICER.—
‘‘(A) A contracting officer may award sole 
source contracts under this section to any quali-
fied HUBZone small business concern, if—
‘‘(i) the qualified HUBZone small 
business concern is determined to be a re-
sponsible contractor with respect to per-
formance of such contract opportunity, and 
the contracting officer does not have a rea-
394
sonable expectation that 2 or more qualified 
HUBZone small business concerns will sub-
mit offers for the contracting opportunity; 
‘‘(ii) the anticipated award price of the 
contract (including options) will not ex-
ceed—
‘‘(I) $5,000,000, in the case of a 
contract opportunity assigned a stand-
ard industrial classification code for 
manufacturing; or 
‘‘(II) $3,000,000, in the case of all 
other contract opportunities; and 
‘‘(iii) in the estimation of the con-
tracting officer, the contract award can be 
made at a fair and reasonable price. 
‘‘(B) A contract opportunity may be award-
ed pursuant to this section on the basis of com-
petition restricted to qualified HUBZone small 
business concerns if the contracting officer has a 
reasonable expectation that not less than 2 quali-
fied HUBZone small business concerns will sub-
mit offers and that the award can be made at a 
fair market price. 
‘‘(2) PRICE EVALUATION PREFERENCE IN FULL 
AND OPEN COMPETITIONS.—
395
‘‘(A) IN GENERAL.—In any case in which a 
contract is to be awarded on the basis of full and 
open competition, the price offered by a qualified 
HUBZone small business concern shall be 
deemed as being lower than the price offered by 
another offeror (other than another small busi-
ness concern), if the price offered by the qualified 
HUBZone small business concern is not more 
than 10 percent higher than the price offered by 
the otherwise lowest, responsive, and responsible 
offeror. 
‘‘(B) FULL AND OPEN COMPETITION.—For 
purposes of this paragraph, the term ‘full and 
open competition’ has the meaning given that 
term in section 4 of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 403). 
‘‘(3) RELATIONSHIP
TO
OTHER
CONTRACTING 
PREFERENCES.—A procurement may not be made 
from a source on the basis of a preference provided in 
paragraph (1) or (2), if the procurement would other-
wise be made from a different source under section 
4124 or 4125 of title 18, United States Code, or the 
Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). 
‘‘(c) ENFORCEMENT; PENALTIES.—
396
‘‘(1) VERIFICATION
OF
ELIGIBILITY.—In car-
rying out this section, the Administrator shall estab-
lish procedures relating to—
‘‘(A) the filing, investigation, and disposi-
tion by the Administration of any challenge to 
the eligibility of a small business concern to re-
ceive assistance under this section (including a 
challenge, filed by an interested party, relating 
to the veracity of a certification made or infor-
mation provided to the Administration by a 
small business concern under section 3(p)(5); 
and 
‘‘(B) verification by the Administrator of 
the accuracy of any certification made or infor-
mation provided to the Administration by a 
small business concern under section 3(p)(5). 
‘‘(2) EXAMINATIONS.—The procedures established 
under paragraph (1) may provide for program ex-
aminations (including random program examina-
tions) by the Administrator of any small business 
concern making a certification or providing informa-
tion to the Administrator under section 3(p)(5). 
‘‘(3) PROVISION OF DATA.—Upon the request of 
the Administrator, the Secretary of Labor, the Sec-
retary of Housing and Urban Development, and the
397
Secretary of the Interior (or the Assistant Secretary 
for Indian Affairs), shall promptly provide to the Ad-
ministrator such information as the Administrator 
determines to be necessary to carry out this sub-
section. 
‘‘(4) PENALTIES.—In addition to the penalties 
described in section 16(d), any small business concern 
that is determined by the Administrator to have mis-
represented the status of that concern as a ‘HUBZone 
small business concern’ for purposes of this section, 
shall be subject to—
‘‘(A) section 1001 of title 18, United States 
Code; and 
‘‘(B) sections 3729 through 3733 of title 31, 
United States Code. 
‘‘(d) LIST
OF QUALIFIED SMALL BUSINESS CON-
CERNS.—The Administrator shall establish and maintain 
a list of qualified HUBZone small business concerns, which 
list shall, to the extent practicable—
‘‘(1) once the Administrator has made the certifi-
cation required by subsection 3(p)(5)(A)(i) of this Act 
regarding a qualified HUBZone small business con-
cern and has determined that subsection 3(p)(5)(B) 
does not apply to that concern, include the name, ad-
398
dress, and type of business with respect to each such 
small business concern; 
‘‘(2) be updated by the Administrator not less 
than annually; and 
‘‘(3) be provided upon request to any Federal 
agency or other entity. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out the program es-
tablished by this section $5,000,000 for each of fiscal years 
2004 through 2005.’’. 
SEC. 218. OTHER REPEALS AND REORGANIZATIONS. 
(a) SEVERABILITY CLAUSE MOVED TO END OF SMALL 
BUSINESS ACT.—Section 36 of the Small Business Act is 
amended to read as follows: 
‘‘SEC. 36. SEVERABILITY. 
‘‘If any provision of this Act, or the application thereof 
to any person or circumstances, is held invalid, the remain-
der of this Act, and the application of such provision to 
other persons or circumstances, shall not be affected there-
by.’’. 
(b) REPEALS.—
(1) Section 19 of the Small Business Act (15 
U.S.C. 631 note) is amended to read as follows:
399
‘‘SEC. 19. [RESERVED].’’. 
(2) Section 24 of the Small Business Act (15 
U.S.C. 651) is amended to read as follows: 
‘‘SEC. 24. [RESERVED].’’. 
(3) Section 25 of the Small Business Act (15 
U.S.C. 652) is amended to read as follows: 
‘‘SEC. 25. [RESERVED].’’. 
(4) Section 26 of the Small Business Act (15 
U.S.C. 653) is amended to read as follows: 
‘‘SEC. 26. [RESERVED].’’. 
(5) Section 28 of the Small Business Act (15 
U.S.C. 655) is amended to read as follows: 
‘‘SEC. 28. [RESERVED].’’. 
SEC. 219. RULES OF CONSTRUCTION. 
(a) REFERENCES.—A reference to a provision of law 
replaced by this title, including a reference in a regulation, 
rule, order, or other law, is deemed to refer to the cor-
responding provision enacted by this Act. 
(b) CONTINUING EFFECT.—Unless otherwise provided 
in this Act or in an amendment made by this Act, any 
regulation, rule, or order in effect under a provision of law 
replaced by this title shall continue in effect under the cor-
responding provision enacted by this title until repealed, 
amended, or superseded. 
(c) INFERENCES OF REPEAL.—The repeal of a provi-
sion of law by this title shall not be construed as a legisla-
400
tive inference that the provision was or was not in effect 
before its repeal. 
TITLE III—OTHER PROVISIONS 
SEC. 301. REPORT REGARDING NATIONAL DATABASE OF 
SMALL MANUFACTURERS. 
(a) STUDY AND REPORT.—The Administrator, in con-
sultation with the association of small business development 
centers authorized by section 21(k) of the Small Business 
Act, shall—
(1) study the feasibility of creating a national 
database of small manufacturers that institutions of 
higher education could access for purposes of meeting 
procurement needs; and 
(2) not later than one year after the date of the 
enactment of this Act, transmit a report to the Con-
gress regarding the findings and conclusions of such 
study. 
(b) COST ESTIMATE.—The report referred to in sub-
section (a)(2) shall include an estimate of the cost of cre-
ating and maintaining the database described in subsection 
(a). 
SEC. 302. WORKFORCE TRANSFORMATION PLAN. 
(a) REORGANIZATION.—The Administrator shall, to 
the extent permitted by law, reorganize the structure of the 
Administration and reassign employees in order to—
401
(1) increase outreach to small business concerns; 
(2) improve coordination with Federal con-
tracting officers in an effort to increase prime con-
tract awards to small business concerns; 
(3) enable small business concerns to obtain bet-
ter access to capital; 
(4) expand assistance provided to small manu-
facturers; and 
(5) meet goals in this section and the Small 
Business Act for procurement center representatives 
and commercial market representatives. 
(b) REQUIRED COST SAVINGS.—In carrying out sub-
section (a), the Administrator shall achieve a 1 percent sav-
ings in the overall cost of operating the agency. 
(c) INCREASED NUMBER OF PROCUREMENT CENTER 
REPRESENTATIVES
AND COMMERCIAL MARKETING REP-
RESENTATIVES.—In carrying out subsection (a), the Ad-
ministrator shall ensure—
(1) that the following number of procurement 
center representatives are employed by the Adminis-
tration: 
(A) 75 by September 30, 2004; and 
(B) 100 by September 30, 2005; and
402
(2) that the following number of commercial 
marketing representatives are employed by the Ad-
ministration: 
(A) 25 by September 30, 2004; and 
(B) 50 by September 30, 2005. 
(d) AUTHORIZATION OF APPROPRIATIONS.—There are 
authorized to be appropriated such sums as may be nec-
essary to carry out this section. 
(e) REPORT TO CONGRESS.—Not later than 1 year 
after the date of the enactment of this Act, the Adminis-
trator shall transmit a report to the Congress describing 
the steps taken by the Administrator to carry out this sec-
tion. Such report shall contain—
(1) a detailed analysis of how the transformation 
has—
(A) increased contact with small business 
concerns; 
(B) expanded dollar financings to small 
business concerns; 
(C) increased the total number of prime and 
subcontracting dollars awarded to small business 
concerns, including increases in each contracting 
program established pursuant to sections 8 and 
15 of this Act; and
403
(D) increased assistance provided to small 
manufacturers; and 
(2) the Administrator’s assessment of further ac-
tions needed to transform the workforce to meet the 
objectives described in paragraph (1). 
SEC. 303. REPEAL OF CERTAIN PROVISIONS OF THE DIS-
ASTER RELIEF ACT OF 1970. 
(a) IN GENERAL.—Section 237 of the Disaster Relief 
Act of 1970 (15 U.S.C. 636d) is hereby repealed. 
(b) NO EFFECT ON OUTSTANDING LOANS.—The repeal 
made by this section shall not affect any loan made before 
the date of the enactment of this Act. 
SEC. 
304. 
REGULATIONS 
ON 
SIZE 
STANDARDS 
OF 
FRANCHISEES. 
(a) PROMULGATION.—Not later than 180 days after 
the date of the enactment of this Act, the Administrator 
shall repeal section 121.103(g) of title 13, Code of Federal 
Regulations (as in effect on the date of the enactment of 
this Act) and promulgate a new regulation, after oppor-
tunity for notice and comment, taking into account whether 
the franchisee or licensee—
(1) retains the majority of its profits but not less 
than 51 percent; 
(2) bears the burdens of its losses;
404
(3) shares no common ownership or management 
personnel with the franchisor or licensor; 
(4) maintains daily control of its operations in-
cluding determining who its customers will be; and 
(5) is subject to excessive restrictions on the sale 
of its business given the interest of the franchisor or 
licensor in protecting the goodwill of its trademarks, 
tradenames, or service marks. 
(b) FAILURE TO PROMULGATE NEW STANDARD.—If 
the Administrator fails to comply with subsection (a), any 
franchisee or licensee shall be treated as small for purposes 
of the Small Business Act until the Administrator has 
issued a final regulation as required under subsection (a). 
SEC. 305. TEMPORARY SMALL BUSINESS DEVELOPMENT 
CENTER ASSISTANCE TO INDIAN TRIBE MEM-
BERS, NATIVE ALASKANS, AND NATIVE HA-
WAIIANS. 
(a) IN GENERAL.—The Administrator of the Small 
Business Administration may award a grant under this 
section to any grantee under section 21 of the Small Busi-
ness Act. A grant under this section shall be used solely 
to provide services described in section 21(f)(4) of the Small 
Business Act to assist with outreach, development, and en-
hancement on Indian lands of small business startups and
405
expansions owned by Indian tribe members, Native Alas-
kans, and Native Hawaiians. 
(b) LIMITATION.—A grant shall not be made to a 
grantee under this section unless the area served by such 
grantee has a combined population of Indian tribe mem-
bers, Natives Alaskans, and Native Hawaiians that com-
prises at least 1 percent of the area’s total population, as 
shown by the latest available census. 
(c) GRANT APPLICATIONS.—An applicant for a grant 
under this section shall submit to the Administrator an ap-
plication that is in such form as the Administrator may 
require. The application shall include information regard-
ing the applicant’s goals and objectives for the services to 
be provided using the grant, including—
(1) the capability of the applicant to provide 
training and services to Indian tribe members, Native 
Alaskans, and Native Hawaiians; 
(2) the locations of the small business develop-
ment centers that would provide the assistance de-
scribed in subsection (a); 
(3) the required amount of grant funding needed 
by the applicant to implement the program; and 
(4) the extent to which the applicant has con-
sulted with local tribal councils.
406
(d) APPLICABILITY OF GRANT REQUIREMENTS.—An 
applicant for a grant under this section shall comply with 
all of the requirements applicable to a grantee under section 
21 of the Small Business Act, except that the matching 
funds requirements of subsection (i) of such section shall 
not apply. 
(e) MAXIMUM AMOUNT OF GRANTS.—A grantee shall 
not receive more than $300,000 in grants under this section 
in a fiscal year. 
(f) ADVICE OF LOCAL TRIBAL COUNSELS.—A grantee 
under this section shall request the advice of local tribal 
councils regarding how best to provide assistance to Indian 
tribe members, Native Alaskans, and Native Hawaiians 
and where to locate centers to provide such assistance. 
(g) REGULATIONS.—After providing notice and an op-
portunity for comment and after consulting with the asso-
ciation recognized by the Administrator under section 21(k) 
of the Small Business Act (but not later than 180 days after 
the date of the enactment of this Act), the Administrator 
shall issue final regulations to carry out this section, in-
cluding regulations that establish—
(1) standards relating to educational, technical, 
and support services to be provided by grantees under 
this section; and
407
(2) standards relating to any work plan that the 
Administrator may require a grantee under this sec-
tion to develop. 
(h) DEFINITIONS.—For purposes of this section: 
(1) INDIAN LANDS.—The term ‘‘Indian lands’’ 
has the meaning given the term ‘‘Indian country’’ in 
section 1151 of title 18, United States Code, the 
meaning given the term ‘‘Indian reservation’’ in sec-
tion 151.2 of title 25, Code of Federal Regulations (as 
in effect on the date of the enactment of this Act), and 
the meaning given the term ‘‘reservation’’ in section 
4 of the Indian Child Welfare Act of 1978 (25 U.S.C. 
1903). 
(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has 
the meaning given such term in section 4(e) of the In-
dian Self-Determination and Education Assistance 
Act. 
(3) INDIAN TRIBE MEMBER.—The term ‘‘Indian 
tribe member’’ means a member of an Indian tribe 
(other than a Native Alaskan). 
(4) NATIVE ALASKAN.—The term ‘‘Native Alas-
kan’’ has the meaning given the term ‘‘Native’’ in sec-
tion 3(b) of the Alaska Native Claims Settlement Act 
(43 U.S.C. 1602(b)).
408
(5) NATIVE HAWAIIAN.—The term ‘‘Native Ha-
waiian’’ means any individual who is a descendant 
of the aboriginal people who, prior to 1778, occupied 
and exercised sovereignty in the area that now con-
stitutes the State of Hawaii. 
(i) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$7,000,000 for each of fiscal years 2004 through 2006. 
(j) NONAPPLICABILITY OF CERTAIN LIMITATIONS.—
Funding under this section shall not be taken into account 
under subsections (h), (i), and (j) of section 21 of the Small 
Business Act. 
(k) LIMITATION ON USE OF FUNDS.—The Adminis-
trator may carry out this section only with amounts appro-
priated specifically to carry out this section. 
(l) EVALUATION OF PROGRAM.—Not later than March 
31, 2006, the Administrator shall transmit to the Congress 
a report containing an evaluation of the grant program 
carried out under this section. 
SEC. 306. TEMPORARY SMALL BUSINESS DEVELOPMENT 
CENTER ASSISTANCE FOR VOCATIONAL AND 
TECHNICAL ENTREPRENEURSHIP DEVELOP-
MENT. 
(a) IN GENERAL.—The Administrator may award a 
grant under this section to any grantee under section 21
409
of the Small Business Act. A grant under this section shall 
be used solely to provide, on a statewide basis, technical 
assistance to secondary schools, or to postsecondary voca-
tional or technical schools, for the development and imple-
mentation of curricula designed to promote vocational and 
technical entrepreneurship. 
(b) MINIMUM GRANT.—The Administrator shall not 
make a grant under this section in an amount less than 
$200,000. 
(c) APPLICATION.—Each applicant for a grant under 
this section shall submit to the Administrator an applica-
tion in such form as the Administrator may require. The 
application shall include information regarding the appli-
cant’s goals and objectives for the educational programs to 
be assisted. 
(d) REPORT TO ADMINISTRATOR.—The Administrator 
shall make a condition of each grant under the program 
that not later than 18 months after the receipt of the grant 
the grantee shall transmit to the Administrator a report 
describing how the grant funds were used. 
(e) COOPERATIVE AGREEMENTS AND CONTRACTS.—
The Administrator may enter into a cooperative agreement 
or contract with any grantee under this section to provide 
additional assistance that furthers the purposes of this sec-
tion.
410
(f) APPLICABILITY OF GRANT REQUIREMENTS.—An 
applicant for a grant under this section shall comply with 
all of the requirements applicable to a grantee under section 
21 of the Small Business Act, except that the matching 
funds requirements of subsection (i) of such section shall 
not apply. 
(g) EVALUATION OF PROGRAM.—Not later than March 
31, 2006, the Administrator shall transmit to the Congress 
a report containing an evaluation of the grant program 
carried out under this section. 
(h) CLEARINGHOUSE.—The association recognized by 
the Administrator under section 21(k) of the Small Business 
Act shall act as a clearinghouse of information and exper-
tise regarding vocational and technical entrepreneurship 
education programs. In each fiscal year in which grants 
are made under the program, the Administrator shall pro-
vide additional assistance to such association to carry out 
the functions described in this subsection. 
(i) AUTHORIZATION OF APPROPRIATIONS.—There are 
authorized to be appropriated to carry out this section 
$7,000,000 for each of fiscal years 2004, 2005, and 2006. 
(j) NONAPPLICABILITY OF CERTAIN LIMITATIONS.—
Funding under this section shall not be taken into account 
under subsections (h), (i), and (j) of section 21 of the Small 
Business Act.
411
(k) LIMITATION ON USE OF FUNDS.—The Adminis-
trator may carry out this section only with amounts appro-
priated specifically to carry out this section. 
SEC. 307. VERY SMALL BUSINESS CONCERN CONTRACT 
DATA COLLECTION. 
The Administrator and the Administrator of General 
Services, acting jointly, shall create, within the data collec-
tion capabilities of the Federal Procurement Data System, 
a data element that identifies contract awards to very small 
business concerns, under section 15(t) of the Small Business 
Act. In carrying out the preceding sentence, the Adminis-
trators shall ensure that the data element is in use by all 
Federal entities with respect to such awards not later than 
90 days after the date of the enactment of this Act. 
SEC. 308. VERY SMALL BUSINESS CONCERN PILOT PRO-
GRAM FOR COMPETITION AWARD TO HOME-
BASED BUSINESS. 
(a) IN GENERAL.—The Administrator shall establish 
a pilot program that ensures that at least one award to 
a very small business concern resulting from competition 
under section 15(t)(2)(C) of the Small Business Act is made 
to a home-based business. 
(b) DEFINITION.—As used in this section, the term 
‘‘home-based business’’ means a small business, the head-
412
quarters, main office, and records of which are located at 
the primary residence of the majority owner. 
(c) TERM OF PILOT PROGRAM.—The pilot program 
shall begin not later than 90 days after the date of the en-
actment of this Act and shall end on September 30, 2007. 
SEC. 309. SOCIALLY AND ECONOMICALLY DISADVANTAGED 
BUSINESS. 
Section 7102(c) of the Federal Acquisition Stream-
lining Act of 1994 (Public Law 103–355; 15 U.S.C. 644 
note) is amended by striking ‘‘September 30, 2003’’ and in-
serting ‘‘September 30, 2005’’. 
SEC. 310. STUDY AND REPORT ON EFFECTIVENESS OF AG-
GREGATE LIMITATIONS ON AMOUNT OF AS-
SISTANCE TO ANY SINGLE ENTERPRISE. 
(a) STUDY.—The Administrator shall conduct a study 
of whether the aggregate amount limitation under section 
306(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 686(a)) is an impediment to investment in small 
manufacturers. In conducting the study, the Administrator 
shall consult licensees and small manufacturers. 
(b) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Administrator shall report 
the results of the study to the Committee on Small Business 
of the House of Representatives and the Committee on 
Small Business and Entrepreneurship of the Senate.
413
SEC. 311. STUDY AND REPORT ON COORDINATION OF NEW 
MARKETS VENTURE CAPITAL PROGRAM WITH 
NEW MARKETS TAX CREDIT PROGRAM. 
(a) IN GENERAL.—The Administrator shall conduct a 
study to identify an approach to better coordinate the ad-
ministration of the New Markets Venture Capital Program 
under part B of title III of the Small Business Investment 
Act of 1958 (15 U.S.C. 689 et seq.) with the New Markets 
Tax Credit under section 45D of the Internal Revenue Code 
of 1986. 
(b) REPORT.—Not later than 90 days after the date 
of the enactment of this Act, the Administrator shall report 
the results of the study to the Committee on Small Business 
of the House of Representatives and the Committee on 
Small Business and Entrepreneurship of the Senate. 
SEC. 312. STUDY AND REPORT ON PREMIER CERTIFIED 
LENDERS PROGRAM. 
(a) IN GENERAL.—The Administrator shall enter into 
a contract with a Federal agency experienced in community 
development lending and financial regulation or with a 
member of the Federal Financial Institutions Examina-
tions Council to conduct a study and prepare a report re-
garding—
(1) the extent to which statutory requirements 
have caused overcapitalization in the loss reserves 
maintained by certified development companies par-
414
ticipating in the Premier Certified Lenders Program 
under section 508 of the Small Business Investment 
Act of 1958 (15 U.S.C. 697e); and 
(2) alternatives for establishing and maintaining 
loss reserves that are sufficient to protect the Govern-
ment from the risk of loss associated with loans guar-
anteed under that Program. 
(b) TRANSMISSION OF REPORT.—Not later than 180 
days after the date of the enactment of this Act, the Admin-
istrator shall transmit the report to the Committee on Small 
Business of the House of Representatives and the Committee 
on Small Business and Entrepreneurship of the Senate. 
(c) LIMITATION.—The amount of the contract under 
subsection (a) shall not exceed $75,000. 
SEC. 313. DATA COLLECTION CAPABILITIES.
The Administrator shall work with the Administrator 
of General Services to establish within the data collection 
capabilities of the Federal Procurement Data System a 
data element capable of identifying contract awards made 
as a result of section 7102(c) of the Federal Acquisition 
Streamlining Act of 1994 (Public Law 103–355; 15 U.S.C. 
644 note). Such data element shall be established and popu-
lated by Federal agencies awarding contracts as a result 
of section 7102(c) of the Federal Acquisition Streamlining
415
Act of 1994 (Public Law 103–355; 15 U.S.C. 644 note) 
within 90 days of the date of the enactment of this Act.
SEC. 314. RESUBMISSION OF DISASTER LOAN APPLICA-
TIONS FOR BUSINESSES AFFECTED BY SEP-
TEMBER 11, 2001, TERRORIST ATTACKS. 
(a) RESUBMISSION OF APPLICATIONS.—Until 90 days 
after the date of the enactment of this Act, a small business 
concern may resubmit an application for a loan under sec-
tion 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) 
may be resubmitted if the following conditions are met: 
(1) ORIGINAL APPLICATION.—The small business 
concern submitted the original application in re-
sponse to an injury due, in whole or in part, to the 
terrorist attacks of September 11, 2001 in New York, 
New York or Arlington, Virginia. 
(2) LOCATION.—On September 11, 2001, and on 
the date of the resubmission, a facility of the small 
business concern is located in any of the following: 
(A) Bronx, Kings, Nassau, New York, 
Queens, Richmond, or Westchester county in New 
York. 
(B) Bergen, Hudson, Middlesex, or Union 
county in New Jersey. 
(C) Arlington or Fairfax county or the city 
of Alexandria in Virginia.
416
(D) The District of Columbia. 
(E) Montgomery county in Maryland. 
(3) INABILITY TO OPERATE.—Without regard to 
physical damage to a facility, the applicant was un-
able to operate at a facility referred to in paragraph 
(2) because of—
(A) use of the facility, in whole or in part, 
for any purpose, by or on behalf of, Federal, 
State, or local authorities for more than 20 days, 
beginning on or after September 11, 2001; or 
(B) prohibition of use of the facility, in 
whole or in part, by an order of a Federal agen-
cy for more than 20 days, beginning on or after 
September 11, 2001. 
(b) STANDARDS FOR APPROVAL.—The Administrator 
shall approve a loan with respect to an application resub-
mitted under subsection (a), if the applicant has a ratio 
of net operating income to debt service of not less than 1.15. 
In calculating the ratio, the Administrator shall exclude 
any Federal or State tax lien or obligation. 
(c) SPECIAL RULE.—The Administrator shall resolve 
any reasonable doubt of likelihood of repayment of an ap-
plication resubmitted under subsection (a) in favor of the 
applicant.
417
SEC. 315. NATIONAL SMALL BUSINESS INCUBATOR PRO-
GRAM. 
(a) PURPOSE.—It is the purpose of the National Small 
Business Incubator Program to: 
(1) Promote economic development and the cre-
ation of wealth and job opportunity in low-income ge-
ographic areas and parts of the country with declin-
ing manufacturing bases and among individuals liv-
ing in such areas through business incubation centers. 
(2) Develop a business incubation program with 
the mission of providing focused assistance to aid in 
the development of small businesses. 
(3) Make grants to economic development organi-
zations and other entities for the purpose of providing 
business incubation services to small businesses. 
(4) Revitalize and reuse industrial sites for eco-
nomic growth. 
(b) GRANT PROGRAM.—
(1) IN GENERAL.—In accordance with the re-
quirements of this subsection, the Administrator may 
make a 5-year grant to each of 10 eligible organiza-
tions to establish and operate a small business incu-
bator program. 
(2) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an eligible organization 
shall submit an application to the Administrator at
418
such time and in such form and manner as the Ad-
ministrator may require. Each such application shall 
include the grantee’s plan for establishing and oper-
ating a small business incubator program. 
(3) SELECTION OF GRANTEES.—In selecting the 
10 grantees under this subsection, the Administrator 
shall evaluate and rank applicants in accordance 
with predetermined selection criteria that will be stat-
ed in terms of relevant importance of such criteria. 
The relative importance of the criteria shall be made 
publicly available and stated in each solicitation for 
applicants made by the Administrator. The criteria 
shall include the following: 
(A) The experience of the applicant in con-
ducting business development. 
(B) The experience of the applicant in tech-
nology and manufacturing. 
(C) The extent to which the incubator will 
assist in the development of low-income, women, 
or minority business, or the revitalization of de-
pressed manufacturing areas. 
(D) The extent to which the proposed site is 
in an area of high unemployment and will result 
in the reuse of a previously used industrial site.
419
(E) The extent to which the applicant has 
a management team in place with experience in 
running a business incubator or relevant busi-
ness development experience. 
(F) The extent to which the applicant’s plan 
will result in the economic development of low-
income 
communities 
or 
high-unemployment 
areas. 
(G) The ability of the applicant to success-
fully establish and operate a small business incu-
bator program. 
(H) The ability of the applicant to enter 
into cooperative agreements with lending institu-
tions to provide a streamlined process for busi-
ness concerns utilizing the small business incu-
bator program to obtain financial assistance, in-
cluding loans under subsection (c). 
(I) The ability of the applicant to provide 
the services of licensed professionals. 
(J) The extent to which the applicant’s plan 
for establishing and operating a small business 
incubator program will do the following:
(i) Enhance small business develop-
ment.
420
(ii) Meet the needs and goals of the 
community in which the incubator is to be 
located. 
(iii) Serve as a catalyst for further de-
velopment. 
(iv) Involve the rehabilitation of a 
warehouse, factory, or building which has 
fallen into disrepair. 
(v) Assist in redeveloping a disadvan-
taged area. 
(vi) Target minority and women entre-
preneurs. 
(vii) Focus on the development of man-
ufacturing and technology. 
(viii) Retain or create jobs. 
(ix) Include assistance regarding mar-
keting, financial management, human re-
sources development, and access to capital 
(both debt and equity). 
(4) GRANT REQUIREMENTS.—Each grantee shall 
use the grant funds to establish a small business incu-
bator program, which shall make the following assist-
ance available (on a shared or unshared basis, as the 
grantee may determine) to businesses participating in 
such program:
421
(A) Office space. 
(B) Office equipment, including computers, 
facsimile machines, photocopiers, access to tele-
communications services (including broadband 
services), and manufacturing equipment. 
(C) Administrative and technical staff. 
(D) Training in the areas of marketing, fi-
nancial management, human resources, and con-
tracting. 
(E) Assistance in obtaining loans, including 
loans under subsection (c). 
(F) Assistance in locating investors and 
networking with local business organizations. 
(G) Individualized reviews of marketing, fi-
nancial, and business plans, which shall occur 
monthly for such period as the Administrator 
may determine and quarterly thereafter. 
(H) Legal, accounting, and marketing serv-
ices. 
(I) Mentoring program with established, 
successful, large businesses to last the duration of 
the business’ stay in the incubator. 
(5) ADDITIONAL ASSISTANCE.—A grantee may 
use grant funds to provide child care services to par-