I 
113TH CONGRESS 
2D SESSION 
H. R. 4876 
To amend the Small Business Act to provide for contracting preferences 
and other benefits for emerging business enterprises, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 17, 2014 
Mr. CARSON of Indiana (for himself, Mr. ENYART, Mr. CONYERS, Mr. 
SABLAN, and Ms. BROWN of Florida) introduced the following bill; which 
was referred to the Committee on Small Business 
A BILL 
To amend the Small Business Act to provide for contracting 
preferences and other benefits for emerging business en-
terprises, 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. 
This Act may be cited as the ‘‘Emerging Business 
Encouragement Act of 2014’’. 
SEC. 2. EMERGING BUSINESS ENTERPRISES. 
(a) DESIGNATION.—Section 3 of the Small Business 
Act (15 U.S.C. 632) is amended by adding at the end the 
following: 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
‘‘(dd) EMERGING BUSINESS ENTERPRISES.— 
‘‘(1) IN
GENERAL.—Not later than the date 
that is 1 year after the date of enactment of this 
paragraph, for each industry category for which the 
Administrator established a size standard under this 
subsection, the Administrator shall by rule establish 
procedures for designating a small business concern 
in that industry category as an emerging business 
enterprise. Such procedures shall include the criteria 
under paragraph (2), and a process for appealing 
decisions of the Administrator on designations. Such 
a designation shall expire on the date that the small 
business concern is no longer in compliance with 
such criteria, except that— 
‘‘(A) in the case of an emerging business 
enterprise that receives a designation as such 
but which existed as a business entity prior to 
such designation, the designation shall not ex-
pire by reason of the emerging business enter-
prise being more than 5 years old; instead, the 
designation shall expire on the date that is 5 
years after the date of the designation; and 
‘‘(B) if the emerging business enterprise 
exceeds the size limitation described in the cri-
terion under paragraph (2)(A) following des-
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
ignation as an emerging business enterprise, 
the designation shall expire only if the size is 
50 percent or more of the maximum size of a 
small business concern within that industry cat-
egory. 
The rulemaking under this paragraph shall include 
a procedure for self certification as an emerging 
business enterprise, for annual submission of docu-
mentation establishing eligibility for designation as 
an emerging business enterprise, and for periodic 
audits of emerging business enterprises based on 
such documentation. 
‘‘(2) CRITERIA
FOR
DESIGNATION.—The Ad-
ministrator shall establish criteria for designation of 
an emerging business enterprise, which shall include 
the following: 
‘‘(A) NUMBER OF EMPLOYEES.—That the 
small business concern employs, in the Adminis-
trator’s determination a number of employees 
that is less than the larger of— 
‘‘(i) not more than 10 percent of the 
number of employees that a small business 
concern within that industry category may 
employ, if that small business concern is so 
classified by reason of a size standard 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
under section 3(a) pertaining to the num-
ber of employees of the concern; or 
‘‘(ii) 25 employees. 
‘‘(B) AGE OF BUSINESS.—That the small 
business concern is, in the Administrator’s de-
termination, not more than 5 years old. 
‘‘(C) SALARY
REQUIREMENTS.—That the 
small business concern does not, in the Admin-
istrator’s determination, pay to an individual 
who owns any part of the concern or who is in 
a management position a salary greater than 
200 percent of the mean annual salary for 
Managers of Companies and Enterprises or the 
equivalent from the most recent Employment 
and Wage Estimates developed by the Secretary 
of Labor. 
‘‘(3) PUBLIC
NOTIFICATION.—The Adminis-
trator shall take appropriate action to publicize the 
establishment of the procedures for designations 
under this paragraph, including by conducting out-
reach to eligible small business concerns. 
‘‘(4) CONTRACTOR
TRAINING.—The Adminis-
trator shall provide for training regarding Federal 
procurement on an Internet Web site of the Admin-
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
istrator, which shall be available to the public at no 
charge.’’. 
(b) CONTRACTING PREFERENCE.—Section 15(g)(2) 
of the Small Business Act (15 U.S.C. (g)(2)) is amended 
by adding at the end the following: 
‘‘(G) 
EMERGING
BUSINESS
ENTER-
PRISES.— 
‘‘(i) IN GENERAL.—The head of each 
Federal agency shall, after consultation 
with the Administrator, establish goals for 
participation by emerging business enter-
prises designated under section 3(a)(6) in 
not less than 5 percent of all contracts, in-
cluding prime contracts and subcontracts, 
for each fiscal year. The head of the agen-
cy may give preference in making contract 
awards to such emerging business enter-
prises and shall make consistent efforts to 
annually expand participation by emerging 
business enterprises from each industry 
category in procurement contracts of the 
agency. 
‘‘(ii) REPORTS.— 
‘‘(I) 
REPORTS
FROM
AGEN-
CIES.—At the conclusion of each fiscal 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
year, the head of each Federal agency 
shall report to the Administrator on 
the extent of participation by emerg-
ing business enterprises in procure-
ment contracts of such agency. Such 
reports shall contain appropriate jus-
tifications for failure to meet the goals 
established under this subparagraph. 
‘‘(II) REPORTS TO CONGRESS.— 
The 
Administrator 
shall 
annually 
compile and analyze the reports sub-
mitted by the individual agencies pur-
suant to subclause (I) and shall sub-
mit to the President and the Com-
mittee on Small Business and Entre-
preneurship of the Senate and the 
Committee on Small Business of the 
House of Representatives the compila-
tion and analysis, which shall include 
the following: 
‘‘(aa) The goals in effect for 
each agency and the agency’s 
performance in attaining such 
goals. 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
‘‘(bb) An analysis of any 
failure to achieve individual agen-
cy goals and the actions planned 
by such agency (and approved by 
the Administrator) to achieve the 
goals in the succeeding fiscal 
year. 
‘‘(cc) The total number and 
dollar value of prime contracts 
and subcontracts awarded to 
emerging business enterprises. 
‘‘(III) ANNUAL
PRESIDENTIAL 
REPORT
ON
THE
STATE
OF
SMALL 
BUSINESS.—The President shall in-
clude the information required by sub-
clause (II) in each annual report to 
the Congress on the state of small 
business prepared pursuant to section 
303(a) of the Small Business Eco-
nomic Policy Act of 1980 (15 U.S.C. 
631b(a)).’’. 
(c) AMENDMENTS
TO
SBA EXPRESS.—Section 
7(a)(31) of the Small Business Act (15 U.S.C. 
636(a)(31)) is amended by adding at the end the fol-
lowing: 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
‘‘(G) 
EMERGING
BUSINESS
ENTER-
PRISES.— 
‘‘(i) IN GENERAL.—The Administrator 
may make a loan under the Express Loan 
Program to an emerging business enter-
prise designated under section 3(dd), ex-
cept that such loans shall be made in ac-
cordance with the terms of this subpara-
graph. 
‘‘(ii) GUARANTY RATE.—The guaranty 
rate of such a loan shall be in accordance 
with the following: 
‘‘(I) Except as otherwise provided 
in this clause, 65 percent. 
‘‘(II) Except as provided in sub-
clause (III), if, in a report submitted 
under clause (iii), the total number of 
loans made and the total amount 
loaned by a lender is greater by 10 
percent than the prior fiscal year, 75 
percent. 
‘‘(III) If, in a report submitted 
under clause (iii), the total rate of de-
fault on loans issued under subclauses 
(I) and (II) is greater by 10 percent 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
than the prior year, 50 percent in the 
succeeding fiscal year. 
‘‘(iii) REPORTS.—On the date that is 
1 year after the end if the first fiscal year 
for which a loan is first guaranteed under 
this subparagraph, and annually there-
after, each lender making a loan guaran-
teed under this section shall report to the 
Administrator total number of loans made 
during the preceding fiscal year, the total 
amount loaned, and the default rate for all 
guaranteed loans. 
‘‘(iv) VERIFICATION.—A lender mak-
ing a loan guaranteed under this section 
shall verify the status of a business con-
cern as an emerging business enterprise 
before issuing a loan. 
‘‘(v) SANCTION.—If a business con-
cern has received a loan under this sub-
paragraph and that business concern has 
fraudulently misrepresented its status as 
an emerging business enterprise, that busi-
ness concern shall repay the amount of the 
loan to the lender (from which amount the 
lender shall repay the amount of any guar-
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS
antee paid on the loan), and shall in addi-
tion pay a fine in an amount determined 
by the Administrator.’’. 
SEC. 3. RULEMAKINGS. 
(a) SELF-CERTIFICATION.—Not later than 180 days 
after the date of enactment of this Act, the Administrator 
shall by rule establish a process for initial self-certification 
of emerging business enterprises for purposes of participa-
tion in Federal contracts, and eligibility for Express Loans 
under section 7(a)(31)(G) of the Small Business Act. 
Æ 
VerDate Mar 15 2010 
03:23 Jun 18, 2014
Jkt 039200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6301
E:\BILLS\H4876.IH
H4876
tjames on DSK5VPTVN1PROD with BILLS