I 
108TH CONGRESS 
1ST SESSION H. R. 2802
To reauthorize the Small Business Act and the Small Business Investment 
Act of 1958, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 21, 2003
Mr. MANZULLO (for himself and Ms. VELA´ZQUEZ) introduced the following 
bill; which was referred to the Committee on Small Business 
A BILL 
To reauthorize the Small Business Act and the Small 
Business Investment Act of 1958, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business Reauthorization and Manufacturing Re-
vitalization Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—SMALL BUSINESS INVESTMENT ACT OF 1958 
AMENDMENTS AND RELATED PROVISIONS
Sec. 101. State defined. 
Sec. 102. Small manufacturer defined. 
Sec. 103. Maximum participating securities rate. 
Sec. 104. Maximum leverage for buying operations. 
Sec. 105. Maximum aggregate amount of leverage. 
Sec. 106. Investments in smaller enterprises. 
Sec. 107. Actions of administrator with respect to capital impairment. 
Sec. 108. Conditions for distribution. 
Sec. 109. Modification of aggregate limitation. 
Sec. 110. Notice and comment rulemaking. 
Sec. 111. Low-income geographic area definition. 
Sec. 112. Unmet equity investment needs of certain small manufacturers. 
Sec. 113. Participation agreement requirement. 
Sec. 114. Final approval requirement. 
Sec. 115. Conditionally approved companies. 
Sec. 116. Applications for new markets venture capital companies. 
Sec. 117. Authorization of appropriations. 
Sec. 118. Repeal of lease guarantee authority. 
Sec. 119. Amendment of congressional findings relating to State development 
companies. 
Sec. 120. Qualification of State development companies. 
Sec. 121. Job requirements; definition. 
Sec. 122. Small business concern loan limitations. 
Sec. 123. Approval requirement. 
Sec. 124. Effective date for termination of certain fees. 
Sec. 125. Accredited lenders program. 
Sec. 126. Premier certified lenders program. 
Sec. 127. Foreclosure and liquidation of loans. 
Sec. 128. Additions to title V. 
Sec. 129. Regulations to carry out amendments to loan program. 
TITLE II—SMALL BUSINESS ACT AMENDMENTS AND RELATED 
PROVISIONS. 
Sec. 201. Short title. 
Sec. 202. Findings; statements of policy. 
Sec. 203. Definitions. 
Sec. 204. Small Business Administration. 
Sec. 205. Financial management. 
Sec. 206. Organization and staff. 
Sec. 207. Loan programs. 
Sec. 208. Government contract and business development assistance for small 
business concerns, etc. 
Sec. 209. Training and assistance. 
Sec. 210. Contracting assistance; etc. 
Sec. 211. Authorization of appropriations; etc. 
Sec. 212. Small business development centers. 
Sec. 213. Assignment of employees of the Office of International Trade. 
Sec. 214. Supervisory and enforcement authority for small business lending 
companies. 
Sec. 215. Reauthorization of Paul D. Coverdell drug-free workplace program. 
Sec. 216. Women’s business center program. 
Sec. 217. HUBZone program. 
Sec. 218. Other repeals and reorganizations. 
Sec. 219. Rules of construction.
TITLE III—OTHER PROVISIONS 
Sec. 301. Report regarding national database of small manufacturers. 
Sec. 302. Workforce transformation plan. 
Sec. 303. Repeal of certain provisions of the Disaster Relief Act of 1970. 
Sec. 304. Regulations on size standards of franchisees. 
Sec. 305. Temporary small business development center assistance to Indian 
tribe members, Native Alaskans, and Native Hawaiians. 
Sec. 306. Temporary small business development center assistance for voca-
tional and technical entrepreneurship development. 
Sec. 307. Very small business concern contract data collection. 
Sec. 308. Very small business concern pilot program for competition award to 
home-based business. 
Sec. 309. Socially and economically disadvantaged business. 
Sec. 310. Study and report on effectiveness of aggregate limitations on amount 
of assistance to any single enterprise. 
Sec. 311. Study and report on coordination of new markets venture capital pro-
gram with new markets tax credit program. 
Sec. 312. Study and report on premier certified lenders program.
TITLE I—SMALL BUSINESS IN-
VESTMENT 
ACT 
OF 
1958 
AMENDMENTS AND RELATED 
PROVISIONS 
SEC. 101. STATE DEFINED. 
Paragraph (4) of section 103 of the Small Business 
Investment Act of 1958 (15 U.S.C. 662) is amended to 
read as follows: 
‘‘(4) the term ‘State’ has the meaning given 
such term in section 3 of the Small Business Act;’’. 
SEC. 102. SMALL MANUFACTURER DEFINED. 
Section 103 of the Small Business Investment Act 
of 1958 (15 U.S.C. 662) is amended—
(1) in paragraph (16), by striking ‘‘and’’ after 
the semicolon at the end;
(2) in paragraph (17), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(18) the term ‘small manufacturer’ has the 
meaning given that term in section 3 of the Small 
Business Act (15 U.S.C. 632).’’. 
SEC. 103. MAXIMUM PARTICIPATING SECURITIES RATE. 
Section 303(g)(2) of the Small Business Investment 
Act of 1958 (15 U.S.C. 683(g)(2)) is amended by striking 
‘‘1.38 percent’’ and inserting ‘‘1.52 percent’’. 
SEC. 104. MAXIMUM LEVERAGE FOR BUYING OPERATIONS. 
Section 303(b)(2) of the Small Business Investment 
Act of 1958 (15 U.S.C. 683(b)(2)) is amended by striking 
subparagraphs (A) and (B) and inserting the following 
new subparagraphs: 
‘‘(A) IN
GENERAL.—The outstanding le-
verage made available to a licensee under sec-
tion 301(c) shall not exceed 300 percent of pri-
vate 
capital, 
up 
to 
a 
maximum 
of 
$115,000,000, except that the maximum shall 
be $150,000,000 if the licensee certifies in writ-
ing that more than 50 percent of its aggregate 
dollar amount of financings are in small manu-
facturers.
‘‘(B) COMMONLY
CONTROLLED
LICENS-
EES.—
‘‘(i) In the case of 2 or more licensees 
that are commonly controlled (as deter-
mined by the Administrator), upon applica-
tion to the Administrator, the outstanding 
leverage made available shall not exceed 
$150,000,000, except that the maximum 
shall be $185,000,000 if the licensees cer-
tify in writing that more than 50 percent 
of their aggregate dollar amount of 
financings are in small manufacturers. The 
Administrator shall have 10 business days 
to approve or disapprove an application 
under the preceding sentence. Approval or 
disapproval is final agency action for pur-
poses of chapter 7 of title 5, United States 
Code. 
‘‘(ii) Not later than 120 days after 
the enactment of this subparagraph, the 
Administrator shall prescribe regulations 
providing standards and conditions for in-
creases in leverage, including the standards 
for determining common control of licens-
ees.
‘‘(iii) Until regulations are prescribed 
under clause (ii), the Administrator shall 
approve the application of each commonly 
controlled licensee under the definition of 
common control in section 107.50 of title 
13, Code of Federal Regulations, as in ef-
fect on January 1, 2003.’’. 
SEC. 105. MAXIMUM AGGREGATE AMOUNT OF LEVERAGE. 
Section 303(b) of the Small Business Investment Act 
of 1958 (15 U.S.C. 683(b)) is amended by striking para-
graph (4) and all that follows through the end of the sen-
tence beginning ‘‘For purposes of’’ after that paragraph. 
SEC. 106. INVESTMENTS IN SMALLER ENTERPRISES. 
Sections 303(d) of the Small Business Investment 
Act of 1958 (15 U.S.C. 683(d)) is amended to read as 
follows: 
‘‘(d) INVESTMENTS IN SMALLER ENTERPRISES.—As 
a condition of approval of an application for leverage, the 
Administrator shall require a licensee to certify in writing 
that not less than 25 percent of the licensee’s aggregate 
dollar amount of financings will be provided to smaller en-
terprises.’’.
a company with outstanding participating securities 
may distribute the balance of income to its investors, 
if there are no accumulated and unpaid prioritized 
payments. 
‘‘(A) Amounts received by the Administra-
tion under this paragraph and paragraph 8 
shall be applied first as prepayment of the prin-
cipal amount of the outstanding participating 
securities or debentures of the company at the 
time of such distribution and then to the alloca-
tion under paragraph (11). 
‘‘(B) Distributions under this paragraph 
shall be made to private investors and to the 
Administration in the ratio of private capital to 
leverage as of the day before the distribution 
until the outstanding participating securities or 
debentures of the company are paid in full, 
after which any remaining distributions under 
this paragraph shall be made to private inves-
tors and to the Administration in the ratio that 
is provided for the allocation of profits in para-
graph (11). 
‘‘(C) The Administrator shall prescribe 
such regulations as are required to assure that 
management fees for the company are not un-
reasonably reduced due to a reduction in com-
bined capital as a result of distributions made 
under this paragraph.’’. 
SEC. 109. MODIFICATION OF AGGREGATE LIMITATION. 
Section 306(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 686(a)) is amended by inserting ‘‘(and 
not including any obligations or securities issued under 
section 7(a) of the Small Business Act or title V of this 
Act)’’ after ‘‘under the provisions of this title’’. 
SEC. 110. NOTICE AND COMMENT RULEMAKING. 
Section 308(c) of the Small Business Investment Act 
of 1958 (15 U.S.C. 687) is amended by adding at the end 
the following: ‘‘Any rules or regulations issued under this 
Act, other than those relating to agency management or 
personnel, shall be issued pursuant to section 553(b) of 
title 5, United States Code.’’.
SEC. 111. LOW-INCOME GEOGRAPHIC AREA DEFINITION. 
(a) IN GENERAL.—Section 351(3)(A)(ii)(I) of the 
Small Business Investment Act of 1958 (15 U.S.C. 
689(3)(A)(ii)(I)) is amended by striking ‘‘50 percent’’ and 
all that follows through the end and inserting ‘‘the median 
family income in that tract does not exceed 80 percent 
of the greater of statewide median family income or the 
metropolitan area median family income; or’’.
(b) APPLICATION OF AMENDED DEFINITION.—The 
definition of low-income geographic area in section 351(3) 
of the Small Business Investment Act of 1958 (15 U.S.C. 
689(3)), as amended by subsection (a), shall apply to pri-
vate capital raised under section 354(d)(1) of the Small 
Business Investment Act of 1958 (15 U.S.C. 689c(d)(1)) 
before, on, or after the effective date of the amendment 
made by subsection (a). 
SEC. 112. UNMET EQUITY INVESTMENT NEEDS OF CERTAIN 
SMALL MANUFACTURERS. 
Section 352(2) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689a(2)) is amended by inserting after 
‘‘small enterprises’’ the following: ‘‘and small manufactur-
ers’’. 
SEC. 113. PARTICIPATION AGREEMENT REQUIREMENT. 
Section 353(1) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689b(1)) is amended by inserting after 
‘‘section 352’’ the following: ‘‘(with at least one such 
agreement to be with a company engaged primarily in de-
velopment of and investment in small manufacturers)’’. 
SEC. 114. FINAL APPROVAL REQUIREMENT. 
Section 354(d) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689c(d)) is amended, in the matter 
before paragraph (1), by striking ‘‘a period of time not 
to exceed’’.
SEC. 115. CONDITIONALLY APPROVED COMPANIES. 
Section 358(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689(a)) is amended by adding at the 
end the following new paragraphs: 
‘‘(6) GRANTS
TO
CONDITIONALLY
APPROVED 
COMPANIES.—Upon the request of a company condi-
tionally-approved under section 354(c), the Adminis-
trator shall provide up to $50,000 in grant assist-
ance for establishment of an operational assistance 
program under this title. 
‘‘(7) REPAYMENT.—If a company receives a 
grant under paragraph (6) and does not enter into 
a participation agreement for final approval, the 
company shall repay the amount of the grant to the 
Administrator. 
‘‘(8) DEDUCTION.—If a company receives a 
grant under paragraph (6) and receives final ap-
proval under section 354(e), the Administrator shall 
deduct the amount of the grant under that para-
graph from the total grant amount that the com-
pany receives for operational assistance.’’. 
SEC. 116. APPLICATIONS FOR NEW MARKETS VENTURE 
CAPITAL COMPANIES. 
Not later than 60 days after the date of the enact-
ment of this section, the Administrator shall prescribe 
standard documents for final New Markets Venture Cap-
ital Company approval application under section 354(e) of 
the Small Business Investment Act of 1958 (15 U.S.C. 
689c(e)). The Administrator shall assure that the stand-
ard documents shall be designed to substantially reduce 
the cost burden of the application process on the compa-
nies involved. 
SEC. 117. AUTHORIZATION OF APPROPRIATIONS. 
Section 368(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689q(a)) is amended—
(1) in the matter before paragraph (1) by strik-
ing ‘‘fiscal years 2001 through 2006’’ and inserting 
‘‘fiscal years 2004 and 2005’’; 
(2) 
in 
paragraph 
(1), 
by 
striking 
‘‘$150,000,000’’ and inserting ‘‘$75,000,000’’; and 
(3) 
in 
paragraph 
(2), 
by 
striking 
‘‘$30,000,000’’ and inserting ‘‘$15,000,000’’. 
SEC. 118. REPEAL OF LEASE GUARANTEE AUTHORITY. 
(a) REPEAL.—Sections 401, 402, and 404 of the 
Small Business Investment Act of 1958 (15 U.S.C. 692, 
693, and 694-1) are hereby repealed. 
(b) APPLICATION TO OUTSTANDING GUARANTEES.—
The repeals made by subsection (a) shall not affect the 
rights, powers, duties, or obligations of the Administrator 
or any other person with respect to any guarantee made 
under section 401 or 404 of the Small Business Invest-
ment Act of 1958 on or before the date of the enactment 
of this Act. 
SEC. 119. AMENDMENT OF CONGRESSIONAL FINDINGS RE-
LATING TO STATE DEVELOPMENT COMPA-
NIES. 
Section 501(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 695(a)) is amended by striking ‘‘pur-
pose’’ and all that follows through ‘‘areas’’ and inserting 
the following: ‘‘purposes of this title are to foster economic 
development and create or preserve job opportunities in 
both urban and rural areas, and to enhance the ability 
of America’s small manufacturers to expand’’. 
SEC. 120. QUALIFICATION OF STATE DEVELOPMENT COM-
PANIES. 
Section 501(d) of the Small Business Investment Act 
of 1958 (15 U.S.C. 695(d)) is amended—
(1) in paragraph (2), by inserting after ‘‘area,’’ 
the following: ‘‘increasing the productive capacity of 
small manufacturers,’’; 
(2) in paragraph (3) by striking subparagraph 
(D) and inserting the following: 
‘‘(D) development in a community with a 
population of less than 50,000 that is not lo-
cated within a Standard Metropolitan Statis-
tical Area,’’; and
(3) by striking the sentence beginning ‘‘If eligi-
bility’’ after subparagraph (H) of paragraph (3). 
SEC. 121. JOB REQUIREMENTS; DEFINITION. 
Section 501 of the Small Business Investment Act 
of 1958 (15 U.S.C. 695) is amended by adding at the end 
the following new subsection: 
‘‘(e)(1) A project meets the objective set forth in sub-
section (d)(1) if the project creates or retains one job for 
every $50,000 guaranteed by the Administration, except 
that the amount is $100,000 in the case of a project of 
a small manufacturer. 
‘‘(2) Paragraph (1) does not apply to a project for 
which eligibility is based on the objectives set forth in 
paragraph (2) or (3) of subsection (d), if the development 
company’s portfolio of outstanding debentures creates or 
retains one job for every $50,000 guaranteed by the Ad-
ministration. 
‘‘(3) For projects in Alaska, Hawaii, State-designated 
urban or rural jobs and enterprise zones, empowerment 
zones and enterprise communities, labor surplus areas, as 
determined by the Secretary of Labor, and for other areas 
designated by the Administrator, the development com-
pany’s portfolio may average not more than $75,000 per 
job created or retained.
‘‘(4) Loans for projects of small manufacturers shall 
be excluded from calculations under paragraph (2) or (3). 
‘‘(5) Under regulations prescribed by the Adminis-
trator, the Administrator may waive any requirement of 
this subsection (other than paragraph (4)). Such regula-
tions shall be issued after notice and comment and shall 
be codified in the Code of Federal Regulations.’’. 
SEC. 122. SMALL BUSINESS CONCERN LOAN LIMITATIONS. 
Section 502(2) of the Small Business Investment Act 
of 1958 (15 U.S.C. 696(2)) is amended—
(1) by striking ‘‘$1,000,000’’ and inserting 
‘‘$2,000,000’’; 
(2) by striking ‘‘$1,300,000’’ and inserting 
‘‘$2,500,000’’; and 
(3) by inserting after ‘‘small business concern’’ 
the last place it appears the following: ‘‘and loans to 
small manufacturers shall be limited to $4,000,000 
and loans under this section shall not be limited by 
reason of any loan guaranteed by the Administration 
under section 7(a) of the Small Business Act (15 
U.S.C. 636(a)).’’. 
SEC. 123. APPROVAL REQUIREMENT. 
Section 503(b) of the Small Business Investment Act 
of 1958 (15 U.S.C. 697(b)) is amended by striking para-
graph (6) and inserting the following:
‘‘(6) except as provided in section 508, the Ad-
ministration approves each loan to be made from 
such proceeds in accordance with section 512, (but 
such approval shall not require a small business in-
vestment company licensed under title III of this Act 
to guarantee a loan without regard to its ownership 
percentage of the borrower); and’’. 
SEC. 124. EFFECTIVE DATE FOR TERMINATION OF CERTAIN 
FEES. 
Section 503(f) of the Small Business Investment Act 
of 1958 (15 U.S.C. 697(f)) is amended by striking ‘‘2003’’ 
and inserting ‘‘2005’’. 
SEC. 125. ACCREDITED LENDERS PROGRAM. 
Section 507 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697d) is amended—
(1) in subsection (b)(1), by inserting ‘‘and’’ 
after the semicolon at the end; 
(2) in subsection (b), by striking paragraphs 
(2) through (6) and inserting the following: 
‘‘(2) has a loan default rate, as determined by 
the Bureau of Premier Certified Lenders Program 
Oversight, that is—
‘‘(A) less than the national average; 
‘‘(B) one percent higher than the national 
average, if at least 20 percent of the develop-
ment company’s portfolio is for projects in 
areas referred to in section 501(e)(3); or 
‘‘(C) two percent higher than the national 
average, if at least 30 percent of the develop-
ment company’s portfolio is for projects of 
small manufacturers.’’; 
(3) by striking subsection (c); and 
(4) in subsection (d)(1), by striking ‘‘that—’’ 
and all that follows through the end and inserting: 
‘‘that the development company has not continued to 
meet the requirements of subsection (b).’’.
SEC. 126. PREMIER CERTIFIED LENDERS PROGRAM. 
Section 508 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697e) is amended to read as follows: 
‘‘SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM. 
‘‘(a) ESTABLISHMENT.—The Administrator may es-
tablish a Premier Certified Lenders Program for qualified 
State and local development companies that meet the re-
quirements of subsection (b). 
‘‘(b) REQUIREMENTS.—
‘‘(1) APPLICATION.—To be eligible to partici-
pate in the Premier Certified Lenders Program es-
tablished under subsection (a), a qualified State and 
local development company shall prepare and submit 
to the Administrator an application at such time, in
such manner, and containing such information as 
the Administrator may require. 
‘‘(2) DESIGNATION.—The Administrator may 
designate a qualified State and local development 
company as a premier certified lender—
‘‘(A) if the company is an active qualified 
State and local development company in good 
standing and has been an active participant in 
the accredited lenders program during the en-
tire 12-month period preceding the date on 
which the company submits an application 
under paragraph (1), except that the Adminis-
trator may waive this requirement if the com-
pany is qualified to participate in the accredited 
lenders program; 
‘‘(B) if the company has a history of—
‘‘(i) submitting to the Administrator 
adequately analyzed debenture guarantee 
application packages; and 
‘‘(ii) of properly closing section 504 
loans and servicing its loan portfolio; 
‘‘(C) if the company agrees to assume and 
to reimburse the Administration for 10 percent 
of any loss sustained by the Administration as 
a result of default by the company in the pay-
ment of principal or interest on a debenture 
issued by such company and guaranteed by the 
Administrator under this section (15 percent in 
the case of any such loss attributable to a de-
benture issued by the company during any pe-
riod for which an election is in effect under sub-
section (c)(7) for such company); and 
‘‘(D) the Administrator determines, with 
respect to the company, that the loss reserve es-
tablished in accordance with subsection (c) is 
sufficient for the company to meet its obliga-
tions to protect the Federal Government from 
risk of loss. 
‘‘(3) APPLICABILITY OF CRITERIA AFTER DES-
IGNATION.—The Administrator may revoke the des-
ignation of a qualified State and local development 
company as a premier certified lender under this 
section at any time, if the Administrator determines 
that the qualified State and local development com-
pany does not meet any requirement described in 
subparagraphs (A) through (D) of paragraph (2). 
‘‘(c) LOSS RESERVE.—
‘‘(1) ESTABLISHMENT.—A company designated 
as a premier certified lender shall establish a loss re-
serve for financing approved pursuant to this sec-
tion. 
‘‘(2) AMOUNT.—The amount of each loss re-
serve established under paragraph (1) shall be 10 
percent of the amount of the company’s exposure, as 
determined under subsection (b)(2)(C). 
‘‘(3) ASSETS.—Each loss reserve established 
under paragraph (1) shall be comprised of—
‘‘(A) segregated funds on deposit in an ac-
count or accounts with a federally insured de-
pository institution or institutions selected by 
the company, subject to a collateral assignment 
in favor of, and in a format acceptable to, the 
Administrator; 
‘‘(B) irrevocable letter or letters of credit, 
with a collateral assignment in favor of, and a 
commercially reasonable format acceptable to, 
the Administrator; or 
‘‘(C) any combination of the assets de-
scribed in subparagraphs (A) and (B). 
‘‘(4) CONTRIBUTIONS.—The company shall 
make contributions to the loss reserve, either cash or 
letters of credit as provided above, in the following 
amounts and at the following intervals:
‘‘(A) 50 percent when a debenture is 
closed. 
‘‘(B) 25 percent additional not later than 
1 year after a debenture is closed. 
‘‘(C) 25 percent additional not later than 
2 years after a debenture is closed. 
‘‘(5) REPLENISHMENT.—If a loss has been sus-
tained by the Administration, any portion of the loss 
reserve, and other funds provided by the premier 
company as necessary, may be used to reimburse the 
Administrator for the premier company’s 10 percent 
share of the loss as provided in subsection (b)(2)(C). 
If the company utilizes the reserve, within 30 days 
it shall replace an equivalent amount of funds. 
‘‘(6) 
DISBURSEMENTS.—The 
Administrator 
shall allow the qualified State and local development 
company to withdraw from the loss reserve such 
amounts as are in excess of 1 percent of the aggre-
gate outstanding balances of debentures to which 
such loss reserve relates. The preceding sentence 
shall not apply with respect to any debenture before 
100 percent of the contribution described in para-
graph (4) with respect to such debenture has been 
made. 
‘‘(7) ALTERNATIVE LOSS RESERVE.—
‘‘(A) ELECTION.—With respect to any eli-
gible calendar quarter, a qualified high loss re-
serve premier certified lender may elect to have 
the requirements of this paragraph apply in lieu 
of the requirements of paragraphs (2) and (4) 
for that quarter. 
‘‘(B) CONTRIBUTIONS.—
‘‘(i) 
ORDINARY
RULES
INAPPLI-
CABLE.—Except as provided under clause 
(ii) and paragraph (5), a qualified high 
loss reserve premier certified lender that 
makes the election described in subpara-
graph (A) with respect to a calendar quar-
ter shall not be required to make contribu-
tions to its loss reserve during that quar-
ter. 
‘‘(ii) BASED
ON
LOSS.—A qualified 
high loss reserve premier certified lender 
that makes the election described in sub-
paragraph (A) with respect to a calendar 
quarter shall, before the last day of that 
quarter, make such contributions to its 
loss reserve as are necessary to ensure that 
the amount of the loss reserve of the lend-
er—
‘‘(I) is not less than $100,000; 
and 
‘‘(II) is sufficient, as determined 
by a qualified independent auditor, for 
the lender to meet its obligations to 
protect the Government from risk of 
loss. 
‘‘(iii) 
CERTIFICATION.—Before 
the 
end of a calendar quarter for which an 
election is in effect under subparagraph 
(A), the head of the premier certified lend-
er shall submit to the Administrator a cer-
tification that the loss reserve of the lender 
is sufficient to meet the lender’s obligation 
to protect the Government from risk of 
loss. The certification shall be submitted in 
such form and manner as the Adminis-
trator may require and shall be signed by 
the head of the lender and by the auditor 
making the determination under clause 
(ii)(II). 
‘‘(C) DISBURSEMENTS.—
‘‘(i) 
ORDINARY
RULE
INAPPLI-
CABLE.—Paragraph (6) shall not apply 
with respect to any qualified high loss re-
serve premier certified lender for any cal-
endar quarter for which an election is in 
effect under subparagraph (A). 
‘‘(ii) EXCESS FUNDS.—At the end of 
each calendar quarter for which an election 
is in effect under subparagraph (A), the 
Administrator shall allow the qualified high 
loss reserve premier certified lender to 
withdraw from its loss reserve the excess 
of—
‘‘(I) the amount of the loss re-
serve, over 
‘‘(II) the greater of $100,000 or 
the amount which is determined under 
subparagraph (B)(ii) to be sufficient 
to meet the lender’s obligation to pro-
tect the Government from risk of loss. 
‘‘(D) RECONTRIBUTION.—If the require-
ments of this paragraph apply to a qualified 
high loss reserve premier certified lender for a 
calendar quarter and cease to apply to that 
lender for any subsequent calendar quarter, the 
lender shall make a contribution to its loss re-
serve in such amount as the Administrator may 
require, except that the amount shall not exceed
the amount which would result in the total 
amount in the loss reserve being equal to the 
amount which would have been in the loss re-
serve had this paragraph never applied to the 
lender. The Administrator may require that the 
contribution be made as a single payment or as 
a series of payments. 
‘‘(E) RISK MANAGEMENT.—If a qualified 
high loss reserve premier certified lender fails 
to meet the requirement of subparagraph 
(F)(iii) during any period for which an election 
is in effect under subparagraph (A) and the 
failure continues for 180 days, the requirements 
of paragraphs (2), (4), and (6) shall apply to 
the lender as of the end of the 180-day period 
and the lender shall make the contribution de-
scribed in subparagraph (D). The Adminis-
trator may waive the requirements of this sub-
paragraph. 
‘‘(F) QUALIFIED
HIGH
LOSS
RESERVE 
PREMIER
CERTIFIED
LENDER.—The 
term 
‘qualified high loss reserve premier certified 
lender’ means, with respect to a calendar year, 
a premier certified lender so designated by the 
Administrator for that year. The Administrator
shall not designate a company under the pre-
ceding sentence unless the Administrator deter-
mines that—
‘‘(i) the amount of the loss reserve of 
the company is not less than $100,000; 
‘‘(ii) the company has established and 
is utilizing an appropriate and effective 
process for analyzing the risk of loss asso-
ciated with its portfolio of Premier Cer-
tified Lenders Program loans and for 
grading each Premier Certified Lenders 
Program loan made by the company on the 
basis of the risk of loss associated with 
such loan; and 
‘‘(iii) the company meets or exceeds 4 
or more of the specified risk management 
benchmarks as of the most recent assess-
ment by the Administration or the Admin-
istrator has issued a waiver with respect to 
the requirement of this clause. 
‘‘(G) 
SPECIFIED
RISK
MANAGEMENT 
BENCHMARKS.—For purposes of this para-
graph, the term ‘specified risk management 
benchmarks’ means the following rates, as de-
termined by the Administrator:
‘‘(i) Currency rate. 
‘‘(ii) Delinquency rate. 
‘‘(iii) Default rate. 
‘‘(iv) Liquidation rate. 
‘‘(v) Loss rate. 
‘‘(H) QUALIFIED
INDEPENDENT
AUDI-
TOR.—For purpose of this paragraph, the term 
‘qualified independent auditor’ means an audi-
tor who—
‘‘(i) is compensated by the qualified 
high loss reserve premier certified lender; 
‘‘(ii) is independent of the lender; and 
‘‘(iii) has been approved by the Ad-
ministrator during the preceding year. 
‘‘(I) PREMIER CERTIFIED LENDERS PRO-
GRAM LOAN.—For purposes of this paragraph, 
the term ‘Premier Certified Lenders Program 
loan’ means a loan guaranteed under this sec-
tion. 
‘‘(J) ELIGIBLE CALENDAR QUARTER.—For 
purposes of this paragraph, the term ‘eligible 
calendar quarter’ means—
‘‘(i) the first calendar quarter that be-
gins after the end of the 90-day period be-
ginning with the date of the enactment of 
this paragraph; and 
‘‘(ii) the 7 succeeding calendar quar-
ters. 
‘‘(K) REGULATIONS.—Not later than 60 
days after the date of the enactment of this 
paragraph, the Administrator shall publish in 
the Federal Register and transmit to the Con-
gress regulations to carry out this paragraph. 
Such regulations shall include provisions relat-
ing to—
‘‘(i) the approval of auditors under 
subparagraph (H); and 
‘‘(ii) the designation of qualified high 
loss reserve premier certified lenders under 
subparagraph (F), including the deter-
mination of whether a process for ana-
lyzing risk of loss is appropriate and effec-
tive for purposes of subparagraph (F)(ii). 
‘‘(8) BUREAU OF PREMIER CERTIFIED LEND-
ERS PROGRAM OVERSIGHT.—
‘‘(A) ESTABLISHMENT.—There is hereby 
established in the Small Business Administra-
tion a bureau to be known as the Bureau of 
Premier Certified Lenders Program Oversight.
‘‘(B) PURPOSE.—The Bureau shall carry 
out such functions of the Administration under 
this subsection as the Administrator may des-
ignate. The functions of the Bureau under the 
preceding sentence may not be delegated to a 
deputy director or any other employee assigned 
to a district office or regional office established 
by the Administrator under section 4 of the 
Small Business Act (15 U.S.C. 633). 
‘‘(C) DEADLINE.—Not later than 90 days 
after the date of the enactment of this para-
graph—
‘‘(i) the Administrator shall ensure 
that the Bureau is prepared to carry out 
the functions designated under subpara-
graph (B), and 
‘‘(ii) the Inspector General of the Ad-
ministration shall report to the Congress 
on the preparedness of the Bureau to carry 
out such functions. 
‘‘(D) If the Administrator does not comply 
with subparagraph (C)(i), the certifications re-
quired under this section shall be deemed ap-
proved until the date of compliance. Certifi-
cations so deemed approved shall continue in ef-
fect notwithstanding any later compliance.
‘‘(d) SALE OF CERTAIN DEFAULTED LOANS.—
‘‘(1) NOTICE.—If, upon default in repayment, 
the Administrator acquires a loan guaranteed under 
this section and identifies such loan for inclusion in 
a bulk asset sale of defaulted or repurchased loans 
or other financings, it shall give prior notice thereof 
to any qualified State and local development com-
pany which has a contingent liability under this sec-
tion. The notice shall be given to the company as 
soon as possible after the financing is identified, but 
not less than 90 days before the date the Adminis-
trator first makes any records on such financing 
available for examination by prospective purchasers 
prior to its offering in a package of loans for bulk 
sale. 
‘‘(2) LIMITATIONS.—The Administrator shall 
not offer any loan described in paragraph (1) as 
part of a bulk sale unless it—
‘‘(A) provides prospective purchasers with 
the opportunity to examine the Administrator’s 
records with respect to such loan; and 
‘‘(B) provides the notice required by para-
graph (1).
‘‘(e) LOAN APPROVAL AUTHORITY.—
‘‘(1) IN
GENERAL.—Notwithstanding section 
503(b)(6), and subject to such terms and conditions 
as the Administrator may establish, the Adminis-
trator may permit a company designated as a pre-
mier certified lender under this section to approve, 
authorize, close, service, foreclose, litigate (except 
that the Administrator may monitor the conduct of 
any such litigation to which a premier certified lend-
er is a party), and liquidate loans that are funded 
with the proceeds of a debenture issued by such 
company and may authorize the guarantee of such 
debenture. 
‘‘(2) SCOPE OF REVIEW.—The approval of a 
loan by a premier certified lender shall be subject to 
final approval as to eligibility of any guarantee by 
the Administrator pursuant to section 503(a), but 
such final approval shall not include review of deci-
sions by the lender involving creditworthiness, loan 
closing, or compliance with legal requirements im-
posed by law or regulation. 
‘‘(f) REVIEW.—After the issuance and sale of deben-
tures under this section, the Administrator, at intervals 
not greater than 12 months, shall review the financings 
made by each premier certified lender. The review shall
include the lender’s credit decisions and general compli-
ance with the eligibility requirements for each financing 
approved under the program authorized under this sec-
tion. The Administrator shall consider the findings of the 
review in carrying out its responsibilities under subsection 
(g), but such review shall not affect any outstanding de-
benture guarantee. 
‘‘(g) SUSPENSION OR REVOCATION.—The designa-
tion of a qualified State and local development company 
as a premier certified lender may be suspended or revoked 
if the Administrator determines that the company—
‘‘(1) has not continued to meet the criteria for 
eligibility under subsection (b); 
‘‘(2) has not established or maintained the loss 
reserve required under subsection (c); 
‘‘(3) is failing to adhere to the Administrator’s 
rules and regulations; or 
‘‘(4) is violating any other applicable provision 
of law. 
‘‘(h) EFFECT OF SUSPENSION OR REVOCATION.—A 
suspension or revocation under subsection (g) shall not af-
fect any outstanding debenture guarantee. 
‘‘(i) PROGRAM GOALS.—Each qualified State and 
local development company participating in the program 
under this section shall establish a goal of processing a
minimum of not less than 50 percent of the loan applica-
tions for assistance under section 504 pursuant to the pro-
gram authorized under this section. 
‘‘(j) REPORT.—The Administrator shall annually re-
port to the Committee on Small Business of the House 
of Representatives and the Committee on Small Business 
and Entrepreneurship of the Senate on the implementa-
tion of this section. Each report shall include—
‘‘(1) the number of qualified State and local de-
velopment companies designated as premier certified 
lenders; 
‘‘(2) the debenture guarantee volume of such 
companies; 
‘‘(3) a comparison of the loss rate for premier 
certified lenders to the loss rate for accredited and 
other lenders, specifically comparing default rates 
and recovery rates on liquidations; and 
‘‘(4) such other information as the Adminis-
trator deems appropriate.’’. 
(b) EFFECTIVE DATE.—Section 508(c)(6) of the 
Small Business Act (as amended by subsection (a)) shall 
apply to withdrawals after the end the 90-day period be-
ginning on the date of the enactment of this Act.
SEC. 127. FORECLOSURE AND LIQUIDATION OF LOANS. 
Section 510 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697g) is amended—
(1) in subsection (a), by striking ‘‘that meets 
the eligibility requirements of subsection (b)(1)’’; 
and 
(2) by striking subsection (b) and all that fol-
lows through the end and inserting the following new 
subsections: 
‘‘(b) ELECTION BY QUALIFIED STATE OR LOCAL DE-
VELOPMENT COMPANY.—
‘‘(1) A qualified State or local development 
company shall be eligible for the delegation of au-
thority under subsection (a) if such company elects 
to accept such delegation during the 90-day period 
beginning on the date of the enactment of this sub-
section. 
‘‘(2) One year after the date of the initial elec-
tion, and annually thereafter by a date specified by 
the Administrator, a qualified State or local develop-
ment company may make a new election to accept 
the delegation under subsection (a). 
‘‘(3) An election under this subsection shall 
apply to all loans in the portfolio involved. An elec-
tion made in a subsequent year does not terminate
any foreclosure or liquidation under a previous elec-
tion. 
‘‘(c) SCOPE OF DELEGATED AUTHORITY.—
‘‘(1) Each qualified State or local development 
company that makes an election under subsection 
(b) shall perform all functions related to liquidation 
and foreclosure without obtaining prior approval of 
the Administrator. 
‘‘(2) Not later than 5 calendar days after exer-
cising delegated authority with respect to a specific 
loan, the qualified State or local development com-
pany shall report to the Administrator the actions 
that the company proposes to take with respect to 
the loan. 
‘‘(3) The Administrator may prohibit an action 
proposed under paragraph (2) by so notifying the 
company in writing. The notification shall state the 
reasons for the prohibition, including a detailed ex-
planation of how the proposed actions—
‘‘(A) will have a serious adverse effect on 
management of the Administration’s activities 
under this title; or 
‘‘(B) will affect the legal rights of the Ad-
ministration or other agencies or instrumental-
ities of the United States.
‘‘(4) A prohibition under paragraph (3) shall 
apply only to the loan involved and shall not affect 
any other delegation. 
‘‘(d) PURCHASE
OF INDEBTEDNESS.—A qualified 
State or local development company may not commit the 
Administration to the purchase of additional indebtedness 
secured by property that is the subject of a defaulted loan 
without the written approval of the Administrator. The 
Administrator shall have 7 calendar days in which to act 
on a request for approval for such an additional purchase. 
Action by the Administrator under this subsection shall 
have no other effect on the delegation of authority exer-
cised by the qualified State or local development company. 
‘‘(e) FORECLOSURE AND LIQUIDATION BY ADMINIS-
TRATOR.—
‘‘(1) The Administrator shall issue contracts to 
foreclose or liquidate loans made during any year for 
which a qualified State or local development com-
pany did not make an election under subsection (b). 
‘‘(2) In awarding contracts under this sub-
section, the Administrator shall not consolidate con-
tract requirements that relate to more than one 
qualified State or local development company unless 
the Administrator determines that such consolida-
tion will achieve—
‘‘(A) a reduction in cost of not less than 
10 percent; or 
‘‘(B) an increase in the recovered amount 
of not less than 10 percent. 
‘‘(3) In awarding contracts under this section, 
the Administrator shall consider the experience and 
expertise of the offeror regarding conducting similar 
foreclosure and liquidation of indebtedness, the 
bankruptcy laws of the United States, valuation of 
property, and successful litigation. 
‘‘(4) Reimbursement to contractors under this 
subsection shall be based on recovery of their costs 
(including salaries, expenses, and overhead) and a 
contingent fee, with respect to each loan which is 
subject to the contract, as follows: 
‘‘(A) in the case of recovery of at least 50 
percent of outstanding amount of such loan, a 
contingent fee equal to 5 percent of the recov-
ery; and 
‘‘(B) in the case of recovery of at least 75 
percent of such amount, a contingent fee equal 
to 10 percent of the recovery.
SEC. 128. ADDITIONS TO TITLE V. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.) is amended by adding at the end 
the following new sections: 
‘‘SEC. 511. SHORT FORM APPLICATION. 
‘‘(a) IN GENERAL.—Not later than 120 days after 
the date of the enactment of this section, the Adminis-
trator shall prescribe—
‘‘(1) a low documentation loan application form 
for use in making loans under section 502 for guar-
antees of not more than $500,000; and 
‘‘(2) for all other loans made under section 502, 
a short form application form that reduces the 
amount of information needed to process the loan by 
30 percent from the size of the loan application in 
effect on January 1, 2003. 
‘‘(b) USE OF DEVELOPMENT COMPANY FORMS.—If 
the Administrator does not comply with paragraph (1) or 
(2) of subsection (a), a qualified State or local develop-
ment company may use its own forms until the Adminis-
trator prescribes the form involved. 
‘‘SEC. 512. CENTRALIZED DEVELOPMENT COMPANY LOAN 
PROCESSING. 
‘‘(a) ESTABLISHMENT.—
‘‘(1) Not later than 180 days after the date of 
the enactment of this section, the Administration
section (a), the Administration shall have 5 business 
days to approve or deny the application. 
‘‘(B) Not later than one business day after the 
date on which an application is received, the Admin-
istration shall notify the applicant and the qualified 
State or local development company in writing that 
the application was received and was either complete 
or incomplete. The notification shall specify the date 
and time at which the application was received. If 
the application is incomplete, the notification shall 
specify the material needed to make the application 
complete. 
‘‘(C) The Administration may return an appli-
cation for incompleteness not more than 3 times 
after which the applicant may use forms developed 
by the qualified State or local development company. 
‘‘(2) An accredited lender designated under sec-
tion 507 shall have the authority to approve or deny 
a loan application if the Administration does not act 
within 5 business days from the date a complete ap-
plication is received by the center. Notwithstanding 
any other law, a qualified State or local development 
company that is not designated as an accredited or 
premier certified lender shall have the authority to
approve or deny a loan if the Administration does 
not make a decision within 20 business days. 
‘‘(c) APPEAL OF DENIAL.—
‘‘(1) An applicant shall have the right to appeal 
a denial to the Regional Administrator for the region 
in which the qualified State or local development 
company is headquartered. Not later than 3 business 
days after receipt, the Regional Administrator shall 
either concur with the denial or approve the loan. 
‘‘(2) If the Regional Administrator denies the 
loan, the applicant shall have the right of appeal to 
the Deputy Administrator. Not later than 3 business 
days after receipt, the Deputy Administrator shall 
either concur with the denial by the Regional Ad-
ministrator or approve the loan. 
‘‘(3) The decision of the Deputy Administrator 
shall constitute final agency action for purposes of 
chapter 7 of title 5, United States Code. 
‘‘SEC. 513. REPORTS. 
‘‘The Administrator shall report on the performance 
of the loans made under this title on a semi-annual basis 
to the Committee on Small Business of the House of Rep-
resentatives and the Committee on Small Business and 
Entrepreneurship of the Senate. Such report shall include 
the currency and default rates.’’.
SEC. 129. REGULATIONS TO CARRY OUT AMENDMENTS TO 
LOAN PROGRAM. 
(a) ISSUANCE.—The Administrator shall, not later 
than 90 days after the date of the enactment of this Act, 
prescribe such regulations as are necessary to carry out 
the provisions of this Act that relate to title V of the Small 
Business Investment Act of 1958 and shall provide a min-
imum of 30 days notice and comment with respect to such 
regulations. 
(b) TEMPORARY PROHIBITION
ON OTHER RULE-
MAKING.—During the period beginning on the date of the 
enactment of this Act and ending on the date that is 1 
year after the date on which the centralized loan proc-
essing centers described in section 512 of the Small Busi-
ness Investment Act of 1958 begin operations, the Admin-
istration shall not begin any rulemaking to modify the pro-
gram established by title V of such Act unless such rule-
making is necessary to carry out the provisions of this Act 
described in subsection (a).
TITLE II—SMALL BUSINESS ACT 
AMENDMENTS AND RELATED 
PROVISIONS. 
SEC. 201. SHORT TITLE. 
This title may be cited as the ‘‘Small Business 
Amendments Act of 2003’’.
SEC. 202. FINDINGS; STATEMENTS OF POLICY. 
Section 2 of the Small Business Act (15 U.S.C. 631) 
is amended to read as follows: 
‘‘SEC. 2. FINDINGS; STATEMENTS OF POLICY. 
‘‘(a) AID, COUNSEL, ASSISTANCE, ETC., TO SMALL 
BUSINESS CONCERNS.—The essence of the American eco-
nomic system of private enterprise is free competition. The 
preservation and expansion of such competition is basic 
not only to the economic well-being but to the security of 
this Nation. Such security and well-being cannot be real-
ized unless the actual and potential capacity of small busi-
ness, including small manufacturers, is encouraged and 
developed. It is the declared policy of the Congress that 
the Government should aid, counsel, assist, and protect, 
insofar as is possible, the interests of small business con-
cerns, including small manufacturers, in order to preserve 
free competitive enterprise, to insure that a fair proportion 
of the total purchases and contracts or subcontracts for 
manufactured goods, and property and services for the 
Government (including but not limited to contracts or sub-
contracts for maintenance, repair, and construction) be 
placed with small business concerns, to insure that a fair 
proportion of the total sales of Government property be 
made to such concerns, and to maintain and strengthen 
the overall economy of the Nation.
‘‘(b) ASSISTANCE TO COMPETE IN INTERNATIONAL 
MARKETS.—
‘‘(1) It is the declared policy of the Congress 
that the Federal Government, through the Small 
Business Administration, acting in cooperation with 
the Department of Commerce and other relevant 
State and Federal agencies, should aid and assist 
small business concerns and small manufacturers to 
increase their ability to compete in international 
markets by—
‘‘(A) enhancing their ability to export; 
‘‘(B) facilitating technology transfers; 
‘‘(C) enhancing their ability to compete ef-
fectively and efficiently against imports; 
‘‘(D) increasing the access of small busi-
ness concerns to long-term capital for the pur-
chase of new plant and equipment used in the 
production of goods and services involved in 
international trade; 
‘‘(E) disseminating information concerning 
State, Federal, and private programs and initia-
tives to enhance the ability of small business 
concerns to compete in international markets; 
‘‘(F) ensuring that the interests of small 
business concerns are adequately represented in
bilateral and multilateral trade negotiations; 
and 
‘‘(G) improving the economic health of 
small manufacturers through reduction in un-
necessary regulation and improvements in the 
procurement process that will enhance the abil-
ity of small manufacturers to compete against 
foreign manufacturers. 
‘‘(2) The Congress recognizes that the Depart-
ment of Commerce is the principal Federal agency 
for trade development, export promotion, and manu-
facturing assistance, and that the Department of 
Commerce and the Small Business Administration 
work together to advance joint interests. It is the 
purpose of this Act to enhance, not alter, their re-
spective roles. 
‘‘(c) AID FOR AGRICULTURALLY RELATED INDUS-
TRIES; FINANCIAL ASSISTANCE.—It is the declared policy 
of the Congress that the Government, through the Small 
Business Administration, should provide aid and assist-
ance, including the financial assistance authorized by this 
Act, to small business concerns which are engaged in the 
production of food and fiber, ranching, and raising of live-
stock, aquaculture, and all other farming and agricultural 
related industries.
‘‘(d) USE OF ASSISTANCE PROGRAMS TO ESTABLISH, 
PRESERVE, AND STRENGTHEN SMALL BUSINESS CON-
CERNS.—
‘‘(1) The assistance programs authorized by 
sections 7(i) and 8(a) should be utilized to assist in 
the establishment, preservation, and strengthening 
of small business concerns and the improvement of 
the managerial skills employed in such concerns, 
with special attention to small business concerns—
‘‘(A) located in urban or rural areas with 
high proportions of unemployed or low-income 
individuals; and 
‘‘(B) owned by low-income individuals. 
‘‘(2) With respect to the programs authorized 
by section 8(a), the Congress finds—
‘‘(A) that ownership and control of produc-
tive capital is concentrated in the economy of 
the United States and certain groups, therefore, 
own and control little productive capital; 
‘‘(B) that certain groups in the United 
States own and control little productive capital 
because they have limited opportunities for 
small business ownership; 
‘‘(C) that the broadening of small business 
ownership among groups that presently own
and control little productive capital is essential 
to provide for the well-being of this Nation by 
promoting their increased participation in the 
free enterprise system of the United States; 
‘‘(D) that such development of business 
ownership among groups that presently own 
and control little productive capital will be 
greatly facilitated through the creation of a 
small business ownership development program, 
which shall provide services, including, but not 
limited to, financial, management, and technical 
assistance; 
‘‘(E) that the power to let Federal con-
tracts pursuant to section 8(a) can be an effec-
tive procurement assistance tool for develop-
ment of business ownership, including owner-
ship of small manufacturers, among groups 
that own and control little productive capital; 
and 
‘‘(F) that the procurement authority under 
section 8(a) shall be used only as a tool for de-
veloping business ownership among groups that 
own and control little productive capital. 
‘‘(3) It is therefore the purpose of the programs 
authorized by section 8(a) to—
‘‘(A) foster business ownership and devel-
opment by individuals in groups that own and 
control little productive capital; and 
‘‘(B) promote the competitive viability of 
such firms in the marketplace by creating a 
small business and capital ownership develop-
ment program to provide such available finan-
cial, technical, and management assistance as 
may be necessary. 
‘‘(e) PARTICIPATION IN FREE ENTERPRISE SYSTEM 
BY SOCIALLY AND ECONOMICALLY DISADVANTAGED PER-
SONS.—
‘‘(1) With with respect to the business develop-
ment programs carried out by the Administrator, the 
Congress finds—
‘‘(A) that the opportunity for full partici-
pation in our free enterprise system by socially 
and economically disadvantaged individuals is 
essential if we are to obtain social and economic 
equality for such individuals and improve the 
functioning of our national economy; 
‘‘(B) that many such individuals are so-
cially disadvantaged because of their identifica-
tion as members of certain groups that have 
suffered the effects of discriminatory practices
or similar invidious circumstances over which 
they have no control; 
‘‘(C) that such groups include, but are not 
limited to, Black Americans, Hispanic Ameri-
cans, Native Americans, Asian Pacific Ameri-
cans, Native Hawaiian Organizations, and other 
minorities; 
‘‘(D) that it is in the national interest to 
expeditiously ameliorate the conditions of so-
cially and economically disadvantaged groups; 
‘‘(E) that such conditions can be improved 
by providing the maximum practicable oppor-
tunity for the development of small business 
concerns and small manufacturers owned by 
members of socially and economically disadvan-
taged groups; 
‘‘(F) that such development can be materi-
ally advanced through the procurement by the 
United States of articles, equipment, supplies, 
services, materials, and construction work from 
small business concerns and small manufactur-
ers; and 
‘‘(G) that such procurements also benefit 
the United States by encouraging the expansion 
of suppliers for such procurements, thereby en-
couraging competition among such suppliers 
and promoting economy in such procurements. 
‘‘(2) It is therefore the purpose of section 8(a) 
to—
‘‘(A) promote the business development of 
small business concerns and small manufactur-
ers owned and controlled by socially and eco-
nomically disadvantaged individuals so that 
such concerns can compete on an equal basis in 
the American economy; 
‘‘(B) promote the competitive viability of 
such concerns in the marketplace by providing 
such available contract, financial, technical, and 
management assistance as may be necessary; 
and 
‘‘(C) clarify and expand the program for 
the procurement by the United States of arti-
cles, supplies, services, materials, and construc-
tion work from small business concerns and 
small manufacturers owned by socially and eco-
nomically disadvantaged individuals. 
‘‘(f) ASSISTANCE TO DISASTER VICTIMS UNDER DIS-
ASTER LOAN PROGRAM.—In administering the disaster 
loan program authorized by section 7, the Administrator 
should—
‘‘(1) provide assistance and counseling to dis-
aster victims in filing applications; 
‘‘(2) provide information relevant to loan proc-
essing and loan closing; 
‘‘(3) promptly disburse loan proceeds; and 
‘‘(4) give the disaster program a high priority 
in allocating funds for administrative expenses. 
‘‘(g) ASSISTANCE TO WOMEN OWNED BUSINESS.—
‘‘(1) With respect to the programs and activi-
ties authorized by this Act, the Congress finds 
that—
‘‘(A) women owned business has become a 
major contributor to the American economy by 
providing goods and services, revenues, and 
jobs; 
‘‘(B) over the past two decades there have 
been substantial gains in the social and eco-
nomic status of women as they have sought eco-
nomic equality and independence; 
‘‘(C) despite such progress, women, as a 
group, are subjected to discrimination in entre-
preneurial endeavors due to their gender; 
‘‘(D) such discrimination takes many overt 
and subtle forms adversely affecting the ability
to raise or secure capital, to acquire managerial 
talents, and to capture market opportunities; 
‘‘(E) it is in the national interest to expe-
ditiously remove discriminatory barriers to the 
creation and development of small business con-
cerns owned and controlled by women; 
‘‘(F) the removal of such barriers is essen-
tial to provide a fair opportunity for full partici-
pation in the free enterprise system by women 
and to further increase the economic vitality of 
the Nation; 
‘‘(G) increased numbers of small business 
concerns owned and controlled by women will 
directly benefit the United States Government 
by expanding the potential number of suppliers 
of goods and services to the Government; and 
‘‘(H) programs and activities designed to 
assist small business concerns owned and con-
trolled by women must be implemented in such 
a way as to remove such discriminatory barriers 
while not adversely affecting the rights of so-
cially and economically disadvantaged individ-
uals.
‘‘(2) It is, therefore, the purpose of those pro-
grams and activities conducted under the authority 
of this Act that assist women entrepreneurs to—
‘‘(A) vigorously promote the legitimate in-
terests of small business concerns owned and 
controlled by women; 
‘‘(B) remove, insofar as possible, the dis-
criminatory barriers that are encountered by 
women in accessing capital and other factors of 
production; and 
‘‘(C) require that the Government engage 
in a systematic and sustained effort to identify, 
define and analyze those discriminatory barriers 
facing women and that such effort directly in-
volve the participation of women business own-
ers in the partnership of the public and private 
sectors. 
‘‘(h) CONTRACT BUNDLING.—It is the declared policy 
of the Congress that each Federal agency should—
‘‘(1) comply with congressional intent to foster 
the participation of small business concerns as prime 
contractors, subcontractors, and suppliers; 
‘‘(2) structure its contracting requirements to 
facilitate competition by and among small business
concerns, taking all reasonable steps to eliminate ob-
stacles to their participation; and 
‘‘(3) avoid unnecessary and unjustified bundling 
of contract requirements that precludes small busi-
ness participation in procurements as prime contrac-
tors. 
‘‘(i) SMALL MANUFACTURERS.—
‘‘(1) With respect to the programs and activi-
ties authorized by this Act, the Congress finds 
that—
‘‘(A) the manufacturing sector is a critical 
element of the Nation’s economic security be-
cause it provides high-paying jobs that support 
other sectors of the economy dominated by 
small business; 
‘‘(B) America’s small manufacturers face 
substantial competition from large manufactur-
ers that source components and equipment 
from business concerns located in other coun-
tries with lower wage rates, fewer regulatory re-
strictions, and beneficial currency policies; 
‘‘(C) it is in the national interest to expedi-
tiously grow America’s small manufacturers; 
and
‘‘(D) such growth can be achieved through 
better access to capital, improved technical as-
sistance, and increased procurement of manu-
factured goods by the United States and Amer-
ica’s universities. 
‘‘(2) It is therefore, the purpose of those pro-
grams and activities conducted under the authority 
of this Act that assist small manufacturers to—
‘‘(A) vigorously promote the legitimate in-
terests of small manufacturers; 
‘‘(B) remove, insofar as possible, barriers 
that are encountered by small manufacturers in 
accessing capital, obtaining necessary technical 
assistance, and selling goods to the United 
States and America’s universities; 
‘‘(C) require the Administrator to engage 
in a systematic and sustained effort to identify, 
define, and analyze the barriers to growth fac-
ing America’s small manufacturers, recommend 
changes in policy that will reduce those bar-
riers, and promote the involvement of America’s 
small manufacturers in the partnership of the 
public and private sectors.’’.
SEC. 203. DEFINITIONS. 
Section 3 of the Small Business Act (15 U.S.C. 632) 
is amended to read as follows: 
‘‘SEC. 3. DEFINITIONS. 
‘‘(a) SMALL BUSINESS CONCERNS.—
‘‘(1) IN GENERAL.—For the purposes of this 
Act, a small-business concern, including but not lim-
ited to enterprises that are engaged in the business 
of production of food and fiber, ranching and raising 
of livestock, aquaculture, and all other farming and 
agricultural related industries, shall be deemed to be 
one which is independently owned and operated and 
which is not dominant in its field of operation. 
‘‘(2) ESTABLISHMENT OF SIZE STANDARDS.—
‘‘(A) IN GENERAL.—In addition to the cri-
teria specified in paragraph (1), the Adminis-
trator may specify detailed definitions or stand-
ards by which a business concern may be deter-
mined to be a small business concern for the 
purposes of this Act or any other Act. 
‘‘(B) ADDITIONAL CRITERIA.—The stand-
ards described in paragraph (1) may utilize 
number of employees, dollar volume of business, 
net worth, net income, a combination thereof, 
or other appropriate factors.
‘‘(C) REQUIREMENTS.—Unless specifically 
authorized by statute, no Federal department 
or agency may prescribe a size standard for cat-
egorizing a business concern as a small business 
concern, unless such proposed size standard—
‘‘(i) is proposed after an opportunity 
for public notice and comment; 
‘‘(ii) provides for determining—
‘‘(I) the size of a manufacturing 
concern as measured by the manufac-
turing concern’s average employment 
based upon employment during each 
of the manufacturing concern’s pay 
periods for the preceding 12 months; 
‘‘(II) the size of a business con-
cern providing services on the basis of 
the annual average gross receipts of 
the business concern over a period of 
not less than 3 years; 
‘‘(III) the size of other business 
concerns on the basis of data over a 
period of not less than 3 years; or 
‘‘(IV) other appropriate factors; 
and
‘‘(iii) is approved by the Adminis-
trator. 
‘‘(D) INDUSTRY VARIATION.—When estab-
lishing or approving any size standard pursuant 
to this paragraph, the Administrator shall en-
sure that the size standard varies from industry 
to industry to the extent necessary to reflect the 
differing characteristics of the various indus-
tries and consider other factors deemed to be 
relevant by the Administrator. 
‘‘(3) AGRICULTURAL
ENTERPRISES.—Notwith-
standing paragraphs (1) and (2), an agricultural en-
terprise shall be deemed to be a small business con-
cern if it (including its affiliates) has annual receipts 
not in excess of $750,000. 
‘‘(4) RECERTIFICATIONS.—
‘‘(A) TIMING RESTRICTION.—For purposes 
of determining if a business concern that has 
been awarded a contracting opportunity as a 
small business concern is still a small business 
concern, the Administrator shall not require 
such concern to be recertified as a small busi-
ness concern more frequently than each 5 years. 
‘‘(B) GROWTH THRESHOLD.—In the case 
of any recertification described in subparagraph
(A) of a business concern, such concern shall 
not fail to be treated as a small business con-
cern for purposes of contracting opportunities 
awarded before the date of such recertification 
solely because such concern exceeds—
‘‘(i) the annual receipts standard ap-
plicable to such concern by 20 percent or 
less of such standard; or 
‘‘(ii) the number of employees stand-
ard applicable to such concern by 5 per-
cent or less of such standard. 
‘‘(b) AGENCY.—For purposes of this Act, any ref-
erence to an agency or department of the United States, 
and the term ‘Federal agency’, shall have the meaning 
given the term ‘agency’ by section 551(1) of title 5, United 
States Code, but does not include the United States Postal 
Service or the General Accounting Office. 
‘‘(c) QUALIFIED EMPLOYEE TRUSTS.—For purposes 
of this Act: 
‘‘(1) The term ‘qualified employee trust’ means, 
with respect to a small business concern, a trust—
‘‘(A) which forms part of an employee 
stock ownership plan (as defined in section 
4975(e)(7) of the Internal Revenue Code of 
1986)—
‘‘(i) which is maintained by such con-
cern; and 
‘‘(ii) which provides that each partici-
pant in the plan is entitled to direct the 
plan as to the manner in which voting 
rights under qualifying employer securities 
(as defined in section 4975(e)(8) of such 
Code) which are allocated to the account of 
such participant are to be exercised with 
respect to a corporate matter which (by 
law or charter) must be decided by a ma-
jority vote of outstanding common shares 
voted; and 
‘‘(B) in the case of any loan guarantee 
under section 7(a), the trustee of which enters 
into an agreement with the Administrator 
which is binding on the trust and on such small 
business concern and which provides that—
‘‘(i) the loan guaranteed under section 
7(a) shall be used solely for the purchase 
of qualifying employer securities of such 
concern; 
‘‘(ii) all funds acquired by the concern 
in such purchase shall be used by such
concern solely for the purposes for which 
such loan was guaranteed; 
‘‘(iii) such concern will provide such 
funds as may be necessary for the timely 
repayment of such loan, and the property 
of such concern shall be available as secu-
rity for repayment of such loan; and 
‘‘(iv) all qualifying employer securities 
acquired by such trust in such purchase 
shall be allocated to the accounts of par-
ticipants in such plan who are entitled to 
share in such allocation, and each partici-
pant has a nonforfeitable right, not later 
than the date such loan is repaid, to all 
such qualifying employer securities which 
are so allocated to the participant’s ac-
count. 
‘‘(2) Under regulations which may be pre-
scribed by the Administrator, a trust may be treated 
as a qualified employee trust with respect to a small 
business concern if—
‘‘(A) the trust is maintained by an em-
ployee organization which represents at least 51 
percent of the employees of such concern; and 
‘‘(B) such concern maintains a plan—
‘‘(i) which is an employee benefit plan 
which is designed to invest primarily in 
qualifying employer securities (as defined 
in section 4975(e)(8) of the Internal Rev-
enue Code of 1986); 
‘‘(ii) which provides that each partici-
pant in the plan is entitled to direct the 
plan as to the manner in which voting 
rights under qualifying employer securities 
which are allocated to the account of such 
participant are to be exercised with respect 
to a corporate matter which (by law or 
charter) must be decided by a majority 
vote of the outstanding common shares 
voted; 
‘‘(iii) which provides that each partici-
pant who is entitled to distribution from 
the plan has a right, in the case of quali-
fying employer securities which are not 
readily tradable on an established market, 
to require that the concern repurchase 
such securities under a fair valuation for-
mula; and 
‘‘(iv) which meets such other require-
ments (similar to requirements applicable
to employee stock ownership plans as de-
fined in section 4975(e)(7) of such Code) 
as the Administrator may prescribe; and 
‘‘(C) in the case of a loan guarantee under 
section 7(a), such organization enters into an 
agreement with the Administration which is de-
scribed in paragraph (2)(B). 
‘‘(d) QUALIFIED INDIAN TRIBE.—For purposes of 
this Act, the term ‘qualified Indian tribe’ means an Indian 
tribe as defined in section 4(e) of the Indian Self-Deter-
mination and Education Assistance Act, which owns and 
controls 100 percent of a small business concern, except 
as otherwise provided in section 8. 
‘‘(e) STATE; UNITED STATES.—For purposes of this 
Act, the terms ‘State’ and ‘United States’ include each 
of the several States, the District of Columbia, the Com-
monwealth of Puerto Rico, the United States Virgin Is-
lands, Guam, American Samoa, and the Commonwealth 
of the Northern Mariana Islands. 
‘‘(f) CONTRACTING OFFICER.—For purposes of this 
Act, the term ‘contracting officer’ has the meaning given 
such term in section 27(f)(5) of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 423(f)(5)). 
‘‘(g) SMALL BUSINESS DEVELOPMENT CENTER.—
For purposes of this Act, the term ‘small business develop-
ment center’ means any office that provides any portion 
of the services described in section 21 under such section. 
‘‘(h) CREDIT ELSEWHERE.—For purposes of this 
Act, the term ‘credit elsewhere’ means the availability of 
credit from non-Federal sources on reasonable terms and 
conditions taking into consideration the prevailing rates 
and terms in the community in or near where the concern 
transacts business, or the homeowner resides, for similar 
purposes and periods of time. 
‘‘(i) HOMEOWNERS.—For purposes of this Act, the 
term ‘homeowners’ includes owners and lessees of residen-
tial property and also includes personal property. 
‘‘(j) SMALL
AGRICULTURAL
COOPERATIVE.—For 
purposes of this Act, the term ‘small agricultural coopera-
tive’ means an association (corporate or otherwise) acting 
pursuant to the provisions of the Agricultural Marketing 
Act (12 U.S.C. 1141j), whose size does not exceed the size 
standard established by the Administrator for other simi-
lar agricultural small business concerns. In determining 
such size, the Administrator shall regard the association 
as a business concern and shall not include the income 
or employees of any member shareholder of such coopera-
tive. 
‘‘(k) DISASTER.—For purposes of this Act, the term 
‘disaster’ means a sudden event which causes severe dam-
age including floods, hurricanes, tornadoes, earthquakes, 
fires, explosions, volcanoes, windstorms, landslides or 
mudslides, tidal waves, riots, civil disorders, acts of ter-
rorism, or other catastrophes. 
‘‘(l) AGRICULTURAL ENTERPRISES.—For purposes of 
this Act, the term ‘agricultural enterprises’ means those 
businesses engaged in the production of food and fiber, 
ranching, and raising of livestock, aquaculture, and all 
other farming and agricultural related industries. 
‘‘(m) SIMPLIFIED ACQUISITION THRESHOLD.—For 
purposes of this Act, the term ‘simplified acquisition 
threshold’ has the meaning given such term in section 
4(11) of the Office of Federal Procurement Policy Act (41 
U.S.C. 403(11)). 
‘‘(n) SMALL BUSINESS CONCERN OWNED AND CON-
TROLLED BY WOMEN.—For purposes of this Act, the 
term ‘small business concern owned and controlled by 
women’ means any small business concern if—
‘‘(1) at least 51 percent of the small business 
concern is owned by one or more women or, in the 
case of any publicly owned business, at least 51 per-
cent of the stock of which is owned by one or more 
women; and
‘‘(2) the management and daily business oper-
ations of the business are controlled by one or more 
women. 
‘‘(o) DEFINITIONS OF BUNDLING OF CONTRACT RE-
QUIREMENTS AND RELATED TERMS.—For purposes of 
this Act: 
‘‘(1) BUNDLED CONTRACT.—The term ‘bundled 
contract’ means a contract that is entered into to 
meet requirements that are consolidated in a bun-
dling of contract requirements without regard to its 
designation by the procuring agency or whether a 
study of the effects of the solicitation on civilian or 
military personnel has been made. 
‘‘(2) 
BUNDLING
OF
CONTRACT
REQUIRE-
MENTS.—The term ‘bundling of contract require-
ments’ means the use of any bundling methodology 
to satisfy 2 or more requirements for goods or serv-
ices, including construction services, that have pre-
viously been provided to, or performed for, the Fed-
eral agency under 2 or more separate contracts 
lower in cost than the total cost of the contract or 
order for which the offers are solicited that is likely 
to be unsuitable for award to a small business con-
cern due to—
‘‘(A) the diversity, size, or specialized na-
ture of the elements of the performance speci-
fied; 
‘‘(B) the aggregate dollar value of the an-
ticipated award; 
‘‘(C) the geographical dispersion of the 
contract performance sites; or 
‘‘(D) any combination of the factors de-
scribed in subparagraphs (A), (B), and (C). 
‘‘(3) BUNDLING
METHODOLOGY.—The term 
‘bundling methodology’ means—
‘‘(A) a solicitation to obtain offers for a 
single contract or a multiple award contract; 
‘‘(B) a solicitation of offers for the 
issuance of a task or a delivery order under an 
existing single or multiple award contract; or 
‘‘(C) the creation of any new procurement 
requirement that permits a consolidation of 
contract requirements. 
‘‘(4) SEPARATE
SMALLER
CONTRACT.—The 
term ‘separate smaller contract’, with respect to a 
bundling of contract requirements, means a contract 
that has been performed by 1 or more small busi-
ness concerns or was suitable for award to 1 or more 
small business concerns.
‘‘(p) DEFINITIONS RELATING TO HUBZONES.—For 
purposes of this Act: 
‘‘(1) HISTORICALLY UNDERUTILIZED BUSINESS 
ZONE.—The term ‘historically underutilized business 
zone’ means any area located within 1 or more—
‘‘(A) qualified census tracts; 
‘‘(B) qualified nonmetropolitan counties; 
‘‘(C) lands within the external boundaries 
of an Indian reservation; or 
‘‘(D) redesignated areas. 
‘‘(2) HUBZONE.—The term ‘HUBZone’ means 
a historically underutilized business zone. 
‘‘(3) HUBZONE SMALL BUSINESS CONCERN.—
The term ‘HUBZone small business concern’ 
means—
‘‘(A) a small business concern that is 
owned and controlled by one or more persons, 
each of whom is a United States citizen; 
‘‘(B) a small business concern that is—
‘‘(i) an Alaska Native Corporation 
owned and controlled by Natives (as deter-
mined pursuant to section 29(e)(1) of the 
Alaska Native Claims Settlement Act (43 
U.S.C. 1626(e)(1))); or
‘‘(ii) a direct or indirect subsidiary 
corporation, joint venture, or partnership 
of an Alaska Native Corporation qualifying 
pursuant to section 29(e)(1) of the Alaska 
Native Claims Settlement Act (43 U.S.C. 
1626(e)(1)), if that subsidiary, joint ven-
ture, or partnership is owned and con-
trolled by Natives (as determined pursuant 
to section 29(e)(2)) of the Alaska Native 
Claims 
Settlement 
Act 
(43 
U.S.C. 
1626(e)(2))); 
‘‘(C) a small business concern—
‘‘(i) that is wholly owned by one or 
more Indian tribal governments, or by a 
corporation that is wholly owned by one or 
more Indian tribal governments; or 
‘‘(ii) that is owned in part by one or 
more Indian tribal governments, or by a 
corporation that is wholly owned by one or 
more Indian tribal governments, if all 
other owners are either United States citi-
zens or small business concerns; or 
‘‘(D) a small business concern that is—
‘‘(i) wholly owned by a community de-
velopment corporation that has received fi-
nancial assistance under part 1 of sub-
chapter A of the Community Economic De-
velopment Act of 1981 (42 U.S.C. 9805 et 
seq.); or 
‘‘(ii) owned in part by one or more 
community development corporations, if all 
other owners are either United States citi-
zens or small business concerns. 
‘‘(4) QUALIFIED AREAS.—
‘‘(A) QUALIFIED
CENSUS
TRACT.—The 
term ‘qualified census tract’ has the meaning 
given that term in section 42(d)(5)(C)(ii) of the 
Internal Revenue Code of 1986. 
‘‘(B) 
QUALIFIED
NONMETROPOLITAN 
COUNTY.—The term ‘qualified nonmetropolitan 
county’ means any county—
‘‘(i) that was not located in a metro-
politan statistical area (as defined in sec-
tion 143(k)(2)(B) of the Internal Revenue 
Code of 1986) at the time of the most re-
cent census taken for purposes of selecting 
qualified 
census 
tracts 
under 
section 
42(d)(5)(C)(ii) of such Code; and 
‘‘(ii) in which—
‘‘(I) the median household in-
come is less than 80 percent of the 
nonmetropolitan State median house-
hold income, based on the most recent 
data available from the Bureau of the 
Census of the Department of Com-
merce; or 
‘‘(II) the unemployment rate is 
not less than 140 percent of the 
Statewide average unemployment rate 
for the State in which the county is 
located, based on the most recent data 
available from the Secretary of Labor. 
‘‘(C) REDESIGNATED
AREA.—The term 
‘redesignated area’ means any census tract that 
ceases to be qualified under subparagraph (A) 
and any nonmetropolitan county that ceases to 
be qualified under subparagraph (B), except 
that a census tract or a nonmetropolitan county 
may be a ‘redesignated area’ only for the 3-year 
period following the date on which the census 
tract or nonmetropolitan county ceased to be so 
qualified. 
‘‘(5) QUALIFIED HUBZONE SMALL BUSINESS 
CONCERN.—
‘‘(A) IN
GENERAL.—The term ‘qualified 
HUBZone small business concern’ means any 
small business concern if the small business 
concern has certified in writing to the Adminis-
trator (or the Administrator otherwise deter-
mines, based on information submitted to the 
Administrator by the small business concern, or 
based on certification procedures, which shall be 
established by the Administration by regulation) 
that—
‘‘(i) it is a HUBZone small business 
concern—
‘‘(I) pursuant to subparagraph 
(A), (B), or (D) of paragraph (3), and 
that its principal office is located in a 
HUBZone and not fewer than 35 per-
cent of its employees reside in a 
HUBZone; or 
‘‘(II) 
pursuant 
to 
paragraph 
(3)(C), and not fewer than 35 percent 
of its employees engaged in per-
forming a contract awarded to the 
small business concern on the basis of 
a preference provided under section 
31(b) reside within any Indian res-
ervation governed by one or more of 
the tribal government owners, or re-
side within any HUBZone adjoining 
any such Indian reservation; 
‘‘(ii) the small business concern will 
attempt to maintain the applicable employ-
ment percentage under clause (i) during 
the performance of any contract awarded 
to the small business concern on the basis 
of a preference provided under section 
31(b); and 
‘‘(iii) with respect to any subcontract 
entered into by the small business concern 
pursuant to a contract awarded to the 
small business concern under section 31, 
the small business concern will ensure 
that—
‘‘(I) in the case of a contract for 
services (except construction), not less 
than 50 percent of the cost of con-
tract performance incurred for per-
sonnel will be expended for its employ-
ees 
or 
for 
employees 
of 
other 
HUBZone small business concerns;
‘‘(II) in the case of a contract for 
procurement of supplies (other than 
procurement from a regular dealer in 
such supplies), not less than 50 per-
cent of the cost of manufacturing the 
supplies (not including the cost of ma-
terials) will be incurred in connection 
with the performance of the contract 
in a HUBZone by 1 or more 
HUBZone small business concerns; 
‘‘(III) it is a small business con-
cern, the majority of which is owned 
and controlled by one or more individ-
uals determined by the Administrator 
to be economically disadvantaged in 
accordance with section 8(a)(6); and 
‘‘(IV) it has received a site visit 
from a district counsel to verify its eli-
gibility before first responding to a so-
licitation from a Federal agency for 
goods or services under section 31 and 
again before first responding to a so-
licitation from a Federal agency for 
goods or services under section 31
after any change in the primary loca-
tion of the concern. 
‘‘(B) SITE
VISITS
BY
DISTRICT
COUN-
SEL.—A district counsel, not later than 5 days 
after conducting any site visit described in sub-
paragraph (A)(iii)(IV), shall make a certifi-
cation regarding the status of the concern as a 
qualified HUBZone small business concern. 
‘‘(C) PROVISION
OF
FALSE
INFORMA-
TION.—Such term shall not include any small 
business concern if any certification made or in-
formation provided by such concern under sub-
paragraph (A) has been, in accordance with the 
procedures established under section 31(c)(1)—
‘‘(i) successfully challenged by an in-
terested party; or 
‘‘(ii) otherwise determined by the Ad-
ministrator to be materially false. 
‘‘(D) PERCENTAGE
ADJUSTMENTS.—The 
Administrator may utilize a percentage other 
than the percentage specified in subclause (I) 
or (II) of subparagraph (A)(iii), if the Adminis-
trator determines that such action is necessary 
to reflect conventional industry practices among 
small business concerns that are below the nu-
merical size standard for businesses in that in-
dustry category. 
‘‘(E) CONSTRUCTION
AND
OTHER
CON-
TRACTS.—The Administrator shall promulgate 
final regulations imposing requirements that 
are similar to those specified in subclauses (I) 
and (II) of subparagraph (A)(iii) on contracts 
for general and specialty construction, and on 
contracts for any other industry category that 
would not otherwise be subject to those require-
ments. The percentage applicable to any such 
requirement shall be determined in accordance 
with subparagraph (C). 
‘‘(6) NATIVE AMERICAN SMALL BUSINESS CON-
CERNS.—
‘‘(A) ALASKA NATIVE CORPORATION.—The 
term ‘Alaska Native Corporation’ has the same 
meaning as the term ‘Native Corporation’ in 
section 3 of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1602). 
‘‘(B) ALASKA NATIVE VILLAGE.—The term 
‘Alaska Native Village’ has the same meaning 
as the term ‘Native village’ in section 3 of the 
Alaska Native Claims Settlement Act (43 
U.S.C. 1602).
‘‘(C) INDIAN
RESERVATION.—The term 
‘Indian reservation’—
‘‘(i) has the same meaning as the 
term ‘Indian country’ in section 1151 of 
title 18, United States Code, except that 
such term does not include—
‘‘(I) any lands that are located 
within a State in which a tribe did not 
exercise governmental jurisdiction on 
December 21, 2000, unless that tribe 
is recognized after that date by either 
an Act of Congress or pursuant to 
regulations of the Secretary of the In-
terior; and 
‘‘(II) lands taken into trust or 
acquired by an Indian tribe after De-
cember 21, 2000, if such lands are 
not located within the external bound-
aries of an Indian reservation or 
former reservation or are not contig-
uous to the lands held in trust or re-
stricted status on that date of the en-
actment; and 
‘‘(ii) in the State of Oklahoma, means 
lands that—
‘‘(I) are within the jurisdictional 
areas of an Oklahoma Indian tribe (as 
determined by the Secretary of the In-
terior); and 
‘‘(II) are recognized by the Sec-
retary of the Interior as eligible for 
trust land status under part 151 of 
title 25, Code of Federal Regulations 
(as in effect on December 21, 2000). 
‘‘(q) DEFINITIONS RELATING TO VETERANS.—For 
purposes of this Act: 
‘‘(1) SERVICE-DISABLED VETERAN.—The term 
‘service-disabled veteran’ means a veteran with a 
disability that is service-connected (as defined in sec-
tion 101(16) of title 38, United States Code). 
‘‘(2) SMALL BUSINESS CONCERN OWNED AND 
CONTROLLED
BY
SERVICE-DISABLED
VETERANS.—
The term ‘small business concern owned and con-
trolled by service-disabled veterans’ means a small 
business concern—
‘‘(A) not less than 51 percent of which is 
owned by one or more service-disabled veterans 
or, in the case of any publicly owned business, 
not less than 51 percent of the stock of which
is owned by one or more service-disabled vet-
erans; and 
‘‘(B) the management and daily business 
operations of which are controlled by one or 
more service-disabled veterans or, in the case of 
a veteran with permanent and severe disability, 
the spouse or permanent caregiver of such vet-
eran. 
‘‘(3) SMALL BUSINESS CONCERN OWNED AND 
CONTROLLED BY VETERANS.—The term ‘small busi-
ness concern owned and controlled by veterans’ 
means a small business concern—
‘‘(A) not less than 51 percent of which is 
owned by one or more veterans or, in the case 
of any publicly owned business, not less than 51 
percent of the stock of which is owned by one 
or more veterans; and 
‘‘(B) the management and daily business 
operations of which are controlled by one or 
more veterans. 
‘‘(4) VETERAN.—The term ‘veteran’ has the 
meaning given the term in section 101(2) of title 38, 
United States Code.
‘‘(r) SMALL MANUFACTURER.—For purposes of this 
Act, the term ‘small manufacturer’ means any small busi-
ness concern if—
‘‘(1) the primary business of the concern is 
classified in sector 31, 32, or 33 of the North Amer-
ican Industrial Classification System; and 
‘‘(2) all of its facilities that are used for pro-
duction are located in the United States. 
‘‘(s) SMALL BUSINESS LENDING COMPANY.—For 
purposes of this Act, the term ‘small business lending com-
pany’ means a business concern that is authorized by the 
Administrator to make loans pursuant to section 7(a) and 
whose lending activities are not subject to regulation by 
any Federal or State regulatory agency. 
‘‘(t) NON-FEDERALLY
REGULATED
SBA LEND-
ERS.—For purposes of this Act, the term ‘Non-Federally 
regulated SBA lenders’ means a business concern if—
‘‘(1) such concern is authorized by the Adminis-
trator to make loans under section 7; 
‘‘(2) such concern is subject to regulation by a 
State; and 
‘‘(3) the lending activities of such concern are 
not regulated by any Federal banking authority. 
‘‘(u) PROCUREMENT CENTER REPRESENTATIVE.—
For purposes of this Act, the term ‘procurement center
representative’ means an employee of the Administration 
whose sole responsibility is to perform the functions re-
ferred to in section 15(l). 
‘‘(v) COMMERCIAL MARKETING REPRESENTATIVE.—
For purposes of this Act, the term ‘commercial marketing 
representative’ means an employee of the Administration 
whose sole responsibility is to perform the functions re-
ferred to in section 8(d). 
‘‘(w) TEAM.—For purposes of this Act, the term 
‘team’ means two or more small business concerns who 
respond together to a solicitation, as one entity, for the 
purposes of providing goods or services to a Federal agen-
cy. A team shall be considered a small business concern 
provided that each member of the team is a small business 
concern.’’. 
SEC. 204. SMALL BUSINESS ADMINISTRATION. 
(a) IN GENERAL.—Section 4 of the Small Business 
Act (15 U.S.C. 633) is amended to read as follows: 
‘‘SEC. 4. SMALL BUSINESS ADMINISTRATION. 
‘‘(a) ESTABLISHMENT.—In order to carry out the 
policies of this Act, there is an agency known as the ‘Small 
Business Administration’ (also referred to in this Act as 
the Administration), which Administration shall be under 
the general direction and supervision of the President and 
shall not be affiliated with or be within any other agency
or department of the Federal Government. The principal 
office of the Administration shall be located in the District 
of Columbia. 
‘‘(b) APPOINTMENT OF ADMINISTRATOR AND DEP-
UTY ADMINISTRATOR.—
‘‘(1) ADMINISTRATOR.—The management of 
the Administration shall be vested in an Adminis-
trator who shall be appointed from civilian life by 
the President, by and with the advice and consent 
of the Senate, and who shall be a person of out-
standing qualifications known to be familiar and 
sympathetic with the needs and problems of small 
business concerns. The Administrator shall not en-
gage in any other business, vocation, or employment 
other than that of serving as Administrator. 
‘‘(2) DEPUTY ADMINISTRATOR.—The President 
shall appoint, by and with the advice and consent of 
the Senate, a Deputy Administrator, whose principal 
function shall be to assist the Administrator in the 
daily management of the Administration. 
‘‘(c) POWERS OF THE ADMINISTRATOR.—
‘‘(1) USE OF SEAL.—The Administrator may 
adopt, alter, and use a seal, which shall be judicially 
noticed.
‘‘(2) SUE AND BE SUED.—The Administrator 
may sue and be sued in any court of record of a 
State having general jurisdiction, or in any United 
States district court, and jurisdiction is conferred 
upon such district court to determine such con-
troversies without regard to the amount in con-
troversy; but no attachment, garnishment, or other 
similar process, mesne or final, shall be issued 
against the Administrator or his property. 
‘‘(3) RULES AND REGULATIONS.—The Adminis-
trator may make such rules and regulations as he 
deems necessary to carry out this Act. Any such 
rules or regulations, other than those relating to 
agency management or personnel, shall be issued 
pursuant to section 553(b) of title 5, United States 
Code. 
‘‘(4) FACILITIES
AND
STAFF
OF
FEDERAL 
AGENCIES.—Upon request of the Administrator, the 
head of any Federal department or agency may pro-
vide, on a reimbursable or nonreimbursable basis, in-
formation, services, facilities (including any field 
service thereof), or any of the personnel of that de-
partment or agency to the Administrator to assist in 
carrying out this Act and the Small Business Invest-
ment Act of 1958.
‘‘(5) INVESTIGATIONS; SUBPOENAS.—
‘‘(A) 
INVESTIGATIONS.—The 
Adminis-
trator may make such investigations as the Ad-
ministrator deems necessary to determine 
whether a recipient of or participant in any as-
sistance under this Act or any other person has 
engaged, or is about to engage, in any acts or 
practices which constitute, or will constitute, a 
violation of any provision of this Act, or of any 
rule or regulation under this Act, or of any 
order issued under this Act. 
‘‘(B) STATEMENTS.—The Administrator 
shall permit any person to file with it a state-
ment in writing, under oath or otherwise as the 
Administrator shall determine, as to all the 
facts and circumstances concerning the matter 
to be investigated. 
‘‘(C) SUBPOENAS.—For the purpose of any 
investigation, the Administrator may administer 
oaths and affirmations, subpoena witnesses, 
compel their attendance, take evidence, and re-
quire the production of any books, papers, and 
documents which are relevant to the inquiry. 
Such attendance of witnesses and the produc-
tion of any such records may be required from 
any place in the United States. 
‘‘(D) CONTEMPT PROCEEDINGS.—In case 
of contumacy by, or refusal to obey a subpoena 
issued to, any person, including a recipient or 
participant, the Administrator may invoke the 
aid of any court of the United States within the 
jurisdiction of which such investigation or pro-
ceeding is carried on, or where such person re-
sides or carries on business, in requiring the at-
tendance and testimony of witnesses and the 
production of books, papers, and documents; 
and such court may issue an order requiring 
such person to appear before the Administrator, 
there to produce records, if so ordered, or to 
give testimony touching the matter under inves-
tigation. Any failure to obey such order of the 
court may be punished by such court as a con-
tempt thereof. All process in any such case may 
be served in the judicial district whereof such 
person is an inhabitant or wherever he may be 
found. 
‘‘(6) GIFTS.—
‘‘(A) IN
GENERAL.—The Administrator 
may solicit, accept, hold, administer, and utilize
gifts, devises, bequests, and temporary use of 
property, both real and personal, and donations 
of personal services for the purpose of aiding or 
facilitating the Administrator in providing 
training to persons, employees, small business 
concerns and small manufacturers, and tech-
nical assistance to small business concerns and 
small manufacturers. 
‘‘(B) AUDITS.—Any such gifts, devises, or 
bequests of property shall be held in a separate 
account and shall be subject to quarterly audits 
by the Inspector General of the Administration 
who shall report quarterly to the Congress on 
the Administrator’s use of such gifts, bequests, 
devises, and donations of personal services in-
cluding an assessment of whether such gifts, 
bequests, devises, and personal services have 
advanced the purposes of this Act. 
‘‘(C) CONFLICTS OF INTEREST.—No em-
ployee of the Administration may accept or so-
licit any gift, bequest, devise, or donation of 
personal services if such acceptance or solicita-
tion would, in the opinion of the General Coun-
sel, create a conflict of interest.
‘‘(D) ACCEPTANCE OF SERVICES AND FACILI-
TIES FOR DISASTER LOAN PROGRAM.—The Adminis-
trator may accept the services and facilities of Fed-
eral, State, and local agencies and groups, both pub-
lic and private, and utilize such gratuitous services 
and facilities as may, from time to time, be nec-
essary, to further the objectives of section 7(b). 
Paragraph (6)(B) shall not apply to any services or 
facilities accepted under this subparagraph. 
‘‘(7) CO-SPONSORSHIP OF EVENTS.—
‘‘(A) 
AUTHORIZATION.—The 
Adminis-
trator, after consultation with the General 
Counsel, may permit any eligible donor of any 
gift, bequest, devise, or donation of personal 
services to be a named cosponsor of any event 
conducted by the Administrator or any publica-
tion of the Administrator. 
‘‘(B) ELIGIBLE DONOR.—For purposes of 
this paragraph, the term ‘eligible donor’ means, 
with respect to any event or publication, any 
donor if such donor provides, directly or in-
kind, at least 50 percent of the cost of such 
event or publication. provided further that any 
such co-sponsorship must be approved by an
Associate Administrator, after consultation with 
the General Counsel. 
‘‘(C) LIMITED DELEGATION.—The Admin-
istrator may not delegate the authority de-
scribed in subparagraph (A) except to the Dep-
uty Administrator or any Associate Adminis-
trator. 
‘‘(D) REPORT TO CONGRESS.—The Inspec-
tor General of the Administration shall report 
semi-annually to Congress on the Administra-
tor’s use of co-sponsorship. Such report shall 
include the Inspector General’s assessment of 
whether such co-sponsorships have advanced 
the purposes of this Act. 
‘‘(d) OTHER PROVISIONS.—
‘‘(1) REQUIREMENTS
FOR
ASSISTANCE.—No 
loan shall be made or equipment, facilities, or serv-
ices furnished by the Administrator under this Act 
to any business concern unless the owners, partners, 
or officers of such business concern—
‘‘(A) certify to the Administrator the 
names of any attorneys, agents, or other per-
sons engaged by or on behalf of such business 
enterprise for the purpose of expediting applica-
tions made to the Administrator for assistance
of any sort, and the fees paid or to be paid to 
any such persons; 
‘‘(B) execute an agreement binding any 
such business concern for a period of two years 
after any assistance is rendered by the Admin-
istrator to such business concern, to refrain 
from employing, tendering any office or employ-
ment to, or retaining for professional services, 
any person who, on the date such assistance or 
any part thereof was rendered, or within one 
year prior thereto, shall have served as an offi-
cer, attorney, agent, or employee of the Admin-
istration occupying a position or engaging in 
activities which the Administrator shall have de-
termined involve discretion with respect to the 
granting of assistance under this Act; and 
‘‘(C) furnish the names of lending institu-
tions to which such business enterprise has ap-
plied for loans together with dates, amounts, 
terms, and proof of refusal. 
‘‘(2) AUTHORITY RELATING TO TRANSFER OF 
FUNCTIONS.—The President may transfer to the Ad-
ministrator any functions, powers, and duties of any 
department or agency which relate primarily to 
small business problems. In connection with any
such transfer, the President may provide for appro-
priate transfers of records, property, necessary per-
sonnel, and unexpended balances of appropriations 
and other funds available to the department or agen-
cy from which the transfer is made. 
‘‘(3) FAIR CHARGES.—To the fullest extent the 
Administrator deems practicable, he shall make a 
fair charge for the use of Government-owned prop-
erty and make and let contracts on a basis that will 
result in a recovery of the direct costs incurred by 
the Administrator. 
‘‘(4) NON-DUPLICATION.—The Administrator 
shall not duplicate the work or activity of any other 
department or agency of the Federal Government. 
Nothing contained in this Act shall be construed to 
authorize any such duplication unless such work or 
activity is expressly provided for in this Act. If loan 
applications are being refused or loans denied by 
such other department or agency responsible for 
such work or activity due to administrative with-
holding from obligation or withholding from appor-
tionment, or due to administratively declared mora-
torium, then, for purposes of this section, no dupli-
cation shall be deemed to have occurred.
‘‘(5) PREPAYMENT OF RENTALS.—Subsections 
(a) and (b) of section 3324 of title 31, United States 
Code, shall not apply to prepayments of rentals 
made by the Administration on safety deposit boxes 
used by the Administration for the safeguarding of 
instruments held as security for loans or for the 
safeguarding of other documents. 
‘‘(6) NONDISCRIMINATION.—In carrying out 
this Act and the Small Business Investment Act of 
1958, the Administrator shall not discriminate on 
the basis of sex or marital status against any person 
or small business concern applying for or receiving 
assistance from the Administrator. 
‘‘(7) GROUPS
RECEIVING
SPECIAL
CONSIDER-
ATION.—In providing assistance under this Act and 
the Small Business Investment Act of 1958, the Ad-
ministrator shall give special consideration to—
‘‘(A) veterans of the Armed Forces of the 
United States and their survivors or depend-
ents; and 
‘‘(B) small manufacturers. 
‘‘(8) UNLAWFUL
RESIDENTS.—None of the 
funds made available pursuant to this Act may be 
used to provide any direct benefit or assistance to 
any individual in the United States if the Adminis-
trator or the official to which the funds are made 
available receives notification that the individual is 
not lawfully within the United States. 
‘‘(9) OBSCENE PRODUCTS AND SERVICES.—The 
Administrator is prohibited from providing any fi-
nancial or other assistance to any business concern 
or other person engaged in the production or dis-
tribution of any product or service that has been de-
termined to be obscene by a court of competent ju-
risdiction. 
‘‘(10) ECONOMIC DATABASE; INDICES AND RE-
PORTS.—The Administrator shall—
‘‘(A) establish and maintain an external 
small business economic data base for the pur-
pose of providing the Congress and the Presi-
dent information on the economic condition and 
the expansion or contraction of the small busi-
ness sector; 
‘‘(B) publish on a regular basis national 
small business economic indices and, to the ex-
tent feasible, regional small business economic 
indices, which shall include data on—
‘‘(i) employment, layoffs, and new 
hires;
as reflected by the data acquired pursuant to 
subparagraph (A).’’. 
(b) RELATED REPEALS.—
(1) Section 12 of the Small Business Act (15 
U.S.C. 641) is amended to read as follows: 
‘‘SEC. 12. [ RESERVED. ]’’. 
(2) Section 13 of the Small Business Act (15 
U.S.C. 642) is amended to read as follows: 
‘‘SEC. 13. [ RESERVED. ]’’. 
(3) Section 14 of the Small Business Act (15 
U.S.C. 643) is amended to read as follows: 
‘‘SEC. 14. [ RESERVED. ]’’. 
(4) Section 18 of the Small Business Act (15 
U.S.C. 647) is amended to read as follows: 
‘‘SEC. 18. [ RESERVED. ]’’. 
SEC. 205. FINANCIAL MANAGEMENT. 
(a) IN GENERAL.—Section 5 of the Small Business 
Act (15 U.S.C. 634) is amended to read as follows: 
‘‘SEC. 5. FINANCIAL MANAGEMENT. 
‘‘(a) ACCOUNTS.—
‘‘(1) IN
GENERAL.—All repayments of loans, 
debentures, payments of interest and other receipts 
arising out of transactions heretofore or hereafter 
entered into by the Administrator shall be deposited
into appropriate accounts and funds as determined 
by the Administrator. 
‘‘(2) REPORT
AND
BUDGET.—The Adminis-
trator shall submit to the Committees on Appropria-
tions, the Committee on Small Business and Entre-
preneurship of the Senate, and the Committee on 
Small Business of the House of Representatives, as 
soon as possible after the beginning of each calendar 
quarter a full and complete report on the status of 
each of the accounts and funds referred to in para-
graph (1). Business-type budgets for each of the ac-
counts and funds referred to in paragraph (1) shall 
be prepared, transmitted to the Committees on Ap-
propriations, the Committee on Small Business and 
Entrepreneurship of the Senate, and the Committee 
on Small Business of the House of Representatives, 
and considered, and enacted in the manner pre-
scribed by for wholly owned Government corpora-
tions under sections 9103 and 9104 of title 31, 
United States Code. 
‘‘(4) ISSUANCE OF NOTES.—
‘‘(A) ISSUANCE.—The Administrator may 
issue notes to the Secretary of the Treasury for 
the purpose of obtaining funds necessary for 
discharging obligations under the accounts and
funds referred to in paragraph (1) and for au-
thorized expenditures out of the accounts and 
funds. 
‘‘(B) FORM.—The notes authorized by this 
paragraph shall be in such form and denomina-
tions and have such maturities and be subject 
to such terms and conditions as may be pre-
scribed by the Administrator with the approval 
of the Secretary of the Treasury. 
‘‘(C) INTEREST RATE.—Such notes shall 
bear interest at a rate fixed by the Secretary of 
the Treasury, taking into consideration the cur-
rent average market yield of outstanding mar-
ketable obligations of the United States having 
maturities comparable to the notes issued by 
the Administration under this paragraph. 
‘‘(D) PURCHASE BY TREASURY.—The Sec-
retary of the Treasury shall purchase any notes 
of the Administration issued under paragraph 
(1). For purposes of purchasing such notes, the 
Secretary of the Treasury may use as a public 
debt transaction the proceeds from the sale of 
any securities issued under chapter 31 of title 
31, United States Code. The purposes for which 
such securities may be issued under such chap-
ter are extended to include the purchase of 
notes issued by the Administrator under para-
graph (1). All redemptions, purchases, and 
sales by the Secretary of the Treasury of such 
notes shall be treated as public debt trans-
actions of the United States. 
‘‘(5) PAYMENTS TO TREASURY.—
‘‘(A) EXCESS FUNDS.—Moneys in any ac-
count or fund referred to in paragraph (1) 
which are not needed for current operations 
shall remain in such account or fund and shall 
be available solely to carry out the provisions 
and purposes of programs operated from such 
account or fund pursuant to law as provided in 
appropriations Acts. 
‘‘(B) ACTUAL
INTEREST.—Following the 
close of each fiscal year, the Administrator shall 
pay into the miscellaneous receipts of the 
United States Treasury the actual interest that 
the Administrator collects during that fiscal 
year on all financings made under this Act. 
‘‘(C) OTHER INTEREST.—Except on those 
loan disbursements on which interest is paid 
under subparagraph (B), the Administration 
shall pay into miscellaneous receipts of the
Treasury, following the close of each fiscal year, 
interest received by the Administration on fi-
nancing functions performed under this Act and 
titles III and V of the Small Business Invest-
ment Act of 1958 if the capital used to perform 
such functions originated from appropriated 
funds. Such payments shall be treated by the 
Department of the Treasury as interest income, 
not as retirement of indebtedness. 
‘‘(6) CONTRIBUTIONS
TO
EMPLOYEES
COM-
PENSATION
FUND.—The Administrator shall con-
tribute to the employee’s compensation fund, on the 
basis of annual billings as determined by the Sec-
retary of Labor, for the benefit payments made from 
such fund on account of employees engaged in car-
rying out functions financed by the accounts and 
funds referred to in paragraph (1). The annual bil-
lings shall also include a statement of the fair por-
tion of the cost of the administration of such funds, 
which shall be paid by the Administrator into the 
Treasury as miscellaneous receipts. 
‘‘(7) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated, in any fis-
cal year, such sums as may be necessary for losses 
and interest subsidies incurred by the accounts and
funds referred to in paragraph (1) and not pre-
viously reimbursed. All borrowing authority con-
tained in this subsection shall be effective only to 
such extent or in such amounts as are provided in 
advance in appropriation Acts. 
‘‘(b) FINANCIAL MANAGEMENT POWERS.—
‘‘(1) SALE OF FINANCINGS, ETC.—The Admin-
istrator, under regulations prescribed by him, may 
assign or sell at public or private sale, or otherwise 
dispose of for cash or credit, in his discretion and 
upon such terms and conditions and for such consid-
eration as he shall determine to be reasonable, any 
evidence of debt, contract, claim, personal property, 
or security assigned to or held by him in connection 
with the payment of loans granted under this Act, 
and to collect or compromise all obligations assigned 
to or held by him and all legal or equitable rights 
accruing to him in connection with the payment of 
such loans until such time as such obligations may 
be referred to the Attorney General for suit or col-
lection. 
‘‘(2) USE
OF
FEDERAL
RESERVE
DEPOSI-
TORIES.—All moneys of the Administrator not oth-
erwise employed may be deposited with the Treasury 
of the United States subject to check by authority
100
of the Administrator. The Federal Reserve banks 
are authorized and directed to act as depositaries, 
custodians, and fiscal agents for the Administrator 
in the general performance of its powers conferred 
by this Act. Any banks insured by the Federal De-
posit Insurance Corporation, when designated by the 
Secretary of the Treasury, shall act as custodians 
and financial agents for the Administrator. Each 
Federal Reserve bank, when designated by the Ad-
ministrator as fiscal agent for the Administrator, 
shall be entitled to be reimbursed for all expenses in-
curred as such fiscal agent. 
‘‘(3) REAL PROPERTY.—
‘‘(A) CONVEYANCE.—The Administrator 
may convey and execute in the name of the Ad-
ministration deeds of conveyance, deeds of re-
lease, assignments and satisfactions of mort-
gages, and any other written instrument relat-
ing to real property or any interest therein ac-
quired by the Administrator pursuant to the 
provisions of this Act. Such authority may be 
exercised by the Administrator or by any officer 
or agent appointed by him without the execu-
tion of any express delegation of power or 
power of attorney.
101
‘‘(B) OTHER AUTHORITY.—The Adminis-
trator may deal with, complete, renovate, im-
prove, modernize, insure, or rent, or sell for 
cash or credit upon such terms and conditions 
and for such consideration as the Administrator 
shall determine to be reasonable, any real prop-
erty conveyed to or otherwise acquired by him 
in connection with the payment of loans grant-
ed under this Act. 
‘‘(4) COLLECTIONS.—The Administrator may 
pursue to final collection, by way of compromise or 
otherwise, all claims against third parties assigned 
to the Administrator in connection with loans made 
by him, including by obtaining deficiency judgments 
or otherwise in the case of mortgages assigned to 
the Administrator. 
‘‘(5) ACQUISITION OF PROPERTY.—The Admin-
istrator may acquire, in any lawful manner, any 
property (real, personal, or mixed, tangible or intan-
gible), whenever deemed necessary or appropriate to 
the conduct of the activities authorized in subsection 
(a) or (b) of section 7. 
‘‘(6) POWER OF ATTORNEY.—Nothing in this 
section shall prevent the Administrator from dele-
gating any authority provided under this section by
102
power of attorney to any officer or agent he may ap-
point. 
‘‘(c) SALE OF GUARANTEED LOANS BY LENDERS.—
‘‘(1) IN GENERAL.—The guaranteed portion of 
any loan made pursuant to this Act may be sold by 
the lender, and by any subsequent holder, consistent 
with regulations on such sales as the Administrator 
shall establish, subject to the following limitations: 
‘‘(A) Prior to the approval of the sale, or 
upon any subsequent sale, of any loan guaran-
teed by the Administrator, if the lender certifies 
that such loan has been properly closed and 
that the lender has substantially complied with 
the provisions of the guarantee agreement and 
the regulations of the Administrator, the Ad-
ministrator shall review and approve only mate-
rials not previously approved. 
‘‘(B) All fees due the Administrator on a 
guaranteed loan shall have been paid in full 
prior to any sale. 
‘‘(C) Each loan, except each loan made 
under section 7(a)(14), shall have been fully 
disbursed to the borrower prior to any sale. 
‘‘(2) TREATMENT
IN
SECONDARY
MARKET.—
After a loan is sold in the secondary market, the
103
lender shall remain obligated under its guarantee 
agreement with the Administrator, and shall con-
tinue to service the loan in a manner consistent with 
the terms and conditions of such agreement. 
‘‘(3) PROCEDURES.—The Administrator shall 
develop such procedures as are necessary for: 
‘‘(A) The facilitation, administration, and 
promotion of secondary market operations. 
‘‘(B) Assessing the increase of small busi-
ness access to capital at reasonable rates and 
terms as a result of secondary market oper-
ations. 
‘‘(4) CERTAIN REGULATIONS REQUIRED.—The 
unguaranteed portion of any loan made under sec-
tion 7(a) shall not be sold unless a final regulation 
promulgated by the Administrator is in effect that 
applies uniformly to both depository institutions and 
other lenders and sets forth the terms and condi-
tions under which such sales can be permitted, in-
cluding maintenance of appropriate reserve require-
ments and other safeguards to protect the safety 
and soundness of the program. 
‘‘(5) PREPAYMENTS.—Nothing in this sub-
section or subsection (d) shall be interpreted to im-
pede or extinguish the right of the borrower or the
104
successor in interest to such borrower to prepay (in 
whole or in part) any loan made pursuant to section 
7(a), the guaranteed portion of which may be in-
cluded in such trust or pool, or to impede or extin-
guish the rights of any party pursuant to subsection 
(f)(3). 
‘‘(d) ISSUANCE OF TRUST CERTIFICATES.—
‘‘(1) IN
GENERAL.—The Administrator may 
issue trust certificates representing ownership of all 
or a fractional part of the guaranteed portion of one 
or more loans which have been guaranteed by the 
Administration under this Act, or under section 502 
of the Small Business Investment Act of 1958. Such 
trust certificates shall be based on and backed by a 
trust or pool approved by the Administrator and 
composed solely of the entire guaranteed portion of 
such loans. 
‘‘(2) GUARANTEE.—
‘‘(A) 
AUTHORIZATION.—The 
Adminis-
trator is authorized, upon such terms and con-
ditions as are deemed appropriate, to guarantee 
the timely payment of the principal of and in-
terest on trust certificates issued by the Admin-
istrator or its agent for purposes of this sub-
section. Such guarantee shall be limited to the
105
extent of principal and interest on the guaran-
teed portions of loans which compose the trust 
or pool. The full faith and credit of the United 
States is pledged to the payment of all amounts 
which may be required to be paid under any 
guarantee of such trust certificates issued by 
the Administrator or its agent pursuant to this 
subsection. 
‘‘(B) PREPAYMENT.—In the event that a 
loan in such trust or pool is prepaid, either vol-
untarily or in the event of default, the guar-
antee of timely payment of principal and inter-
est on the trust certificates shall be reduced in 
proportion to the amount of principal and inter-
est such prepaid loan represents in the trust or 
pool. 
‘‘(C) INTEREST; 
REDEMPTION.—Interest 
on prepaid or defaulted loans shall accrue and 
be guaranteed by the Administrator only 
through the date of payment on the guarantee. 
During the term of the trust certificate, it may 
be called for redemption due to prepayment or 
default of all loans constituting the pool. 
‘‘(3) FEES.—
106
‘‘(A) IN
GENERAL.—The Administrator 
may collect a fee for any loan guarantee sold 
into the secondary market under subsection (c) 
in an amount equal to not more than 50 per-
cent of the portion of the sale price that exceeds 
110 percent of the outstanding principal 
amount of the portion of the loan guaranteed 
by the Administrator. 
‘‘(B) COLLECTION.—Any such fee imposed 
by the Administrator shall be collected by the 
Administrator or by the agent which carries out 
on behalf of the Administrator the central reg-
istration functions required by subsection (e) 
and shall be paid to the Administrator and used 
solely to reduce the subsidy on loans guaran-
teed under section 7(a). Any such fee shall not 
be charged to the borrower whose loan is guar-
anteed. Nothing in this paragraph shall pre-
clude any agent of the Administrator from col-
lecting a fee approved by the Administrator for 
the functions described in subsection (e). 
‘‘(C) LATE FEES.—The Administrator is 
authorized to impose and collect, either directly 
or through a fiscal and transfer agent, a rea-
sonable penalty on late payments of the fee au-
107
thorized under subparagraph (A) in an amount 
not to exceed 5 percent of such fee per month 
plus interest. 
‘‘(4) SUBROGATION.—In the event the Adminis-
trator pays a claim under a guarantee issued under 
this subsection, it shall be subrogated fully to the 
rights satisfied by such payment. 
‘‘(5) LAWS SUPERSEDED.—No federal, state, or 
local law, shall preclude or limit the exercise by the 
Administrator of its ownership rights in the portions 
of loans constituting the trust or pool against which 
the trust certificates are issued. 
‘‘(e) CENTRAL REGISTRY
OF LOANS
AND TRUST 
CERTIFICATES.—
‘‘(1) ESTABLISHMENT.—Upon the adoption of 
final rules and regulations, the Administrator 
shall—
‘‘(A) provide for a central registration of 
all loans and trust certificates sold pursuant to 
subsections (c) and (d); 
‘‘(B) contract with an agent to carry out 
on behalf of the Administrator the central reg-
istration functions of this subsection and the 
issuance of trust certificates to facilitate pool-
ing;
108
‘‘(C) prior to any sale, require the seller to 
disclose to a purchaser of the guaranteed por-
tion of a loan guaranteed under this Act, and 
to the purchaser of a trust certificate issued 
pursuant to subsection (d), information on the 
terms, conditions, and yield of such instrument; 
and 
‘‘(D) have the authority to regulate bro-
kers and dealers in guaranteed loans and trust 
certificates sold pursuant to subsections (c) and 
(d). 
‘‘(2) BONDING REQUIREMENT.—The agent re-
ferred to in paragraph (1)(B) shall provide a fidelity 
bond or insurance in such amounts as the Adminis-
trator determines to be necessary to fully protect the 
interest of the Government. 
‘‘(3) SELLER.—For purposes of this subsection, 
the term ‘seller’, with respect to the sale of any loan, 
does not include the entity which made the loan or 
any individual or entity which sells three or fewer 
guaranteed loans per year. 
‘‘(4) BOOK-ENTRY
SYSTEM.—Nothing in this 
subsection shall prohibit the utilization of a book-
entry or other electronic form of registration for 
trust certificates. The Administrator may, with the
109
consent of the Secretary of the Treasury, use the 
book-entry system of the Federal Reserve System. 
‘‘(5) AGENT
FEES.—The Administrator may 
compensate an agent described in paragraph (1)(B) 
through transaction and servicing fees charged to 
program users and through interest earnings on pay-
ments under the agent’s control. 
‘‘(f) OTHER SPECIAL RULES AND AUTHORITIES RE-
LATED TO LOAN PROGRAMS.—
‘‘(1) IN
GENERAL.—The Administrator may 
take any and all actions (including the procurement 
of the services of attorneys by contract in any office 
where an attorney or attorneys are not or cannot be 
economically employed full time to render such serv-
ices) when he determines such actions are necessary 
or desirable in making, servicing, compromising, 
modifying, liquidating, or otherwise dealing with or 
realizing on loans made under the provisions of this 
Act. With respect to deferred participation loans, the 
Administrator may, in the discretion of and pursu-
ant to regulations promulgated by the Adminis-
trator, authorize participating lending institutions to 
take actions relating to loan servicing on behalf of 
the Administrator, including determining eligibility
110
and creditworthiness and loan monitoring, collection, 
and liquidation. 
‘‘(2) FEES.—The Administrator may impose, 
retain, and use only those fees which are specifically 
authorized by law or which are in effect on Sep-
tember 30, 1994, and in the amounts and at the 
rates in effect on such date, except that the Admin-
istrator may, subject to approval in appropriations 
Acts, impose, retain, and utilize, additional fees—
‘‘(A) not to exceed $100 for each loan 
servicing action (other than a loan assumption) 
requested after disbursement of the loan, in-
cluding any substitution of collateral, release or 
substitution of a guarantor, reamortization, or 
similar action; 
‘‘(B) not to exceed $300 for loan assump-
tions; 
‘‘(C) not to exceed 1 percent of the amount 
of requested financings under title III of the 
Small Business Investment Act of 1958 for 
which the applicant requests a commitment 
from the Administration for funding during the 
following year; and 
‘‘(D) to recover the direct, incremental cost 
involved in the production and dissemination of
111
compilations of information produced by the 
Administrator under the authority of this Act 
and the Small Business Investment Act of 
1958; and 
‘‘(E) collect, retain and utilize, subject to 
approval in appropriations Acts, any amounts 
collected by fiscal transfer agents and not used 
by such agent as payment of the cost of loan 
pooling or debenture servicing operations, ex-
cept that amounts collected under this sub-
section shall be utilized solely to facilitate the 
administration of the program that generated 
the excess amounts. 
‘‘(3) POWER
TO
UNDERTAKE
AND
SUSPEND 
LOANS.—
‘‘(A) IN
GENERAL.—Subject to the re-
quirements and conditions contained in this 
paragraph, upon application by a small business 
concern which is the recipient of a loan made 
under this Act, the Administrator may under-
take the small business concern’s obligation to 
make the required payments under such loan or 
may suspend such obligation if the loan was a 
direct loan made by the Administrator. While 
such payments are being made by the Adminis-
112
trator pursuant to the undertaking of such obli-
gation or while such obligation is suspended, no 
such payment with respect to the loan may be 
required from the small business concern. 
‘‘(B) REQUIREMENTS.—The Administrator 
may undertake or suspend for a period of not 
to exceed 5 years any small business concern’s 
obligation under this paragraph only if—
‘‘(i) without such undertaking or sus-
pension of the obligation, the small busi-
ness concern would, in the sole discretion 
of the Administrator, become insolvent or 
remain insolvent; 
‘‘(ii) with the undertaking or suspen-
sion of the obligation, the small business 
concern would, in the sole discretion of the 
Administrator, become or remain a viable 
small business concern; and 
‘‘(iii) the small business concern exe-
cutes an agreement in writing satisfactory 
to the Administration as provided by sub-
paragraph (D) and takes such actions as 
are required under subparagraph (E). 
‘‘(C) EXTENSION OF MATURITY.—Notwith-
standing the provisions of sections 7(a)(9) and
113
7(i)(1), the Administrator may extend the ma-
turity of any loan on which the Administrator 
undertakes or suspends the obligation pursuant 
to this paragraph for a corresponding period of 
time. 
‘‘(D) AGREEMENT.—Prior to the under-
taking or suspension by the Administrator of 
any small business concern’s obligation under 
this subsection, the Administrator, consistent 
with the purposes sought to be achieved under 
this paragraph, shall require the small business 
concern to agree in writing to repay to it the 
aggregate amount of the payments which were 
required under the loan during the period for 
which such obligation was undertaken or sus-
pended, either—
‘‘(i) by periodic payments not less in 
amount or less frequently falling due than 
those which were due under the loan dur-
ing such period; 
‘‘(ii) pursuant to a repayment sched-
ule agreed upon by the Administrator and 
the small business concern; or 
‘‘(iii) by a combination of the pay-
ments described in clauses (i) and (ii).
114
‘‘(E) SECURITY; OTHER
ACTIONS.—The 
Administrator shall, prior to the undertaking or 
suspension of the obligation, take such action, 
and require the small business concern to take 
such action as the Administrator deems appro-
priate in the circumstances, including the provi-
sion of such security as the Administrator 
deems necessary or appropriate to insure that 
the rights and interests of the lender (Adminis-
tration or participant) will be safeguarded ade-
quately during and after the period in which 
such obligation is so undertaken or suspended. 
‘‘(F) REQUIRED
PAYMENTS.—For pur-
poses of this paragraph, the term ‘required pay-
ments’ means, with respect to any loan, pay-
ments of principal and interest under the loan. 
‘‘(4) INTEREST RATE ON DEFERRED PARTICI-
PATION
SHARE.—Upon purchase by the Adminis-
trator of any deferred participation entered into 
under section 7, the Administrator may continue to 
charge a rate of interest not to exceed that initially 
charged by the participating institution on the 
amount so purchased for the remaining term of the 
indebtedness.
115
‘‘(5) SUBORDINATION TO CERTAIN STATE TAX 
LIENS.—Any interest held by the Administrator in 
property, as security for a loan, shall be subordinate 
to any lien on such property for taxes due on the 
property to a State, or political subdivision thereof, 
in any case where such lien would, under applicable 
State law, be superior to such interest if such inter-
est were held by any party other than the United 
States. 
‘‘(g) RISK MANAGEMENT DATABASE.—
‘‘(1) 
ESTABLISHMENT.—The 
Administrator 
shall maintain, within the management system for 
the loan programs authorized by subsections (a) and 
(b) of section 7 and title V of the Small Business 
Investment Act of 1958, a management information 
system that will generate a database capable of pro-
viding timely and accurate information in order to 
identify loan underwriting, collections, recovery, and 
liquidation problems. 
‘‘(2) CONTENTS.—In addition to such other in-
formation as the Administrator considers appro-
priate, the database established under this sub-
section shall, with respect to each loan program de-
scribed in paragraph (1), include information relat-
ing to—
116
‘‘(A) the identity of the institution making 
the guaranteed loan or issuing the debenture; 
‘‘(B) the identity of the borrower; 
‘‘(C) the total dollar amount of the loan or 
debenture; 
‘‘(D) the total dollar amount of govern-
ment exposure in each loan; 
‘‘(E) the district of the Administration in 
which the borrower has its principal office; 
‘‘(F) the principal line of business of the 
borrower, as identified by North American In-
dustrial Classification System Code; 
‘‘(G) the delinquency rate for each pro-
gram (including number of instances and days 
overdue); 
‘‘(H) the number and amount of repur-
chases, losses, and recoveries in each program; 
‘‘(I) 
the 
number 
of 
deferrals 
or 
forbearances in each program (including days 
and number of instances); 
‘‘(J) comparisons on the basis of loan pro-
gram, lender, Administration district and re-
gion, for all the data elements maintained; and 
‘‘(K) underwriting characteristics of each 
loan that has entered into default, including
118
‘‘(b) ASSOCIATE ADMINISTRATORS.—The Adminis-
trator shall only appoint the following associate Adminis-
trators: 
‘‘(1) The Associate Administrator for Capital 
Access, who shall be appointed from civilian life and 
have a minimum of five years experience in pro-
viding investment or banking services to businesses. 
‘‘(2) The Associate Administrator for Govern-
ment Contracting and Minority Small Business Op-
portunities, who shall have a minimum of five years 
of experience in Federal procurement. 
‘‘(3) The Associate Administrator for Enter-
prise Outreach and Training, who shall have a min-
imum of five years experience in community-based 
outreach programs. 
‘‘(4) The Associate Administrator for Adminis-
tration and Management, who shall act as the Chief 
Operating Officer for the Administration and who 
shall oversee the activities of the regional adminis-
trators. 
‘‘(c) ESTABLISHMENT OF CERTAIN OFFICES.—There 
are in the Administration the following offices: 
‘‘(1) The Office of Minority Small Business and 
Capital Ownership Development, which shall be ad-
119
ministered by the assistant administrator appointed 
under subsection (d)(1). 
‘‘(2) The Office of Veterans Business, which 
shall be administered by the assistant administrator 
appointed under subsection (d)(2). 
‘‘(3) The Office of Small Business Development 
Centers, which shall be administered by the assistant 
administrator appointed under subsection (d)(3). 
‘‘(4) The Office of Investment, which shall be 
administered by the assistant administrator ap-
pointed under subsection (d)(4). 
‘‘(5) The Office of Lender Oversight, which 
shall be administered by the assistant administrator 
appointed under subsection (d)(5). 
‘‘(6) The Office of Congressional and Legisla-
tive Affairs, which shall be administered by the as-
sistant administrator appointed under subsection 
(d)(6). 
‘‘(7) The Office of International Trade, which 
shall be administered by the assistant administrator 
appointed under subsection (d)(7). 
‘‘(8) The Office of Women’s Business Owner-
ship, which shall be administered by the assistant 
administrator appointed under subsection (d)(8).
120
‘‘(d) ASSISTANT ADMINISTRATORS.—The Adminis-
trator shall appoint the following Assistant Administra-
tors: 
‘‘(1) The Assistant Administrator for Minority 
Small Business and Capital Ownership Development, 
who—
‘‘(A) shall have a minimum of 5 years ex-
perience within the Administration in assisting 
minority small businesses before being ap-
pointed under this paragraph; 
‘‘(B) shall be responsible for carrying out 
subsections (a), (b), and (c) of section 8; 
‘‘(C) shall be a career employee in the Sen-
ior Executive Service; and 
‘‘(D) shall report to the Associate Adminis-
trator for Government Contracting and Minor-
ity Small Business Opportunities. 
‘‘(2) The Assistant Administrator for Veterans 
Business, who—
‘‘(A) shall have a minimum of 5 years ex-
perience within the Administration or the De-
partment of Veterans Affairs (or in combina-
tion) in providing entrepreneurial outreach to 
veterans before being appointed under this 
paragraph;
121
‘‘(B) shall be responsible for the formula-
tion, execution, and promotion of the policies 
and programs of the Administration that pro-
vide assistance to small business concerns 
owned and controlled by veterans and small 
business concerns owned and controlled by serv-
ice-disabled veterans; 
‘‘(C) shall act as an ombudsman for full 
consideration of veterans in all programs of the 
Administration; 
‘‘(D) shall be a career employee and may 
be an appointee in the Senior Executive Service; 
and 
‘‘(E) shall report to the Associate Adminis-
trator for Enterprise Outreach and Training. 
‘‘(3) The Assistant Administrator for Small 
Business Development Centers who—
‘‘(A) shall have a minimum of 5 years ex-
perience in entrepreneurial outreach to small 
businesses or as an educator in a business pro-
gram in an institution of higher learning (or in 
combination), before being appointed under this 
paragraph; 
‘‘(B) shall carry out section 21;
122
‘‘(C) shall be a career employee and may 
be an appointee in the Senior Executive Service; 
and 
‘‘(D) shall report to the Associate Adminis-
trator for Enterprise Outreach and Training. 
‘‘(4) The Assistant Administrator for Invest-
ment who—
‘‘(A) shall carry out title III of the Small 
Business Investment Act of 1958; 
‘‘(B) shall be a career employee and may 
be an appointee in the Senior Executive Service; 
and 
‘‘(C) shall report to the Associate Adminis-
trator for Capital Access. 
‘‘(5) The Assistant Administrator for Lender 
Oversight who—
‘‘(A) shall have a minimum of 5 years ex-
perience in oversight of lending institutions be-
fore being appointed under this paragraph; 
‘‘(B) shall carry out section 7(a) and assist 
the Administrator in carrying out section 23; 
‘‘(C) shall be a career employee and may 
be an appointee in the Senior Executive Service; 
and
124
‘‘(D) shall report to the Associate Adminis-
trator for Enterprise Training and Outreach. 
‘‘(8) The Assistant Administrator for Women’s 
Business Ownership who—
‘‘(A) shall carry out section 29; 
‘‘(B) may be an appointee in the Senior 
Executive Service; 
‘‘(C) shall report to the Associate Adminis-
trator for Enterprise Outreach and Training; 
‘‘(D) shall advise the Administrator on ap-
pointments to the Women’s Business Council; 
‘‘(E) serve as the vice chairperson of the 
Interagency Committee on Women’s Business 
Enterprise; and 
‘‘(F) serve as liaison for the National 
Women’s Business Council. 
‘‘(e) GENERAL COUNSEL.—The Administrator shall 
appoint a General Counsel. 
‘‘(f) REGIONAL OFFICES.—There are 10 regional of-
fices each of which shall be administered by a regional 
administrator. Such offices shall have the same jurisdic-
tions as the 10 Federal regions or such regions as are 
created by statute or by regulation of the Administrator 
of the General Services Administration. 
‘‘(g) DISTRICT OFFICES.—
125
‘‘(1) 
ESTABLISHMENT.—The 
Administrator 
may establish district offices throughout the United 
States to provide services under this Act and the 
Small Business Investment Act of 1958. 
‘‘(2) CLOSURE.—Except as provided in para-
graph (3), the Administrator may close or combine 
district offices as the Administrator determines ap-
propriate. 
‘‘(3) MINIMUM
NUMBER.—Each State shall 
have at least one district office, except that one dis-
trict office may serve Guam, American Samoa, and 
the Commonwealth of the Northern Mariana Is-
lands. 
‘‘(4) DISTRICT DIRECTORS.—
‘‘(A) IN
GENERAL.—Each district office 
shall have a director appointed by the Adminis-
trator whose salary shall not exceed the rate in 
effect for step 10 of GS–15 of the General 
Schedule. Each district director shall assist the 
Administrator in carrying out the programs es-
tablished by this Act and the Small Business 
Investment Act of 1958. 
‘‘(B) APPEAL OF DECISIONS.—The Admin-
istrator shall issue regulations providing proce-
dures for the appeal of any decision made by
126
any district director. Such regulations shall be 
codified in the Code of Federal Regulations. 
‘‘(C) REVIEW
AND
REMOVAL.—The Ad-
ministrator shall remove and replace any dis-
trict director if such district director has failed, 
with respect to any year, to meet goals devel-
oped by the Administrator for increasing—
‘‘(i) the number of loans made pursu-
ant to section 7 (other than section 7(b)); 
‘‘(ii) the number of participants in the 
programs established pursuant to section 
8; 
‘‘(iii) the amount Federal Government 
procurements from small business concerns 
or from any subcategory of small business 
concern referred to in section 15(g); or 
‘‘(iv) the amount of dollar financings 
for small businesses under the Small Busi-
ness Investment Act of 1958. 
‘‘(D) REASSIGNMENT.—Any district direc-
tor who is removed under subparagraph (C) 
shall be reassigned by the Administrator as a 
procurement center representative or a commer-
cial marketing representative, as determined by 
the Administrator in consultation with the re-
127
gional administrator. Any such reassignment 
shall, for the first year after reassignment, be 
at the same grade and salary. 
‘‘(5) DISTRICT COUNSEL.—Each district office 
shall have a district counsel. Each district counsel 
shall—
‘‘(A) be assigned by, and report to, the 
General Counsel; 
‘‘(B) provide legal assistance to the district 
director and employees in the district office; 
and 
‘‘(C) carry out the required review of 
HUBZone firms specified in section 3. 
‘‘(6) BUSINESS
OPPORTUNITY
SPECIALISTS.—
Each district office shall have a business opportunity 
specialist who shall assist the district director and 
Assistant Administrator for Minority Small Business 
and Capital Ownership Development. The majority 
of the hours worked by the business opportunity spe-
cialist shall be devoted to the programs established 
by section 8(a), unless the district director dem-
onstrates to the Assistant Administrator for Minor-
ity Small Business and Capital Ownership Develop-
ment that there are an insufficient number of firms
128
certified pursuant to section 8(a) to require the em-
ployee to devote such hours to such programs. 
‘‘(7) PROCUREMENT
CENTER
REPRESENTA-
TIVES.—The Associate Administrator for Govern-
ment Contracting and Minority Small Business, 
after consultation with the regional administrators 
and district directors, shall assign such procurement 
center representatives to district offices as the Asso-
ciate Administrator determines to be appropriate. 
Any procurement center representative assigned to a 
district office or procuring agency activity shall re-
port to the district director. The Associate Adminis-
trator shall assign at least one procurement center 
representative in each State. 
‘‘(8) COMMERCIAL
MARKETING
REPRESENTA-
TIVE.—The Associate Administrator for Government 
Contracting and Minority Small Business, after con-
sultation with the regional administrators and dis-
trict directors, shall assign commercial marketing 
representatives to district offices as the Associate 
Administrator determines to be appropriate. Any 
commercial marketing representative assigned to a 
district office shall report to the district director. 
‘‘(h) GENERAL PERSONNEL AUTHORITY.—
129
‘‘(1) EXPERTS AND CONSULTANTS.—The Ad-
ministrator may procure, for purposes of carrying 
out this Act and the Small Business Investment Act 
of 1958, temporary and intermittent services under 
section 3109(b) of title 5, United States Code. 
‘‘(2) TRAVEL EXPENSES.—Each employee may, 
at the discretion of the Administrator, receive travel 
expenses, including per diem in lieu of subsistence, 
in accordance with applicable provisions under sub-
chapter I of chapter 57 of title 5, United States 
Code. Notwithstanding such subchapter, the Admin-
istrator may pay the transportation expenses and 
per diem in lieu of subsistence expenses, for travel 
of any person employed by the Administration to 
render temporary services not in excess of 6 months 
in connection with any disaster referred to in section 
7(b) from place of appointment to, and while at, the 
disaster area and any other temporary posts of duty 
and return upon completion of the assignment. The 
Administrator may extend the 6-month limitation 
for an additional 6 months if the Administrator de-
termines the extension is necessary to continue effi-
cient disaster loan making activities.
130
‘‘(3) NOTARY PUBLIC EXPENSES.—The Admin-
istrator may pay the costs of any employee to qual-
ify as a notary public. 
‘‘(4) DELEGATIONS.—Except as otherwise pro-
vided in this Act or the Small Business Investment 
Act of 1958, the Administrator may delegate a func-
tion or responsibility to any employee of the Admin-
istration. The Administrator shall provide by regula-
tion codified in the Code of Federal Regulations the 
procedures for determining which delegations are to 
be codified in the Code of Federal Regulations. With 
respect to any delegations not promulgated by regu-
lation, the Administrator shall collect and collate 
such delegations and place them in a prominent lo-
cation on the website maintained for the Administra-
tion.’’. 
(b) CONFORMING AMENDMENTS.—
(1) So much of section 22 of the Small Busi-
ness Act (15 U.S.C. 649) as precedes subsection (b) 
is amended to read as follows: 
‘‘SEC. 22. OFFICE OF INTERNATIONAL TRADE. 
‘‘(a) DUTIES OF ASSISTANT ADMINISTRATOR.—Ex-
cept as otherwise provided in this section, the powers, du-
ties, and responsibilities described in this section shall be
131
carried out by the Assistant Administrator for Inter-
national Trade.’’. 
(2) Subsection (b) of section 22 of the Small 
Business Act (15 U.S.C. 649) is amended by strik-
ing ‘‘The Office’’ the first place it appears and in-
serting ‘‘The Office of International Trade’’. 
(c) RELATED REPEAL.—Section 32 of the Small 
Business Act (15 U.S.C. 657b) is amended to read as fol-
lows: 
‘‘SEC. 32. [ RESERVED. ].’’. 
(d) TRANSITION RULES.—
(1) EXCEPTION TO SALARY LIMITATION OF DIS-
TRICT DIRECTORS.—The salary limitation specified 
in section 6(g)(4)(A) of the Small Business Act (as 
amended by this section) shall not apply with respect 
to any district director whose salary exceeds such 
limitation on July 1, 2003. 
(2) REMOVAL AND REASSIGNMENT OF DEPUTY 
DISTRICT DIRECTORS.—
(A) REMOVAL.—The Administrator may 
not appoint any individual to serve as a deputy 
district director. Any individual serving as a 
deputy district director on the date of the en-
actment of this Act shall be removed from such
132
position and reassigned as provided in this 
paragraph. 
(B) REASSIGNMENT.—Any individual re-
moved from office under subsection (A) shall be 
reassigned by the Administrator as a procure-
ment center representative or a commercial 
marketing representative, as determined by the 
Administrator in consultation with the regional 
administrator. Any such reassignment shall be 
at not less than the grade and salary which ap-
plied to such individual prior to reassignment. 
SEC. 207. LOAN PROGRAMS. 
(a) SMALL BUSINESS LOAN PROGRAM.—So much of 
section 7 of the Small Business Act (15 U.S.C. 636) as 
precedes subsection (b) is amended to read as follows: 
‘‘SEC. 7. LOAN PROGRAMS. 
‘‘(a) SMALL BUSINESS LOAN PROGRAM.—
‘‘(1) LOAN
AUTHORITY.—The Administrator 
may, to the extent and in such amounts as provided 
in advance in appropriation Acts, make loans for 
plant acquisition, construction, conversion, or expan-
sion, including the acquisition of land, material, sup-
plies, equipment, and working capital to any small 
business concern, including those owned by qualified 
Indian tribes for purposes of this Act.
133
‘‘(2) METHODS OF PARTICIPATION.—The Ad-
ministrator may make such loans either directly or 
in cooperation with banks or other financial institu-
tions through agreements to participate on an imme-
diate or deferred (guaranteed) basis, except that no 
immediate participation may be purchased unless it 
is shown that a deferred participation is not avail-
able and no direct financing may be made unless it 
is shown that a participation is not available. 
‘‘(3) NO CREDIT ELSEWHERE.—The Adminis-
trator may not make a loan under this subsection if 
the applicant can obtain credit elsewhere. 
‘‘(4) CRIMINAL BACKGROUND CHECK.—Before 
making any loan under this subsection or section 
502 or 503 of the Small Business Investment Act of 
1958, the Administrator may verify the applicant’s 
criminal background, or lack thereof, through the 
best available means, including, if possible, use of 
the National Crime Information Center computer 
system at the Federal Bureau of Investigation. 
‘‘(5) SOUND AND SECURE REQUIREMENT.—
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, any loan made 
under this subsection shall be of such sound