240 
26345.
Federal and State Technology Partnership program. 
26346.
Second phase and third phase awards for testing and evaluation of products, services, 
and technologies for use in a technical or weapons system. 
26347.
Innovation in energy efficiency 
Subchapter I—SBIRs 
§ 26301. Federal agency SBIRs 
(a) SBIR BUDGET.—A Federal agency that has an extramural budget for 
research or research and development in excess of $100,000,000 for any fis-
cal year shall expend with small business concerns not less than 2.5 percent 
of the extramural budget specifically in connection with an SBIR that meets 
the requirements of this division (including policy directives under section 
26304 of this title). 
(b) LIMITATIONS.—An SBIR agency shall not— 
(1) use any of its SBIR budget established under subsection (a) for 
the purpose of funding administrative costs of the program, including 
costs associated with salaries and expenses; or 
(2) make available for the purpose of meeting the requirements of 
subsection (a) an amount of its extramural budget for basic research 
that exceeds the percentage specified in subsection (a). 
(c) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—A funding agree-
ment with a small business concern for research or research and develop-
ment that results from a competitive or single source selection other than 
an SBIR shall not be considered to meet any portion of the percentage re-
quirement of subsection (a). 
§ 26302. Administration of SBIRs by Federal agencies 
(a) IN GENERAL.—An SBIR agency shall, in accordance with this divi-
sion (including policy directives under section 26304 of this title)— 
(1) unilaterally determine categories of projects to be in its SBIR; 
(2) issue SBIR solicitations in accordance with a schedule deter-
mined cooperatively with the Administrator; 
(3) unilaterally determine research topics within the SBIR agency’s 
SBIR solicitations, giving special consideration to broad research topics 
and to topics that further one or more critical technologies, as identi-
fied by— 
(A) the National Critical Technologies Panel in the reports re-
quired under section 603 of the National Science and Technology 
Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 6683) 
(as in effect before January 1, 2001); or 
(B) the Secretary of Defense, in the reports required under sec-
tion 2522 of title 10 (as in effect before February 10, 1996); 
(4) unilaterally receive and evaluate proposals resulting from SBIR 
proposals; 
(5) subject to section 26310(b) of this title— 
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(A) unilaterally select awardees for its SBIR funding agree-
ments; and 
(B) inform each awardee under a funding agreement, to the ex-
tent possible, of the expenses of the awardee that will be allowable 
under the funding agreement; 
(6) administer its own SBIR funding agreements (or delegate such 
administration to another Federal agency); 
(7)(A) make payments to recipients of SBIR funding agreements on 
the basis of progress toward or completion of the funding agreement 
requirements; and 
(B) in all cases, make payment to recipients under such agreements 
in full, subject to audit, on or before the last day of the 12-month pe-
riod beginning on the date of completion of the funding agreement re-
quirements; 
(8)(A) include a section on its SBIR in its annual performance plan 
required by subsections (a) and (b) of section 1115 of title 31; and 
(B) submit that section to the Committee on Small Business and 
Entrepreneurship of the Senate and the Committee on Science and 
Committee on Small Business of the House of Representatives; 
(9) collect, and maintain in a common format in accordance with 
section 26344 of this title, such information from awardees as is nec-
essary to assess the SBIR, including information necessary to maintain 
the database under section 26341 of this title; and 
(10) provide for and fully implement the tenets of Executive Order 
No. 13329 (Encouraging Innovation in Manufacturing). 
(b) RESEARCH AND DEVELOPMENT FOCUS.— 
(1) REVISION
AND
UPDATE
OF
CRITERIA
AND
PROCEDURES
OF 
IDENTIFICATION.—In carrying out subsection (a), the Secretary of De-
fense shall, not less often than once every 4 years, revise and update 
the criteria and procedures used to identify areas of the research and 
development efforts of the Department of Defense that are suitable for 
the provision of funds under the SBIR and the STTR of the Depart-
ment of Defense. 
(2) USE OF PLANS.—The criteria and procedures described in para-
graph (1) shall be developed through the use of the most current 
versions of the following plans: 
(A) The Joint Warfighting Science and Technology Plan re-
quired under section 270 of the National Defense Authorization 
Act for Fiscal Year 1997 (10 U.S.C. 2501 note; Public Law 104– 
201). 
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(B) The Defense Technology Area Plan of the Department of 
Defense. 
(C) The Basic Research Plan of the Department of Defense. 
(3) INPUT IN IDENTIFICATION OF AREAS OF EFFORT.—The criteria 
and procedures described in paragraph (1) shall include input in the 
identification of areas of research and development efforts described in 
that paragraph from Department of Defense program managers and 
program executive officers. 
§ 26303. Funding agreement goals 
(a) IN GENERAL.—A Federal agency that has a budget for research or 
research and development in excess of $20,000,000 for any fiscal year shall 
establish goals specifically for funding agreements for research or research 
and development to small business concerns. 
(b) NO BACKSLIDING.—No goal established by a Federal agency under 
subsection (a) shall be less than the percentage of the Federal agency’s re-
search or research and development budget expended under funding agree-
ments with small business concerns in the immediately preceding fiscal year. 
§ 26304. SBIR policy directives 
(a) IN GENERAL.—The Administrator, after consultation with the Admin-
istrator of the Office of Federal Procurement Policy, the Director of the Of-
fice of Science and Technology Policy, and the Intergovernmental Affairs 
Division of the Office of Management and Budget, shall issue policy direc-
tives for the general conduct of the SBIRs within the Federal Government. 
(b) MATTERS TO BE PROVIDED FOR.—Policy directives under subsection 
(a) shall provide for— 
(1) simplified, standardized, and timely SBIR solicitations; 
(2) a simplified, standardized funding process that provides for— 
(A) the timely receipt and review of proposals; 
(B) outside peer review for at least phase two proposals, if ap-
propriate; 
(C) protection of proprietary information provided in proposals; 
(D) selection of awardees; 
(E) retention by a small business concern of the rights to data 
generated by the small business concern in the performance of an 
SBIR award for a period of not less than 4 years; 
(F) transfer of title to property provided by a Federal agency 
to a small business concern if such a transfer would be more cost 
effective than recovery of the property by the Federal agency; 
(G) cost sharing; and 
(H) cost principles and payment schedules; 
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(3) exemptions from the policy directives under paragraph (2) if na-
tional security or intelligence functions clearly would be jeopardized; 
(4) minimizing the regulatory burden associated with participation in 
an SBIR for a small business concern so as to stimulate the cost-effec-
tive conduct of Federal research and development and the likelihood of 
commercialization of the results of research and development conducted 
under the SBIR; 
(5) the submission by a Federal agency to the Administrator and the 
Office of Science and Technology Policy of a simplified, standardized, 
and timely annual report on its SBIR; 
(6) standardized and orderly withdrawal from SBIR participation by 
a Federal agency; 
(7) the voluntary participation in an SBIR by a Federal agency not 
required by section 26301 of this title to have an SBIR; 
(8) continued use by a small business concern participating in the 
third phase of an SBIR, as a directed bailment, of any property trans-
ferred by a Federal agency to the small business concern in the second 
phase of an SBIR for a period of not less than 2 years, beginning on 
the initial date of the small business concern’s participation in the third 
phase of an SBIR; 
(9) procedures to ensure, to the extent practicable, that a Federal 
agency that intends to pursue research, development, or production of 
a technology developed by a small business concern under an SBIR en-
ters into a follow-on, non-SBIR funding agreement with the small busi-
ness concern for the research, development, or production; 
(10) limits in the amounts of funds that a Federal agency may 
award of $100,000 in the first phase of an SBIR and $750,000 in the 
second phase of an SBIR, adjusted once every 5 years to reflect eco-
nomic adjustments and programmatic considerations; 
(11) a process for notifying SBIR agencies and potential SBIR par-
ticipants of the critical technologies, as identified— 
(A) by the National Critical Technologies Panel in accordance 
with section 603 of the National Science and Technology Policy, 
Organization, and Priorities Act of 1976 (42 U.S.C. 6683) (as in 
effect before January 1, 2001); or 
(B) by the Secretary of Defense in accordance with section 
2522 of title 10 (as in effect before February 10, 1996); 
(12)(A) enhanced outreach efforts to increase the participation of 
small business concerns owned and controlled by socially and economi-
cally disadvantaged individuals and the participation of small business 
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concerns owned and controlled by women in technological innovation 
and in SBIRs, including the third phase of SBIRs; and 
(B) the collection of data to document that participation; 
(13) technical and programmatic guidance to encourage Federal 
agencies to develop gap-funding programs to address the delay between 
an award for the first phase of an SBIR and the application for and 
extension of an award for the second phase of the SBIR; 
(14) procedures to ensure that a small business concern that submits 
a proposal for a funding agreement for the first phase of an SBIR and 
that has received more than 15 second phase SBIR awards during the 
preceding 5 fiscal years is able to demonstrate the extent to which the 
small business concern was able to secure third phase funding to de-
velop concepts resulting from previous second phase SBIR awards; 
(15) the requirement of a succinct commercialization plan with each 
application for a second phase SBIR award that is moving toward com-
mercialization; 
(16) a requirement that a Federal agency report to the Adminis-
trator, not less frequently than annually, all instances in which the 
Federal agency pursued research, development, or production of a tech-
nology developed by a small business concern using an award made 
under the SBIR of the Federal agency and determined that it was not 
practicable to enter into a follow-on non-SBIR funding agreement with 
the small business concern; and 
(17) implementation of section 26344 of this title, including estab-
lishing standardized procedures for the provision of information under 
section 26341(c) of this title. 
(c) PHASED WITHDRAWAL FROM SBIR PROGRAM.—At the discretion of 
the Administrator, the policy directive under subsection (b)(6) may require 
a phased withdrawal over a period of time sufficient in duration to minimize 
any adverse impact on small business concerns. 
(d) RIGHTS
TO
DATA.—The rights provided for under subsection 
(b)(1)(E) shall apply to all Federal funding awards under this division, in-
cluding first phase, second phase, and third phase awards. 
(e) REPORTS ON IMPRACTICABILITY OF FOLLOW-ON AGREEMENTS.—A 
report under subsection (b)(16) shall include, at a minimum— 
(1) the reasons why the follow-on funding agreement with the small 
business concern was not practicable; 
(2) the identity of the entity with which the Federal agency con-
tracted to perform the research, development, or production; and 
(3) a description of the type of funding agreement under which the 
research, development, or production was obtained. 
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§ 26305. Discretionary technical assistance 
(a) IN GENERAL.—An SBIR agency may enter into an agreement with 
a vendor selected under subsection (b) to provide small business concerns 
engaged in SBIR projects with technical assistance services, such as access 
to a network of scientists and engineers engaged in a wide range of tech-
nologies or access to technical and business literature available through on- 
line data bases, for the purpose of assisting the small business concerns 
in— 
(1) making better technical decisions concerning the projects; 
(2) solving technical problems that arise during the conduct of the 
projects; 
(3) minimizing technical risks associated with the projects; and 
(4) developing and commercializing new commercial products and 
processes resulting from the projects. 
(b) VENDOR SELECTION.— 
(1) IN GENERAL.—An SBIR agency may select a vendor to assist 
small business concerns in meeting the goals listed in subsection (a) 
for a term not to exceed 3 years. 
(2) COMPETITION.—Selection of a vendor shall be competitive and 
shall use merit-based criteria. 
(c) ADDITIONAL TECHNICAL ASSISTANCE.— 
(1) FIRST PHASE.—An SBIR agency may provide services described 
in subsection (a) to first phase SBIR award recipients in an amount 
equal to not more than $4,000, which shall be in addition to the 
amount of the recipient’s award. 
(2) SECOND PHASE.—An SBIR agency described in subsection (a) 
may authorize any second phase SBIR award recipient to purchase, 
with funds available from its SBIR awards, services described in sub-
section (a), in an amount equal to not more than $4,000 per year. 
§ 26306. Coordination of technology development programs 
(a) DEFINITION OF TECHNOLOGY DEVELOPMENT PROGRAM.—In this 
section, the term ‘‘technology development program’’ means— 
(1) the Experimental Program to Stimulate Competitive Research of 
the National Science Foundation, as established under section 113 of 
the National Science Foundation Authorization Act of 1988 (42 U.S.C. 
1862g); 
(2) the Defense Experimental Program to Stimulate Competitive Re-
search of the Department of Defense; 
(3) the Experimental Program to Stimulate Competitive Research of 
the Department of Energy; 
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(4) the Experimental Program to Stimulate Competitive Research of 
the Environmental Protection Agency; 
(5) the Experimental Program to Stimulate Competitive Research of 
the National Aeronautics and Space Administration; 
(6) the Institutional Development Award Program of the National 
Institutes of Health; and 
(7) the National Research Initiative Competitive Grants Program of 
the Department of Agriculture. 
(b) COORDINATION REQUIREMENTS.—A Federal agency that is subject to 
section 26301 of this title and that has established a technology develop-
ment program may, in each fiscal year, review for funding under the tech-
nology development program— 
(1) a proposal to provide outreach and assistance to one or more 
small business concerns interested in participating in the Federal agen-
cy’s SBIR (including a proposal to make a grant or loan to a business 
concern to pay a portion or all of the cost of developing an SBIR pro-
posal) from an entity, organization, or individual located in— 
(A) a State that is eligible to participate in the technology devel-
opment program; or 
(B) a State described in subsection (c); or 
(2) a proposal for the first phase of the SBIR program (if the pro-
posal, though meritorious, is not funded through the SBIR program for 
that fiscal year due to funding restraints) from a small business con-
cern located in— 
(A) a State that is eligible to participate in the technology devel-
opment program; or 
(B) a State described in subsection (c). 
(c) ADDITIONALLY ELIGIBLE STATE.—A State referred to in paragraph 
(1)(B) or (2)(B) of subsection (b) is a State in which the total value of con-
tracts awarded to small business concerns under all SBIRs is less than the 
total value of contracts awarded to small business concerns in a majority 
of other States, as determined by the Administrator in even-numbered fiscal 
years, based on the most recent statistics compiled by the Administrator. 
§ 26307. Purchase of American-made equipment and prod-
ucts 
(a) PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS.—It is 
the sense of Congress that an entity that is awarded a funding agreement 
under the SBIR of a Federal agency should, when purchasing any equip-
ment or a product with funds provided through the funding agreement, pur-
chase only American-made equipment and products, to the extent possible 
in keeping with the overall purposes of the SBIR. 
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(b) NOTICE TO SBIR AWARDEES.—A Federal agency that awards a 
funding agreement under an SBIR shall provide to each recipient of such 
an award a notice describing the sense of the Congress stated in subsection 
(a). 
§ 26308. Use of Department of Agriculture extramural budg-
et funds 
All funds appropriated that are determined to be part of the extramural 
budget of the Department of Agriculture for any fiscal year for purposes 
of meeting the requirements of this division shall be available for funding 
agreements with small business concerns for any purpose in furtherance of 
the SBIR of the Department of Agriculture. Such funds may be transferred 
for that purpose from one appropriation account to another or to a single 
account. 
§ 26309. Commercialization pilot program 
(a) IN GENERAL.—The Secretary of Defense and each Secretary of a 
military department may create and administer a commercialization pilot 
program to accelerate the transition of technologies, products, and services 
developed under the SBIR of the Department of Defense or of the military 
department to the third phase, including the acquisition process. 
(b) IDENTIFICATION
OF
RESEARCH
PROGRAMS
FOR
ACCELERATED 
TRANSITION TO ACQUISITION PROCESS.—In carrying out a commercializa-
tion pilot program, the Secretary of Defense and the Secretary of each mili-
tary department shall identify research programs of an SBIR that have the 
potential for rapid transitioning to the third phase and into the acquisition 
process. 
(c) LIMITATION.—No research program of a military department may be 
identified under subsection (b) unless the Secretary of the military depart-
ment certifies in writing that the successful transition of the research pro-
gram to the third phase and into the acquisition process is expected to meet 
high priority military requirements of the military department. 
(d) FUNDING.— 
(1) IN GENERAL.—For payment of expenses incurred to administer 
the commercialization pilot program under this subsection, the Sec-
retary of Defense and a Secretary of a military department may use 
not more than an amount equal to one percent of the funds available 
to the Department of Defense or the military department under an 
SBIR. 
(2) USE OF FUNDS.—Funds used as described in paragraph (1)— 
(A) shall not be subject to the limitations on the use of funds 
in section 26301(b) of this title; and 
(B) shall not be used to make third phase awards. 
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(e) EVALUATIVE REPORT.— 
(1) IN GENERAL.—At the end of each fiscal year, the Secretary of 
Defense shall submit to the Committee on Armed Services and Com-
mittee on Small Business and Entrepreneurship of the Senate and the 
Committee on Armed Services and Committee on Small Business of the 
House of Representatives an evaluative report regarding activities 
under the commercialization pilot program. 
(2) CONTENTS.—A report under paragraph (1) shall include— 
(A) an accounting of the funds used in the commercialization 
pilot program; 
(B) a detailed description of the commercialization pilot pro-
gram, including incentives and activities undertaken by acquisition 
program managers, program executive officers, and prime contrac-
tors; and 
(C) a detailed compilation of results achieved by the commer-
cialization pilot program, including the number of small business 
concerns assisted and the number of projects commercialized. 
(f) SUNSET.—A commercialization pilot program under this section shall 
terminate at the end of fiscal year 2009. 
§ 26310. Reports by Federal agencies 
(a) ANNUAL REPORT.—An SBIR agency shall annually submit to the Ad-
ministrator and the Office of Science and Technology Policy a report on the 
Federal agency’s SBIR. 
(b) REPORTING OF AWARDS MADE FROM SINGLE PROPOSALS, AWARDS 
TO MULTIPLE AWARD WINNERS, AND AWARDS TO CRITICAL TECHNOLOGY 
TOPICS.— 
(1) SINGLE PROPOSAL.—If an SBIR agency makes an award with 
respect to an SBIR solicitation topic or subtopic for which the Federal 
agency received only one proposal, the SBIR agency shall provide writ-
ten justification for making the award in its next quarterly report to 
the Administrator and in the SBIR agency’s next annual report re-
quired under subsection (a). 
(2) MULTIPLE AWARDS.—An SBIR agency shall include in its next 
annual report required under subsection (a) an accounting of the 
awards that the SBIR agency has made for the first phase of its SBIR 
during the reporting period to entities that have received more than 15 
awards for the second phase of the SBIR during the preceding 5 fiscal 
years. 
(3) CRITICAL TECHNOLOGY AWARDS.— 
(A) IN GENERAL.—An SBIR agency shall include in its next an-
nual report required under subsection (a) an accounting of the 
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number of awards that the SBIR agency has made to critical tech-
nology topics described in section 26302(3) of this title. 
(B) CONTENTS.—An accounting under subparagraph (A) 
shall— 
(i) include an identification of the specific critical tech-
nologies topics; and 
(ii) disclose the percentage by number and dollar amount 
of the SBIR agency’s total SBIR awards to critical tech-
nology topics. 
(c) NUMBER AND DOLLAR AMOUNT OF AWARDS.— 
(1) IN GENERAL.—A Federal agency required by section 26301 of 
this title to have an SBIR or to establish goals shall annually submit 
to the Administrator a report that discloses— 
(A) the number of awards pursuant to grants, contracts, or co-
operative agreements over $10,000 in amount; and 
(B) the dollar value of all such awards. 
(2) CONTENTS.—A report under paragraph (1) shall identify SBIR 
awards and compare the number and amount of those awards with 
awards to other than small business concerns. 
(3) CALCULATION OF EXTRAMURAL BUDGET.— 
(A) METHODOLOGY.—Not later than 4 months after the date 
of enactment of each appropriations Act for an SBIR agency, the 
SBIR agency shall submit to the Administrator a report that in-
cludes a description of the methodology used for calculating the 
amount of the extramural budget of that SBIR agency. 
(B) ADMINISTRATOR’S ANALYSIS.—The Administrator shall in-
clude an analysis of the methodology received from each SBIR 
agency in the report required by section 10710(a) of this title. 
§ 26311. Termination 
The authorization to carry out an SBIR under this chapter terminates 
on September 30, 2008. 
Subchapter II—STTRs 
§ 26321. Federal agency STTRs 
(a) STTR BUDGET.—With respect to each fiscal year through fiscal year 
2009, a Federal agency that has an extramural budget for research or re-
search and development in excess of $1,000,000,000 for the fiscal year shall 
expend with small business concerns not less than 0.3 percent, specifically 
in connection with an STTR that meets the requirements of this division 
(including any policy directive under section 26323 of this title). 
(b) LIMITATIONS.—A Federal agency shall not— 
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(1) use any of its STTR budget established under subsection (a) for 
the purpose of funding— 
(A) administrative costs of the STTR program, including costs 
associated with salaries and expenses; or 
(B) in the case of a small business concern or a research insti-
tution, costs associated with salaries, expenses, and administrative 
overhead (other than direct or indirect costs allowable under 
guidelines of the Office of Management and Budget and the Gov-
ernmentwide Federal Acquisition Regulation issued under section 
25(c)(1) of the Office of Federal Procurement Policy Act (41 
U.S.C. 421(c)(1))); or 
(2) make available for the purpose of meeting the requirements of 
subsection (a) an amount of its extramural budget for basic research 
that exceeds the percentage specified in subsection (a). 
(c) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—A funding agree-
ment with a small business concern for research or research and develop-
ment that results from a competitive or single source selection other than 
an STTR shall not be considered to meet any portion of the percentage re-
quirement of subsection (a). 
§ 26322. Administration of STTRs by Federal agencies 
An STTR agency shall— 
(1) unilaterally determine categories of projects to be included in its 
STTR; 
(2) issue STTR solicitations in accordance with a schedule deter-
mined cooperatively with the Administrator; 
(3) unilaterally determine research topics within the Federal agency’s 
STTR solicitations, giving special consideration to broad research top-
ics and to topics that further one or more critical technologies, as iden-
tified by— 
(A) the National Critical Technologies Panel in the reports re-
quired under section 603 of the National Science and Technology 
Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 6683) 
(as in effect before January 1, 2001); or 
(B) the Secretary of Defense, in the reports required under sec-
tion 2522 of title 10 (as in effect before February 10, 1996); 
(4) unilaterally receive and evaluate proposals resulting from STTR 
solicitations; 
(5)(A) unilaterally select awardees for its STTR funding agreements; 
and 
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(B) inform each awardee under a funding agreement, to the extent 
possible, of the expenses of the awardee that will be allowable under 
the funding agreement; 
(6) administer its own STTR funding agreements (or delegate such 
administration to another Federal agency); 
(7)(A) make payments to recipients of STTR funding agreements on 
the basis of progress toward or completion of the funding agreement 
requirements; and 
(B) in all cases, make payment to recipients under funding agree-
ments in full, subject to audit, on or before the last day of the 12- 
month period beginning on the date of the completion of the funding 
agreement requirements; 
(8)(A) include as part of its annual performance plan as required by 
subsections (a) and (b) of section 1115 of title 31 a section on its 
STTR; and 
(B) submit that section to the Committee on Small Business of the 
Senate and the Committee on Science and the Committee on Small 
Business of the House of Representatives; 
(9) collect such information from awardees as is necessary to assess 
STTR outputs and outcomes; 
(10) adopt the agreement developed by the Administrator under sec-
tion 26324 of this title as the STTR agency’s model agreement for al-
locating between small business concerns and research institutions— 
(A) intellectual property rights; and 
(B) rights, if any, to carry out follow-on research, development, 
or commercialization; 
(11) develop, in consultation with the Office of Federal Procurement 
Policy and the Office of Government Ethics, procedures to ensure that 
federally funded research and development centers that participate in 
STTR agreements— 
(A) are free from organizational conflicts of interests relative to 
the program; 
(B) do not use privileged information gained through work per-
formed for an STTR agency or private access to STTR agency 
personnel in the development of an STTR proposal; and 
(C) use outside peer review, as appropriate; 
(12) develop procedures for assessing the commercial merit and fea-
sibility of STTR proposals, as evidenced by— 
(A) the small business concern’s record of successfully commer-
cializing STTR or other research; 
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(B) the existence of second phase funding commitments from 
private sector or non-STTR funding sources; 
(C) the existence of third phase follow-on commitments for the 
subject of the research; and 
(D) the presence of other indicators of the commercial potential 
of the idea; 
(13) implement an outreach program to research institutions and 
small business concerns for the purpose of enhancing its STTR, in con-
junction with any such outreach done for purposes of the STTR agen-
cy’s SBIR; 
(14) collect, and maintain in a common format in accordance with 
section 26344 of this title, such information from awardees as is nec-
essary to assess its STTR, including information necessary to maintain 
the database under section 26341 of this title; 
(15) annually submit to the Administrator and the Office of Science 
and Technology Policy a report on its STTR; and 
(16) provide for and fully implement the tenets of Executive Order 
No. 13329 (Encouraging Innovation in Manufacturing). 
§ 26323. STTR policy directive 
(a) ISSUANCE.—The Administrator shall issue a policy directive for the 
general conduct of the STTRs within the Federal Government. 
(b) CONSULTATION.—The STTR policy directive shall be issued after 
consultation with— 
(1) the heads of each of the STTR agencies; 
(2) the Under Secretary of Commerce for Intellectual Property and 
Director of the United States Patent and Trademark Office; and 
(3) the Director of the Office of Federal Procurement Policy. 
(c) CONTENTS.—The policy directive required by subsection (a) shall pro-
vide for— 
(1) simplified, standardized, and timely STTR solicitations; 
(2) a simplified, standardized funding process that provides for— 
(A) the timely receipt and review of proposals; 
(B) outside peer review, if appropriate; 
(C) protection of proprietary information provided in proposals; 
(D) selection of awardees; 
(E) retention by a small business concern of the rights to data 
generated by the small business concern in the performance of an 
STTR award for a period of not less than 4 years; 
(F) continued use by a small business concern, as a directed 
bailment, of any property transferred by a Federal agency to the 
small business concern in the second phase of the Federal agency’s 
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STTR for a period of not less than 2 years, beginning on the ini-
tial date of the small business concern’s participation in the third 
phase of the STTR; 
(G) cost sharing; 
(H) cost principles and payment schedules; and 
(I)(i) one-year awards for the first phase of an STTR, generally 
not to exceed $100,000, greater or lesser amounts to be awarded 
at the discretion of the awarding Federal agency, and shorter or 
longer periods of time to be approved at the discretion of the 
awarding agency where appropriate for a particular project; and 
(ii) 2-year awards for the second phase of the STTR, generally 
not to exceed $750,000, greater or lesser amounts to be awarded 
at the discretion of the awarding Federal agency, and shorter or 
longer periods of time to be approved at the discretion of the 
awarding agency where appropriate for a particular project; 
(3) minimizing the regulatory burdens associated with participation 
in an STTR; 
(4) guidelines for a model agreement, to be used by all Federal agen-
cies, for allocating between small business concerns and research insti-
tutions— 
(A) intellectual property rights; and 
(B) rights, if any, to carry out follow-on research, development, 
or commercialization; 
(5) procedures to ensure that— 
(A) a recipient of an STTR award is a small business concern; 
and 
(B) the small business concern exercises management and con-
trol of the performance of the STTR funding agreement under a 
business plan providing for the commercialization of the tech-
nology that is the subject matter of the award; and 
(6) procedures to ensure, to the extent practicable, that a Federal 
agency that intends to pursue research, development, or production of 
a technology developed by a small business concern under an STTR en-
ters into a follow-on, non-STTR funding agreement with the small 
business concern for the research, development, or production. 
(d) RIGHTS
TO
DATA.—The rights provided for under subsection 
(c)(2)(E) shall apply to all Federal funding awards under this division, in-
cluding first phase, second phase, and third phase awards. 
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§ 26324. STTR model agreement for intellectual property 
rights 
(a) IN GENERAL.—The Administrator shall promulgate regulations estab-
lishing a single model agreement for use in an STTR that allocates between 
small business concerns and research institutions— 
(1) intellectual property rights; and 
(2) rights, if any, to carry out follow-on research, development, or 
commercialization. 
(b) OPPORTUNITY FOR COMMENT.—In promulgating regulations under 
subsection (a), the Administrator shall provide to affected Federal agencies, 
small business concerns, research institutions, and other interested parties 
the opportunity to submit written comments. 
Subchapter III—Provisions Relating to Both SBIRs and 
STTRs 
§ 26341. Database 
(a) PUBLIC DATABASE.—The Administrator shall develop, maintain, and 
make available to the public a searchable, up-to-date, electronic database 
that includes— 
(1) the name, size, location, and an identifying number assigned by 
the Administrator of each small business concern that has received a 
first phase or second phase SBIR or STTR award from a Federal 
agency; 
(2) a description of each first phase or second phase SBIR or STTR 
award received by that small business concern, including— 
(A) an abstract of the project funded by the award, excluding 
any information identified by the small business concern as propri-
etary information; 
(B) the Federal agency making the award; and 
(C) the date and amount of the award; 
(3) an identification of any business concern or subsidiary estab-
lished for the commercial application of a product or service for which 
an SBIR or STTR award is made; 
(4) information regarding mentors and mentoring networks, as re-
quired by section 26345(f)(3) of this title; and 
(5) with respect to assistance under STTR— 
(A) whether the small business concern or the research institu-
tion initiated their collaboration on each assisted STTR project; 
(B) whether the small business concern or the research institu-
tion originated any technology relating to the assisted STTR 
project; 
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(C) the length of time it took to negotiate any licensing agree-
ment between the small business concern and the research institu-
tion under each assisted STTR project; and 
(D) how the proceeds from commercialization, marketing, or 
sale of technology resulting from each assisted STTR project were 
allocated (by percentage) between the small business concern and 
the research institution. 
(b) GOVERNMENT DATABASE.— 
(1) IN GENERAL.—The Administrator, in consultation with SBIR 
agencies and STTR agencies, shall develop and maintain a database 
that— 
(A) contains for each second phase award made by a Federal 
agency— 
(i) information collected in accordance with subsection (c) 
on revenue from the sale of new products or services resulting 
from the research conducted under the award; 
(ii) information collected in accordance with subsection (c) 
on additional investment from any source, other than first 
phase or second phase SBIR or STTR awards, to further the 
research and development conducted under the award; and 
(iii) any other information received in connection with the 
award that the Administrator, in conjunction with the SBIR 
and STTR managers of Federal agencies, considers relevant 
and appropriate; 
(B) includes any narrative information that a small business 
concern receiving a second phase award voluntarily submits to fur-
ther describe the outputs and outcomes of its awards; 
(C) includes for each applicant for a first phase or second phase 
award that does not receive such an award— 
(i) the name, size, and location, and an identifying number 
assigned by the Administration; 
(ii) an abstract of the project; and 
(iii) the Federal agency to which the application was made; 
and 
(D) includes any other data collected by or available to any Fed-
eral agency that the Federal agency considers may be useful for 
SBIR or STTR evaluation. 
(2) USE.—The database under paragraph (1) shall be available for 
use solely— 
(A) for program evaluation purposes by the Federal Govern-
ment; or 
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(B) in accordance with policy directives issued by the Adminis-
trator, by other authorized persons that are subject to a use and 
nondisclosure agreement with the Federal Government covering 
the use of the database. 
(c) UPDATING OF INFORMATION.— 
(1) IN GENERAL.—A small business concern applying for a second 
phase award under this division shall be required to update information 
in the database established under this section for any prior second 
phase award received by that small business concern. 
(2) APPORTIONMENT.—In complying with this subsection, a small 
business concern may apportion sales or additional investment informa-
tion relating to more than one second phase award among those 
awards, if the small business concern notes the apportionment for each 
award. 
(3) UPDATES AT TERMINATION.— 
(A) IN GENERAL.—A small business concern receiving a second 
phase award under this division shall update information in the 
database concerning that award at the termination of the award 
period. 
(B) VOLUNTARY UPDATES.—The Administrator shall request a 
small business concern described in subparagraph (A) to volun-
tarily update such information described in subparagraph (A) an-
nually after termination for a period of 5 years. 
(d) PROTECTION OF INFORMATION.—Information provided under sub-
section (b) or (c) shall be considered privileged and confidential and not 
subject to disclosure under section 552 of title 5. 
(e) EFFECT OF INCLUSION OF INFORMATION IN DATABASE.—Inclusion 
of information in the database under this section shall not be considered 
to be publication for purposes of subsection (a) or (b) of section 102 of title 
35. 
§ 26342. Third phase agreements 
(a) IN GENERAL.—In the case of a small business concern that is award-
ed a funding agreement for the second phase of an SBIR or STTR, a Fed-
eral agency may enter into a third phase agreement with the small business 
concern for additional work to be performed during or after the second 
phase period. 
(b) PROCEDURES.—The second phase funding agreement with the small 
business concern may, at the discretion of the Federal agency awarding the 
agreement, set out the procedures applicable to third phase agreements with 
that Federal agency or any other Federal agency. 
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(c) INTELLECTUAL PROPERTY RIGHTS.—A funding agreement under an 
SBIR or STTR shall include provisions setting forth the respective rights 
of the United States and the small business concern with respect to— 
(1) intellectual property rights; and 
(2) any right to carry out follow-on research. 
§ 26343. Inclusion of SBIR and STTR information in stra-
tegic plans 
Program information relating to SBIRs and STTRs shall be included by 
a Federal agency in any update or revision required of the Federal agency 
under section 306(b) of title 5. 
§ 26344. Simplified reporting requirements 
(a) IN GENERAL.—The Administrator shall work with SBIR agencies and 
STTR agencies to standardize reporting requirements for the collection of 
data from SBIR or STTR applicants and awardees, including data for in-
clusion in the database under section 26341 of this title, taking into consid-
eration the unique needs of each Federal agency, and to the extent possible, 
permitting the updating of previously reported information by electronic 
means. 
(b) MINIMIZATION OF BURDEN.—The reporting requirements described 
in subsection (a) shall be designed to minimize the burden on small business 
concerns. 
§ 26345. Federal and State Technology Partnership program 
(a) DEFINITIONS.—In this section: 
(1) APPLICANT.—The term ‘‘applicant’’ means an entity, organiza-
tion, or individual that submits a proposal for an award or a coopera-
tive agreement under this section. 
(2) BUSINESS ADVICE AND COUNSELING.—The term ‘‘business ad-
vice and counseling’’ means advice and assistance on matters described 
in subsection (f) to small business concerns to guide small business 
concerns through the SBIR and STTR process, from application to 
award and successful completion of each phase of an SBIR or STTR. 
(3) FAST PROGRAM.—The term ‘‘FAST program’’ means the Fed-
eral and State Technology Partnership program established under sub-
section (b). 
(4) MENTOR.—The term ‘‘mentor’’ means an individual described in 
subsection (f). 
(5) MENTORING NETWORK.—The term ‘‘mentoring network’’ means 
an association, organization, coalition, or other entity (including an in-
dividual) that meets the requirements of subsection (f). 
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(6) RECIPIENT.—The term ‘‘recipient’’ means a person that receives 
an award or becomes party to a cooperative agreement under this sec-
tion. 
(7) STATE.—The term ‘‘State’’ means a State, the District of Co-
lumbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. 
(b) ESTABLISHMENT OF FAST PROGRAM.—The Administrator shall es-
tablish a program to be known as the Federal and State Technology Part-
nership program or FAST program, the purpose of which shall be to 
strengthen the technological competitiveness of small business concerns in 
the States. 
(c) GRANTS AND COOPERATIVE AGREEMENTS.— 
(1) JOINT REVIEW.—In carrying out the FAST program under this 
section, the Administrator and the SBIR managers at the National 
Science Foundation and the Department of Defense shall jointly review 
proposals submitted by applicants and may make awards or enter into 
cooperative agreements under this section based on the factors for con-
sideration specified in paragraph (2), to enhance or develop in a 
State— 
(A) technology research and development by small business con-
cerns; 
(B) technology transfer from university research to technology- 
based small business concerns; 
(C) technology deployment and diffusion benefiting small busi-
ness concerns; 
(D) the technological capabilities of small business concerns 
through the establishment or operation of consortia comprised of 
entities, organizations, or individuals, including— 
(i) State and local development agencies and entities; 
(ii) representatives of technology-based small business con-
cerns; 
(iii) industries and emerging companies; 
(iv) universities; and 
(v) small business development centers; and 
(E) outreach, financial support, and technical assistance to 
technology-based small business concerns participating in or inter-
ested in participating in an SBIR, including initiatives— 
(i) to make grants or loans to companies to pay a portion 
or all of the cost of developing SBIR proposals; 
(ii) to establish or operate a mentoring network within the 
FAST program to provide business advice and counseling 
that will assist small business concerns that have been identi-
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fied by FAST program participants, program managers of 
participating SBIR agencies, the Administrator, or other enti-
ties that— 
(I) are knowledgeable about the SBIRs and STTRs as 
good candidates for SBIRs and STTRs; and 
(II) would benefit from mentoring, in accordance with 
subsection (f); 
(iii) to create or participate in a training program for indi-
viduals providing SBIR outreach and assistance at the State 
and local levels; and 
(iv) to encourage the commercialization of technology devel-
oped through SBIR funding. 
(2) SELECTION CONSIDERATIONS.—In making awards or entering 
into cooperative agreements under this section, the Administrator and 
the SBIR managers at the National Science Foundation and the De-
partment of Defense— 
(A) may consider only proposals by applicants that intend to 
use a portion of the Federal assistance provided under this section 
to provide outreach, financial support, or technical assistance to 
technology-based small business concerns participating in or inter-
ested in participating in an SBIR; and 
(B) shall consider, at a minimum— 
(i) whether the applicant has demonstrated that the assist-
ance to be provided would address unmet needs of small busi-
ness concerns in the community, and whether it is important 
to use Federal funding for the proposed activities; 
(ii) whether the applicant has demonstrated that a need ex-
ists to increase the number or success of small high-tech-
nology businesses in the State, as measured by the number 
of first phase and second phase SBIR awards that have his-
torically been received by small business concerns in the 
State; 
(iii) whether the projected costs of the proposed activities 
are reasonable; 
(iv) whether the proposal integrates and coordinates the 
proposed activities with other State and local programs assist-
ing small high-technology firms in the State; 
(v) the manner in which the applicant will measure the re-
sults of the activities to be conducted; and 
(vi) whether the proposal addresses the needs of— 
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(I) small business concerns owned and controlled by 
women; 
(II) small business concerns owned and controlled by 
minorities; and 
(III) small business concerns located in areas that 
have historically not participated in the SBIR and STTR 
programs. 
(3) PROPOSAL LIMIT.—Not more than one proposal may be sub-
mitted for inclusion in the FAST program under this section to provide 
services in any one State in any one fiscal year. 
(4) PROCESS.— 
(A) PROPOSALS AND APPLICATION.—A proposal or application 
for assistance under this section shall be in such form and subject 
to such procedures as the Administrator shall establish. 
(B) REGULATIONS.—The Administrator shall promulgate regu-
lations establishing standards for the consideration of proposals 
under paragraph (2), including standards regarding each of the 
considerations described in paragraph (2)(B). 
(d) COOPERATION AND COORDINATION.—In carrying out the FAST pro-
gram, the Administrator shall cooperate and coordinate with— 
(1) SBIR agencies; and 
(2) entities, organizations, and individuals actively engaged in en-
hancing or developing the technological capabilities of small business 
concerns, including— 
(A) State and local development agencies and entities; 
(B) State committees established under the Experimental Pro-
gram to Stimulate Competitive Research of the National Science 
Foundation established under section 113 of the National Science 
Foundation Act of 1988 (42 U.S.C. 1862g); 
(C) State science and technology councils; and 
(D) representatives of technology-based small business concerns. 
(e) REQUIREMENTS.— 
(1) COMPETITIVE
BASIS.—An award under this section shall be 
made or a cooperative agreement under this section shall be entered 
into on a competitive basis. 
(2) MATCHING REQUIREMENTS.— 
(A) AMOUNT OF NON-FEDERAL SHARE.— 
(i) IN GENERAL.—The non-Federal share of the cost of an 
activity (other than a planning activity) carried out using an 
award or under a cooperative agreement under this section 
shall be— 
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(I) one-third, in the case of a recipient that will serve 
small business concerns located in one of the 18 States 
receiving the fewest SBIR first phase awards; 
(II) except as provided in subparagraph (B), one-half, 
in the case of a recipient that will serve small business 
concerns located in one of the 16 States receiving the 
greatest number of SBIR first phase awards; and 
(III) except as provided in subparagraph (B), three- 
sevenths, in the case of a recipient that will serve small 
business concerns located in a State not described in 
subclause (I) or (II) that is receiving SBIR first phase 
awards. 
(ii) RANKINGS.—For purposes of clause (i), the Adminis-
trator shall reevaluate the ranking of a State once every 2 fis-
cal years, based on the most recent statistics compiled by the 
Administrator. 
(B) LOW-INCOME AREAS.—To the extent that the Federal con-
tribution to the cost of the activity will be directly allocated by a 
recipient described in subparagraph (A) to serve small business 
concerns located in a qualified census tract, the non-Federal share 
of the cost of an activity carried out using an award or under a 
cooperative agreement under this section shall be one-third. 
(C) TYPES OF FUNDING.— 
(i) IN GENERAL.—The non-Federal share of the cost of an 
activity carried out by a recipient shall be comprised of not 
less than 50 percent cash and not more than 50 percent of 
indirect costs and in-kind contributions. 
(ii) NON-FEDERAL
SOURCE.—None of the non-Federal 
share of costs or contributions may be derived from funds 
from any other Federal program. 
(3) DURATION.—An award may be made or a cooperative agreement 
may be entered into under this section for multiple years, not to exceed 
5 years in total. 
(f) MENTORING NETWORKS.— 
(1) IN GENERAL.—A recipient of an award or participant in a coop-
erative agreement under this section may use a reasonable amount of 
the assistance for the establishment of a mentoring network under this 
section. 
(2) CRITERIA.—A mentoring network established using assistance 
under this section shall— 
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(A) provide business advice and counseling to high technology 
small business concerns located in the State or region served by 
the 
mentoring 
network 
and 
identified 
under 
subsection 
(c)(1)(E)(ii) as potential candidates for an SBIR or STTR; 
(B) identify volunteer mentors who— 
(i) are persons associated with a small business concern 
that has successfully completed one or more SBIR or STTR 
funding agreements; and 
(ii) have agreed to guide small business concerns through 
all stages of the SBIR or STTR process, including providing 
assistance relating to— 
(I) proposal writing; 
(II) marketing; 
(III) Government accounting; 
(IV) Government audits; 
(V) project facilities and equipment; 
(VI) human resources; 
(VII) third phase partners; 
(VIII) commercialization; 
(IX) venture capital networking; and 
(X) other matters relevant to the SBIRs and STTRs; 
(C) have experience working with small business concerns par-
ticipating in the SBIRs and STTRs; 
(D) contribute information to the national database referred to 
in paragraph (3); and 
(E) agree to reimburse volunteer mentors for out-of-pocket ex-
penses related to service as a mentor under this section. 
(3) MENTORING DATABASE.—The Administrator, directly or by con-
tract, shall— 
(A) include in the database required by section 26341 of this 
title, in cooperation with the SBIR program, STTR program, and 
FAST program, information on mentoring networks and mentors 
participating under this subsection, including a description of their 
areas of expertise; 
(B) work cooperatively with mentoring networks to maintain 
and update the database; and 
(C) take such action as is necessary to aggressively promote 
mentoring networks under this subsection. 
(g) TERMINATION.—The authority to carry out the FAST program under 
this section terminates on September 30, 2005. 
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§ 26346. Second phase and third phase awards for testing 
and evaluation of products, services, and tech-
nologies for use in a technical or weapons system 
An award for testing and evaluation of a product, service, or technology 
for use in a technical or weapons system may be made in the second or 
third phase of an SBIR or STTR. 
§ 26347. Innovation in energy efficiency 
(a) FEDERAL AGENCY ENERGY-RELATED PRIORITY.—In carrying out its 
duties under this division relating to SBIR and STTR solicitations by Fed-
eral agencies, the Administrator shall— 
(1) ensure that Federal agencies give high priority to small business 
concerns that participate in or conduct energy efficiency or renewable 
energy system research and development projects; and 
(2) include in the annual report to Congress under section 10710(a) 
of this title a determination of whether the priority described in para-
graph (1) is being carried out. 
(b) CONSULTATION.—The Administrator shall consult with the heads of 
other Federal agencies in determining whether priority has been given to 
small business concerns that participate in or conduct energy efficiency or 
renewable energy system research and development projects, as required by 
this section. 
(c) GUIDELINES.—The Administrator shall, as soon as practicable after 
December 19, 2007, issue guidelines and directives to assist Federal agen-
cies in meeting the requirements of this section. 
DIVISION I—SMALL BUSINESS DEVELOPMENT 
CENTER PROGRAM 
CHAPTER 271—SMALL BUSINESS DEVELOPMENT 
CENTER PROGRAM 
Sec. 
27101.
Definitions. 
27102.
Financial assistance agreements. 
27103.
Plans. 
27104.
Services. 
27105.
Export enhancement plans. 
27106.
Assistance from Federal laboratories. 
27107.
Assistance from the National Science Foundation. 
27108.
Assistance from the National Aeronautics and Space Administration. 
27109.
National Small Business Development Center Advisory Board. 
27110.
Small business development center advisory boards. 
27111.
Program examination and accreditation. 
27112.
Limitations on authority. 
27113.
Prohibition of fees for counseling service. 
27114.
Veterans assistance and services program 
§ 27101. Definitions 
In this chapter: 
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(1) ASSOCIATE
ADMINISTRATOR.—The term ‘‘Associate Adminis-
trator’’ means the Associate Administrator for Small Business Develop-
ment Centers. 
(2) FINANCIAL ASSISTANCE.—The term ‘‘financial assistance’’ means 
financial assistance under a grant, contract, or cooperative agreement. 
(3) FINANCIAL ASSISTANCE AGREEMENT.—The term ‘‘financial as-
sistance agreement’’ means a grant agreement, contract, or cooperative 
agreement under which financial assistance is provided under this 
chapter. 
(4) PROGRAM.—The term ‘‘program’’ means the small business de-
velopment center program under this chapter. 
(5) QUALIFIED ENTITY.—The term ‘‘qualified entity’’ means— 
(A) a public or private institution of higher education (including 
a land-grant college or university, a college or school of business, 
engineering, commerce, or agriculture, and a community college or 
junior college); 
(B) a women’s business center operating under chapter 273; 
and 
(C) any other entity if the entity, on December 31, 1990, was 
receiving a grant or was a party to a contract or cooperative 
agreement under this chapter. 
(7) STATE.—The term ‘‘State’’ means a State, the District of Co-
lumbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. 
§ 27102. Financial assistance agreements 
(a) IN GENERAL.—Under a program to be known as the small business 
development center program, the Administrator may provide financial as-
sistance to a qualified entity to assist in establishing a small business devel-
opment center project for the purpose of providing— 
(1) a small business oriented employment or natural resources devel-
opment program; 
(2) studies, research, and counseling concerning the managing, fi-
nancing, and operation of small business concerns; 
(3) management and technical assistance regarding participation by 
small business concerns in international markets, export promotion, 
and technology transfer; 
(4) delivery or distribution of services and information in connection 
with an activity described in paragraph (1), (2), or (3); and 
(5) providing access to business analysts that can refer small busi-
ness concerns to available experts. 
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(b) REQUIREMENTS.—The Administrator shall require an applicant for fi-
nancial assistance under this chapter with performance commencing on or 
after January 1, 1992, to— 
(1) have its own budget; and 
(2) primarily use institutions of higher education and women’s busi-
ness centers operating under chapter 273 to provide services to the 
small business community. 
(c) TERM.—The term of a financial assistance agreement under sub-
section (a) shall be made on a calendar year basis or to coincide with the 
Federal fiscal year. 
(d) COOPERATION.—A small business development center shall work in 
close cooperation with the Administration’s regional and local offices, the 
Department of Commerce, appropriate Federal, State, and local agencies 
and the small business community to serve as an active information dissemi-
nation and service delivery mechanism for existing trade promotion, trade 
finance, trade adjustment, trade remedy, and trade data collection programs 
of particular utility for small business concerns. 
(e) MANAGEMENT.— 
(1) IN GENERAL.—The program shall be under the general manage-
ment and oversight of the Administrator for the delivery of programs 
and services to the small business community. 
(2) PROGRAMS AND SERVICES.—Programs and services referred to 
in paragraph (1) shall be jointly developed, negotiated, and agreed on, 
with full participation of a qualified entity and the Administrator, 
under an executed financial assistance agreement between the qualified 
entity and the Administrator. 
(f) ASSOCIATION OF SMALL BUSINESS DEVELOPMENT CENTERS.— 
(1) IN GENERAL.—Small business development centers may form an 
Association to pursue matters of common concern. 
(2) RECOGNITION; DOCUMENTS.— 
(A) IN GENERAL.—If more than a majority of the small busi-
ness development centers that are operating under agreements 
with the Administrator are members of an Association formed 
under paragraph (1), the Administrator shall— 
(i) recognize the existence and activities of the Association; 
and 
(ii) consult with the Association and develop documents— 
(I) announcing the annual scope of activities under 
this chapter; 
(II) requesting proposals to deliver assistance as pro-
vided in this chapter; and 
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(III) governing the general operations and administra-
tion of the program, specifically including the develop-
ment of regulations and a uniform negotiated financial 
assistance agreement for use on an annual basis when 
entering into individual negotiated financial assistance 
agreements with small business development centers. 
(B) INCORPORATION OF CERTAIN PROVISIONS.—In regulations 
under subparagraph (A)(ii)((III), provisions governing audits, cost 
principles and administrative requirements for financial assistance 
that are included in uniform requirements of Office of Manage-
ment and Budget Circulars shall be incorporated by reference and 
shall not be set forth in summary or other form. 
(3) LEVERAGING OF RESOURCES.—On an annual basis, a small busi-
ness development center shall review and coordinate public and private 
partnerships and cosponsorships with the Administrator for the pur-
pose of more efficiently leveraging available resources on a national and 
a State basis. 
(g) FUNDING.— 
(1) MATCHING AMOUNT.— 
(A) IN GENERAL.—The Administrator shall require as a condi-
tion of any financial assistance agreement (or amendment or 
modification of a financial assistance agreement) made to a quali-
fied entity under this chapter that a matching amount (excluding 
any fees collected from recipients of such assistance) equal to the 
amount of the financial assistance be provided from sources other 
than the Federal Government, to be comprised of not less than 50 
percent cash and not more than 50 percent of indirect costs and 
in-kind contributions. 
(B) RESTRICTION.—The matching amount described in sub-
paragraph (A) shall not include any indirect costs or in-kind con-
tributions derived from any Federal program. 
(2) FUNDING FORMULA.— 
(A) IN
GENERAL.—Subject to subparagraph (C), the total 
amount of financial assistance received by recipients of financial 
assistance in a State under this section shall be equal to an 
amount determined in accordance with the following formula: 
(i) PRO RATA BASIS.—The annual amount made available 
under section 10903(a) of this title for the small business de-
velopment center program, less any reductions made for ex-
penses authorized by subparagraph (E), shall be divided on 
a pro rata basis, based on the percentage of the population 
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of each State, as compared with the population of the United 
States. 
(ii) MINIMUM FUNDING LEVEL.—If the pro rata amount 
calculated under clause (i) for any State is less than the min-
imum funding level under subparagraph (C), the Adminis-
trator shall determine the aggregate amount necessary to 
achieve that minimum funding level for each such State. 
(iii) DEDUCTION.—The aggregate amount calculated under 
clause (ii) shall be deducted from the amount calculated 
under clause (i) for States eligible to receive more than the 
minimum funding level. The deductions shall be made on a 
pro rata basis, based on the population of each such State, 
as compared with the total population of all such States. 
(iv) ADDITION.—The aggregate amount deducted under 
clause (iii) shall be added to the amount of financial assist-
ance of the States that are not eligible to receive more than 
the minimum funding level in order to achieve the minimum 
funding level for each such State, except that the eligible 
amount of financial assistance to any State shall not be re-
duced to an amount below the minimum funding level. 
(B) DETERMINATION OF AMOUNT OF FINANCIAL ASSISTANCE.— 
The amount of financial assistance for which a State is eligible to 
apply under this paragraph shall be the amount determined under 
subparagraph (A), subject to any modifications required under 
subparagraph (C), and shall be based on the amount available for 
the fiscal year in which performance of the financial assistance 
agreement commences, but not including amounts distributed in 
accordance with subparagraph (D). The total amount of financial 
assistance received by recipients of financial assistance in a State 
under any provision of this paragraph shall not exceed the amount 
of matching funds from sources other than the Federal Govern-
ment, as required under paragraph (1). 
(C) MINIMUM FUNDING LEVEL.—The amount of the minimum 
funding level for each State shall be determined for each fiscal 
year based on the amount made available for that fiscal year to 
carry out this chapter, as follows: 
(i) NOT
LESS
THAN
$81,500,000
AND
NOT
MORE
THAN 
$90,000,000 MADE AVAILABLE.—If the amount made available 
is not less than $81,500,000 and not more than $90,000,000, 
the minimum funding level shall be $500,000. 
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(ii) LESS
THAN
$81,500,000
MADE
AVAILABLE.—If the 
amount made available is less than $81,500,000, the min-
imum funding level shall be the remainder of $500,000 minus 
a percentage of $500,000 equal to the percentage amount by 
which the amount made available is less than $81,500,000. 
(iii) MORE
THAN
$90,000,000
MADE
AVAILABLE.—If the 
amount made available is more than $90,000,000, the min-
imum funding level shall be the sum of $500,000 plus a per-
centage of $500,000 equal to the percentage amount by which 
the amount made available exceeds $90,000,000. 
(D) DISTRIBUTIONS.—Subject to subparagraph (C), if qualified 
entities in any State do not apply for, or use the full funding eligi-
bility for the State for a fiscal year, the Administrator shall dis-
tribute the remaining funds as follows: 
(i) AMOUNT LESS THAN THE AMOUNT RECEIVED IN FISCAL 
YEAR 2000.—If the amount of financial assistance to any 
State is less than the amount received by recipients of finan-
cial assistance in that State in fiscal year 2000, the Adminis-
trator shall distribute the remaining funds, on a pro rata 
basis, based on the percentage of shortage of each such State, 
as compared with the total amount of such remaining funds 
available, to the extent necessary to increase the amount of 
the financial assistance to the amount received by recipients 
of financial assistance in that State in fiscal year 2000, or 
until such funds are exhausted, whichever first occurs. 
(ii) REMAINING AMOUNT.—If any funds remain after appli-
cation of clause (i), the remaining amount may be distributed 
as supplemental financial assistance to applicants in any 
State, as the Administrator determines, in the discretion of 
the Administrator, to be appropriate, after consultation with 
the Association. 
(E) USE OF AMOUNTS.— 
(i) IN GENERAL.—Of the amounts made available in any 
fiscal year to carry out this chapter— 
(I) not more than $500,000 may be used by the Ad-
ministrator to pay expenses described in paragraphs (2) 
to (4) of section 10903(a) of this title; and 
(II) not more than $500,000 may be used by the Ad-
ministrator to pay the examination expenses described in 
section 10903(a)(5) of this title. 
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(ii) LIMITATION.—No funds described in clause (i) may be 
used for examination expenses under section 10903(a)(5) of 
this title if the use would reduce the amount of financial as-
sistance made available under subparagraph (A)(i) to less 
than $85,000,000 (after excluding any amounts provided in 
appropriations Acts, or accompanying report language, for 
specific institutions or for purposes other than the general 
program) or would further reduce the amount of such finan-
cial assistance below that amount. 
(F) EXCLUSIONS.—Financial assistance provided to grant re-
cipients in a State by the Administrator or another Federal agency 
to carry out subsection (j) or section 27104(b)(7) of this title, or 
for supplemental financial assistance under subparagraph (D)(ii) 
of this paragraph, shall not be included in the calculation of max-
imum funding for a State under subparagraph (B) of this para-
graph. 
(h) PORTABLE ASSISTANCE FOR STARTUP AND SUSTAINABILITY NON- 
MATCHING FINANCIAL ASSISTANCE PROGRAMS.— 
(1) IN
GENERAL.—From the funds appropriated under section 
10903(h) of this title, the Administrator shall reserve not less than 
$1,000,000 for each fiscal year to develop portable assistance for start-
up and sustainability non-matching financial assistance programs to be 
conducted by eligible small business development centers in commu-
nities that are economically challenged as a result of a business or gov-
ernment facility downsizing or closing that has resulted in the loss of 
jobs or small business instability. 
(2) MAXIMUM AMOUNT.—Non-matching financial assistance under 
this subsection shall not exceed $100,000. 
(3) USE.—Non-matching financial assistance under this subsection 
shall be used for small business development center personnel expenses 
and related small business programs and services. 
(i) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT CEN-
TERS.— 
(1) IN GENERAL.—Subject to paragraph (2), a small business devel-
opment center may enter into a contract with a Federal agency to pro-
vide specific assistance to small business concerns. 
(2) CONTRACT PREREQUISITES.— 
(A) IN GENERAL.—Before bidding on a contract under para-
graph (1), a small business development center shall receive ap-
proval from the Associate Administrator of the subject and general 
scope of the contract. 
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(B) APPROVAL.—Approval of a contract under paragraph (1) 
shall be based on a determination that— 
(i) the contract will provide assistance to small business 
concerns; and 
(ii) performance of the contract will not hinder the small 
business development center in carrying out the terms of the 
financial assistance agreement received by the small business 
development center from the Administrator. 
(3) EXEMPTION FROM MATCHING REQUIREMENT.—A contract under 
this subsection shall not be subject to the matching funds or eligibility 
requirements of subsection (g). 
(4) NONAPPLICABILITY
TO
CERTAIN
CONTRACTING
GOALS.—Not-
withstanding any other provision of law, a contract for assistance under 
this subsection shall not be applied to a Federal agency’s contracting 
goal under section 25106 of this title for small business concerns 
owned and controlled by socially and economically disadvantaged indi-
viduals, small business concerns owned and controlled by women, or 
other small business concerns. 
(j) ADDITIONAL FINANCIAL ASSISTANCE.— 
(1) IN GENERAL.—A qualified entity that is funded by the Adminis-
trator as a small business development center may apply to the Admin-
istrator for additional financial assistance to be used solely to assist, 
as provided in paragraphs (2) to (7) of section 27104(b), in— 
(A) the development and enhancement of exports by small busi-
ness concerns; 
(B) technology transfer; and 
(C) outreach, development, and enhancement of minority-owned 
small business startups or expansions, HUBZone small business 
concerns, veteran-owned small business startups or expansions, 
and women-owned small business startups or expansions, in com-
munities affected by base closings or military or corporate 
downsizing or in rural or underserved communities. 
(2) COMPLIANCE REQUIREMENT.—An applicant applying for addi-
tional financial assistance under paragraph (1) shall comply with all of 
the provisions of this chapter, including providing matching funds. 
(3) FUNDING.—Funding under this subsection shall be effective for 
any fiscal year to the extent provided in advance in appropriations 
Acts. 
(4) LIMITATION
ON
AMOUNT
OF
GRANT.—No recipient of funds 
under this subsection shall receive financial assistance that would ex-
ceed its pro rata share of a $15,000,000 program based on the popu-
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lations to be served by the small business development center as com-
pared with the total population of the United States. 
(5) MINIMUM STATE ELIGIBILITY AMOUNT.—The minimum amount 
of eligibility for recipients of financial assistance in any State shall be 
$100,000. 
(6) FINANCIAL ASSISTANCE TO NONPROFIT ENTITIES.— 
(A) IN GENERAL.—In a State described in subparagraph (B), 
the Administrator may provide financial assistance to a nonprofit 
entity in the State to carry out the activities specified in this sub-
section. 
(B) STATES.—A State referred to in subparagraph (A) is a 
State in which— 
(i) the Administrator has not provided financial assistance 
under subsection (a); or 
(ii) no application for financial assistance has been made 
by a small business development center under this subsection 
within 60 days after the later of— 
(I) the effective date of a financial assistance agree-
ment under subsection (a) to the small business develop-
ment center; or 
(II) the date on which the Administrator notifies the 
financial assistance recipient funded under subsection (a) 
that funds are available for applications for financial as-
sistance under this subsection. 
(C) MATCHING FUNDS.—A nonprofit entity that receives finan-
cial assistance under this paragraph shall comply with the match-
ing funds requirement of subsection (g). 
(D) APPROPRIATIONS.—Financial assistance under this para-
graph shall be effective for any fiscal year only to the extent pro-
vided in advance in an appropriations Act. 
(E) PRO RATA SHARE.—The amount of financial assistance pro-
vided under this paragraph in a State shall be limited to the pro 
rata share provisions of paragraph (4). 
(k) PRIVACY REQUIREMENTS.— 
(1) IN GENERAL.—A small business development center, consortium 
of small business development centers, or contractor or agent of a small 
business development center may not disclose the name, address, or 
telephone number of any individual or small business concern receiving 
assistance under this chapter without the consent of the individual or 
small business concern unless— 
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(A) the Administrator is ordered to make such a disclosure by 
a court in any civil or criminal enforcement action initiated by a 
Federal agency or State agency; or 
(B) the Administrator considers such a disclosure to be nec-
essary for the purpose of conducting a financial audit of a small 
business development center. 
(2) LIMITATION.—A disclosure under this paragraph (1)(B) shall be 
limited to the information necessary for an audit. 
(3) USE OF INFORMATION BY THE ADMINISTRATOR.—This chapter 
does not— 
(A) restrict access by the Administrator to program activity 
data; or 
(B) preclude the Administrator from using client information to 
conduct client surveys. 
(4) REGULATIONS.— 
(A) IN GENERAL.—The Administrator shall issue regulations to 
establish standards— 
(i) for disclosures with respect to financial audits under 
paragraph (1)(B); and 
(ii) for client surveys under paragraph (3)(B), including 
standards for oversight of such surveys and for dissemination 
and use of client information. 
(B) MAXIMUM PRIVACY PROTECTION.—Regulations under this 
paragraph, shall, to the extent practicable, provide for the max-
imum amount of privacy protection. 
(C) INSPECTOR GENERAL.—Until the effective date of regula-
tions under this paragraph, any client survey and the use of such 
information shall be approved by the Inspector General of the Ad-
ministration, who shall include such approval in a semiannual re-
port. 
§ 27103. Plans 
(a) PROVISION
OF FINANCIAL ASSISTANCE CONSISTENT WITH AREA 
PLAN.—Financial assistance shall not be made available to a qualified enti-
ty if approving the assistance would be inconsistent with a plan for the area 
of a State in which service is to be provided that has been adopted by an 
agency recognized by the State as authorized to adopt an area plan and ap-
proved by the Administrator in accordance with standards and requirements 
established under this chapter. 
(b) PLAN.— 
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(1) IN GENERAL.—A qualified entity may apply to participate in the 
small business development center program by submitting to the Ad-
ministrator for approval a plan that— 
(A) identifies the entities authorized under this chapter to par-
ticipate in the small business development center program; 
(B) identifies the geographic area to be served; 
(C) describes the services that the applicant would provide and 
the method for delivering the services; 
(D) includes a budget; and 
(E) includes any other information and assurances that the Ad-
ministrator may require to ensure that the qualified entity will 
carry out the activities eligible for assistance. 
(2) ACTION BY THE ADMINISTRATOR.— 
(A) IN
GENERAL.—The Administrator may approve, condi-
tionally approve, or reject a qualified entity plan or combination 
of plans submitted. 
(B) REVIEW.—In all cases, the Administrator shall review a 
qualified entity plan— 
(i) for conformity with an area plan approved under sub-
section (a); and 
(ii) with a view toward providing small business concerns 
with the most comprehensive and coordinated assistance in 
the State or part of a State to be served. 
(c) ASSISTANCE OUTSIDE THE STATE.—The Administrator may permit 
a small business development center to provide advice, information, and as-
sistance, as described in section 27104 of this title, to small business con-
cerns located outside the State in which the small business development cen-
ter is located, but only to the extent that the small business concerns are 
located within close geographical proximity to the small business develop-
ment center, as determined by the Administrator. 
§ 27104. Services 
(a) IN GENERAL.—A small business development center shall assist small 
business concerns in solving problems concerning operations, manufacturing, 
engineering, technology exchange and development, personnel administra-
tion, marketing, sales, merchandising, finance, accounting, business strategy 
development, and other disciplines required for small business growth and 
expansion, innovation, increased productivity, and management improve-
ment, and for decreasing industry economic concentrations. 
(b) SERVICES TO BE PROVIDED.—Services provided by a small business 
development center shall include— 
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(1) furnishing one-to-one individual counseling to small business con-
cerns, including— 
(A) working with individuals to increase awareness of basic 
credit practices and credit requirements; 
(B) working with individuals to develop business plans, financial 
packages, credit applications, and contract proposals; 
(C) working with the Administrator to develop and provide in-
formational tools for use in working with individuals on pre-busi-
ness startup planning, existing business expansion, and export 
planning; and 
(D) working with individuals referred by the local offices of the 
Administration and participating lenders; 
(2) assisting in technology transfer, research and development (in-
cluding applied research), and coupling from existing sources to small 
business concerns, including— 
(A) working to increase the access of small business concerns 
to the capabilities of automated flexible manufacturing systems; 
(B) working through existing networks and developing new net-
works for technology transfer that encourage partnership between 
the small business and academic communities to help commer-
cialize university-based research and development and introduce 
university-based engineers and scientists to their counterparts in 
small technology-based firms; and 
(C) exploring the viability of developing shared production facili-
ties, under appropriate circumstances; 
(3)(A) in cooperation with the Department of Commerce and other 
relevant Federal agencies, actively assisting small business concerns in 
exporting by— 
(i) identifying and developing potential export markets for small 
business concerns; 
(ii) facilitating export transactions for small business concerns; 
(iii) developing linkages between small business concerns and 
prescreened foreign buyers; 
(iv) assisting small business concerns in participating in inter-
national trade shows; 
(v) assisting small business concerns in obtaining export financ-
ing; and 
(vi) facilitating the development or reorientation of marketing 
and production strategies; and 
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(B) where appropriate, working with the Administrator in coopera-
tion with the State to establish a State international trade center for 
the purposes described in subparagraph (A); 
(4)(A) developing a program in conjunction with the Export-Import 
Bank of the United States and local and regional Administration of-
fices that will enable the small business development center to serve as 
an information network and to assist small business concern applicants 
for financing programs of the Export-Import Bank of the United 
States; and 
(B) otherwise identifying and helping to make available export fi-
nancing programs to small business concerns; 
(5) working closely with the small business community, small busi-
ness consultants, State agencies, universities, and other appropriate 
groups to make translation services more readily available to small 
business concerns doing business, or attempting to develop business, in 
foreign markets; 
(6) cooperating with the Department of Commerce and other rel-
evant Federal agencies to increase access to available export market in-
formation systems, including the Commercial Information Management 
System; 
(7) assisting small business concerns in developing and implementing 
strategic business plans to timely and effectively respond to the 
planned closure (or reduction) of a Department of Defense facility 
within the community, or actual or projected reductions in small busi-
ness concerns’ business base due to the actual or projected termination 
(or reduction) of a Department of Defense program or a contract in 
support of a Department of Defense program by— 
(A) developing broad economic assessments of the adverse im-
pacts of— 
(i) the closure (or reduction) of the Department of Defense 
facility on the small business concerns providing goods or 
services to the facility or to the military and civilian personnel 
stationed or working at the facility; and 
(ii) the termination (or reduction) of a Department of De-
fense program (or contracts under a Department of Defense 
program) on the small business concerns participating in the 
program as a prime contractor, subcontractor, or supplier at 
any tier; 
(B) developing, in conjunction with appropriate Federal, State, 
and local governmental entities and private sector organizations, 
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the parameters of a transition adjustment program adaptable to 
the needs of individual small business concerns; 
(C) conducting appropriate programs to inform the affected 
small business community regarding the anticipated adverse im-
pacts identified under subparagraph (A) and the economic adjust-
ment assistance available to small business concerns; and 
(D) assisting small business concerns in developing and imple-
menting an individualized transition business plan; 
(8)(A) maintaining current information concerning Federal, State, 
and local regulations that affect small business concerns and counsel 
small business concerns on methods of compliance; and 
(B) providing counseling and technology development when necessary 
to help small business concerns find solutions for complying with envi-
ronmental, energy, health, safety, and other Federal, State, and local 
regulations; 
(9) coordinating and conducting research into technical and general 
small business problems for which there are no ready solutions; 
(10) providing and maintaining a comprehensive library that con-
tains current information and statistical data needed by small business 
concerns; 
(11) maintaining a working relationship and open communications 
with the financial and investment communities, legal associations, local 
and regional private consultants, and local and regional small business 
groups and associates to help address the various needs of the small 
business community; 
(12) conducting in-depth surveys for local small business groups to 
develop general information regarding the local economy and general 
small business strengths and weaknesses in the locality; 
(13) in cooperation with the Department of Commerce, the Adminis-
trator, and relevant Federal agencies, actively assisting rural small 
business concerns in exporting by— 
(A) identifying and developing potential export markets for 
rural small business concerns; 
(B) facilitating export transactions for rural small business con-
cerns; 
(C) developing linkages between rural small business concerns 
and prescreened foreign buyers; 
(D) assisting rural small business concerns in participating in 
international trade shows; and 
(E) assisting rural small business concerns in obtaining export 
financing and developing marketing and production strategies; 
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(14) assisting rural small business concerns in developing marketing 
and production strategies that will enable rural small business concerns 
to better compete in the domestic market; 
(15) assisting rural small business concerns by— 
(A) providing technical assistance needed by rural small busi-
ness concerns; 
(B) making available managerial assistance to rural small busi-
ness concerns; and 
(C) providing information and assistance in obtaining financing 
for business startups and expansion; 
(16) in conjunction with the United States National Tourism Orga-
nization, assist rural small business concerns in developing the tourism 
potential of rural communities by— 
(A) identifying the cultural, historic, recreational, and scenic re-
sources of rural communities; 
(B) providing assistance to small business concerns in devel-
oping tourism marketing and promotion plans relating to tourism 
in rural areas; and 
(C) assisting small business concerns in obtaining capital for 
starting or expanding businesses primarily serving tourists; 
(17) maintaining lists of local and regional private consultants to 
whom small business concerns can be referred; 
(18) providing information to small business concerns regarding 
compliance with regulatory requirements; 
(19) developing informational publications, establishing resource cen-
ters of reference materials, and distributing compliance guides pub-
lished under section 212(a) of the Small Business Regulatory Enforce-
ment Fairness Act of 1996 (5 U.S.C. 601 note, Public Law 104–121); 
(20) providing small business concern owners with access to a wide 
variety of export-related information by establishing on-line computer 
linkages between small business development centers and an inter-
national trade data information network with ties to the United States 
Export Assistance Center program; and 
(21) providing information and assistance to small business concerns 
with respect to establishing drug-free workplace programs on or before 
October 1, 2006. 
(c) UPGRADING AND MODIFICATION OF SERVICES.—A small business de-
velopment center shall continue to upgrade and modify its services, as need-
ed, in order to meet the changing and evolving needs of the small business 
community. 
(d) LOCATION.— 
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(1) PROXIMITY OF SERVICE.—A small business development center 
shall provide service as close as possible to small business concerns by 
providing extension services and using satellite locations when nec-
essary. 
(2) FACILITIES AND STAFF.—The facilities and staff of a small busi-
ness development center shall be located in such places as to provide 
maximum accessibility and benefits to the small business concerns that 
the small business development center is intended to serve. 
(e) OTHER PROGRAMS.—To the extent possible, a small business develop-
ment center shall make full use of other Federal and State government pro-
grams that are concerned with aiding small business concerns. 
(f) STAFF.—A small business development center shall have a full-time 
staff, including a full-time director who shall have the authority to make 
expenditures under the small business development center’s budget and who 
shall manage the program activities. 
(g) ACCESS.—A small business development center shall have access to— 
(1) business analysts to counsel, assist, and inform small business 
clients; 
(2) technology transfer agents to provide state-of-art technology to 
small business concerns through coupling with national and regional 
technology data sources; 
(3) information specialists to assist in providing information searches 
and referrals to small business; 
(4) part-time professional specialists to conduct research or to pro-
vide counseling assistance whenever the need arises; and 
(5) laboratory facilities and adaptive engineering facilities. 
(h) USE OF SMALL BUSINESS VENDORS.—A small business development 
center shall use and compensate as one of its resources qualified vendors 
that are small business concerns, including private management consultants, 
private consulting engineers, and private testing laboratories, to provide 
services as described in this section to small business concerns on behalf of 
the small business development center. 
(i) COOPERATION IN THE PROVISION OF SERVICES.—In performing the 
services described in subsection (b), a small business development center 
shall work in close cooperation with the Administration’s regional and local 
offices, the local small business community, and appropriate State and local 
agencies. 
(j) INFORMATION SHARING SYSTEM.— 
(1) IN GENERAL.—The Associate Administrator, in consultation with 
the small business development centers, shall develop and implement an 
information sharing system. 
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(2) FINANCIAL ASSISTANCE.— 
(A) IN GENERAL.—Subject to amounts approved in advance in 
appropriations Acts, the Administrator may provide grants or 
enter into cooperative agreements to one or more small business 
development centers to carry out this subsection. 
(B) DURATION.—Financial assistance under subparagraph (A) 
shall be awarded for a period of not more than 5 years. 
(C) MATCHING FUNDS.—The matching funds provisions of sec-
tion 27102 of this title shall not be applicable to a grant or coop-
erative agreement under subparagraph (A). 
(3) FUNCTIONS.—The information sharing system shall— 
(A) allow small business development centers participating in 
the small business development center program to exchange infor-
mation about their programs; and 
(B) provide information central to technology transfer. 
§ 27105. Export enhancement plans 
(a) IN GENERAL.—Where appropriate, a small business development cen-
ter shall work in conjunction with the relevant State agency and the Depart-
ment of Commerce to develop a comprehensive plan for enhancing the ex-
port potential of small business concerns located in the State. 
(b) STATE OFFICE OF INTERNATIONAL TRADE.—An export enhancement 
plan may provide for— 
(1) the cofunding and staffing of a State office of international trade 
within a small business development center, using joint Federal and 
State funding; and 
(2) any other appropriate measures directed at improving the export 
performance of small business concerns in the State. 
§ 27106. Assistance from Federal laboratories 
(a) IN GENERAL.—A laboratory that is operated and funded by the Fed-
eral Government shall cooperate with the Administrator in developing and 
establishing programs to support small business development centers by— 
(1) making facilities and equipment available; 
(2) providing experiment station capabilities in adaptive engineering; 
(3) providing library and technical information processing capabili-
ties; and 
(4) providing professional staff for consulting. 
(b) REIMBURSEMENT.—The Administrator may reimburse a laboratory 
for the provision of services described in subsection (a). 
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§ 27107. Assistance from the National Science Foundation 
The National Science Foundation shall cooperate with the Administrator 
and with small business development centers in developing and establishing 
programs to support small business development centers. 
§ 27108. Assistance from the National Aeronautics and 
Space Administration 
The National Aeronautics and Space Administration and regional tech-
nology transfer centers supported by the National Aeronautics and Space 
Administration shall cooperate with small business development centers par-
ticipating in the small business development center program. 
§ 27109. National Small Business Development Center Advi-
sory Board 
(a) ESTABLISHMENT.—There is established a National Small Business 
Development Center Advisory Board (referred to in this section as the 
‘‘Board’’). 
(b) MEMBERSHIP.— 
(1) IN GENERAL.—The Board shall consist of 9 members appointed 
from civilian life by the Administrator. 
(2) QUALIFICATIONS.—A member of the Board shall be a person of 
outstanding qualifications known to be familiar and sympathetic with 
small business needs and problems. 
(3) REPRESENTATION.—Not more than 3 members of the Board 
shall be from universities or their affiliates, and 6 members shall be 
from small business concerns or associations representing small busi-
ness concerns. 
(4) TERM.—A member of the Board shall serve a term of 3 years, 
with one-third of the members changing each year. 
(c) CHAIRMAN.—The Board shall elect a chairman. 
(d) DUTIES.—The Board shall advise, counsel, and confer with the Asso-
ciate Administrator in carrying out the duties described in this chapter. 
(e) MEETINGS.—The Board shall meet at least semiannually and at the 
call of the Chairman of the Board. 
(f) COMPENSATION.—A member of the Board shall be entitled to be com-
pensated at the rate not in excess of the per diem equivalent of the max-
imum rate payable under section 5376 of title 5 for each day engaged in 
activities of the Board and shall be entitled to be reimbursed for expenses 
as a member of the Board. 
§ 27110. Small business development center advisory boards 
(a) ESTABLISHMENT.—A small business development center shall estab-
lish an advisory board. 
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(b) CHAIRMAN.—A small business development center advisory board 
shall elect a chairman. 
(c) DUTIES.—A small business development center advisory board shall 
advise, counsel, and confer with the director of the small business develop-
ment center on all policy matters pertaining to the operation of the small 
business development center, including the persons that may be eligible to 
receive assistance from, and how local and regional private consultants may 
participate with, the small business development center. 
§ 27111. Program examination and accreditation 
(a) EXAMINATION.—The Administrator shall conduct a biennial pro-
grammatic and financial examination of each small business development 
center. 
(b) ACCREDITATION.—The Administrator may provide financial support, 
by contract or otherwise, to the Association for the purpose of developing 
a small business development center accreditation program. 
(c) EXTENSION OR RENEWAL OF FINANCIAL AGREEMENTS.— 
(1) IN GENERAL.—In extending or renewing a financial assistance 
agreement of a small business development center, the Administrator 
shall consider the results of the examination and accreditation program 
conducted under subsections (a) and (b). 
(2) ACCREDITATION REQUIREMENT.— 
(A) IN GENERAL.—Except as provided in subparagraph (B), the 
Administrator may not renew or extend a financial assistance 
agreement with a small business development center unless the 
small business development center has been approved under the 
accreditation program conducted under this section. 
(B) WAIVER.—The Associate Administrator may waive the ac-
creditation requirement on a showing that the small business de-
velopment center is making a good faith effort to obtain accredita-
tion. 
§ 27112. Limitations on authority 
(a) APPROPRIATIONS.—The authority to enter into financial assistance 
agreements under this chapter shall be in effect for a fiscal year only to 
the extent and in such amounts as are provided in advance in appropria-
tions Acts. 
(b) SUSPENSION, TERMINATION, OR FAILURE TO RENEW OR EXTEND 
FINANCIAL ASSISTANCE AGREEMENT.—After the Administrator enters into 
a financial assistance agreement with a qualified entity under this chapter, 
the Administrator shall not suspend, terminate, or fail to renew or extend 
the financial assistance agreement unless the Administrator provides the 
qualified entity with written notification stating the reasons for the suspen-
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sion, termination, or failure to renew or extend and affording the qualified 
entity an opportunity for a hearing, appeal, or other administrative pro-
ceeding under chapter 5 of title 5. 
(c) COMPETITION
FOR SUCCESSOR FINANCIAL ASSISTANCE AGREE-
MENTS.—If a financial assistance agreement with a qualified entity under 
this chapter is not renewed or extended, any award of a successor financial 
assistance agreement to another qualified entity under this chapter shall be 
made on a competitive basis. 
(d) NO OTHER FUNDING.—The Administrator shall not fund any small 
business development center or variation of a small business development 
center except as authorized by this chapter. 
§ 27113. Prohibition of fees for counseling service 
A small business development center shall not impose or otherwise collect 
a fee or other compensation in connection with the provision of counseling 
service under this chapter. 
§ 27114. Veterans assistance and services program 
(a) IN GENERAL.—A small business development center may apply for a 
grant under this section to carry out a veterans assistance and services pro-
gram. 
(b) ELEMENTS OF PROGRAM.—Under a program carried out with a grant 
under this subsection, a small business development center shall— 
(1) create a marketing campaign to promote awareness and edu-
cation of the services of the small business development center that are 
available to veterans, and to target the campaign toward veterans, serv-
ice-disabled veterans, military units, Federal agencies, and veterans or-
ganizations; 
(2) use technology-assisted online counseling and distance learning 
technology to overcome the impediments to entrepreneurship faced by 
veterans and members of the Armed Forces; and 
(3) increase coordination among organizations that assist veterans, 
including by establishing virtual integration of service providers and of-
ferings for a one-stop point of contact for veterans who are entre-
preneurs or owners of small business concerns. 
(c) AMOUNT OF GRANTS.—A grant under this section shall be for not less 
than $75,000 and not more than $250,000. 
(d) FUNDING.—Subject to amounts approved in advance in appropria-
tions Acts, the Administration may make grants or enter into cooperative 
agreements to carry out this section. 
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DIVISION J—WOMEN’S BUSINESS CENTER 
PROGRAM 
CHAPTER 273—WOMEN’S BUSINESS CENTER PROGRAM 
Sec. 
27301.
Definitions. 
27302.
Financial assistance. 
27303.
Conditions of participation. 
27304.
Contract authority. 
27305.
5-year period. 
27306.
Criteria. 
27307.
Program examination. 
27308.
Suspension, termination, or failure to renew or extend financial assistance. 
27309.
Continued funding for women’s business centers. 
27310.
Privacy requirements. 
27311.
Expedited acquisition. 
§ 27301. Definitions 
In this chapter: 
(1) ASSISTANT
ADMINISTRATOR.—The term ‘‘Assistant Adminis-
trator’’ means the Assistant Administrator of the Office of Women’s 
Business Ownership. 
(2) PRIVATE NONPROFIT ORGANIZATION.—The term ‘‘private non-
profit organization’’ means an entity that is described in section 501(c) 
of the Internal Revenue Code of 1986 (26 U.S.C. 501(c)) and exempt 
from taxation under section 501(a) of the Code (26 U.S.C. 501(a)). 
(3) WOMEN’S BUSINESS CENTER SITE.—The term ‘‘women’s busi-
ness center site’’ means the location of— 
(A) a women’s business center; or 
(B) one or more women’s business centers, established in con-
junction with another women’s business center in another location 
in a State or region— 
(i) that reach a distinct population that would otherwise 
not be served; 
(ii) the services of which are targeted to women; and 
(iii) the scope, function, and activities of which are similar 
to those of the primary women’s business center or centers 
in conjunction with which it was established. 
§ 27302. Financial assistance 
(a) IN GENERAL.—The Administrator may provide financial assistance to 
a private nonprofit organization to conduct a 5-year project for the benefit 
of small business concerns owned and controlled by women. 
(b) FORMS OF ASSISTANCE.—A project under subsection (a) shall pro-
vide— 
(1) assistance in matters relating to financing, including training 
and counseling in— 
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(A) how to apply for and secure business credit and investment 
capital; 
(B) preparing and presenting financial statements; and 
(C) managing cash flow and other financial operations of a busi-
ness concern; 
(2) management assistance, including training and counseling in how 
to plan, organize, staff, direct, and control each major activity and 
function of a small business concern; and 
(3) marketing assistance, including training and counseling in— 
(A) identifying and segmenting domestic and international mar-
ket opportunities; 
(B) preparing and executing marketing plans; 
(C) developing pricing strategies; 
(D) locating contract opportunities; 
(E) negotiating contracts; and 
(F) using varying public relations and advertising techniques. 
(c) APPROPRIATIONS.—The authority of the Administrator to agree to 
provide financial assistance shall be in effect for each fiscal year only to the 
extent and in the amounts as are provided in advance in appropriations 
Acts. 
§ 27303. Conditions of participation 
(a) NON-FEDERAL CONTRIBUTIONS.—As a condition of receiving finan-
cial assistance under this chapter, a recipient organization shall agree to ob-
tain, after its application has been approved and notice of award has been 
issued, cash contributions from non-Federal sources as follows: 
(1) In the first and second years, one non-Federal dollar for each 
2 Federal dollars. 
(2) In the third, fourth, and fifth years, one non-Federal dollar for 
each Federal dollar. 
(b) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more than one-half 
of the non-Federal sector matching assistance may be in the form of in-kind 
contributions that are budget line items only, including office equipment and 
office space. 
(c) FORM OF FEDERAL CONTRIBUTIONS.— 
(1) IN GENERAL.—Financial assistance under this chapter— 
(A) may be made by grant, contract, or cooperative agreement; 
and 
(B) may be provided— 
(i) in a lump sum or in installments; and 
(ii) in advance or by reimbursement. 
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(2) PARTIAL DISBURSEMENT BEFORE NON-FEDERAL FUNDS ARE OB-
TAINED.—The Administrator may disburse up to 25 percent of each 
year’s Federal share awarded to a recipient organization after notice 
of the award has been issued and before the non-Federal sector match-
ing funds are obtained. 
(3) FAILURE TO OBTAIN NON-FEDERAL FUNDING.—If a recipient of 
assistance fails to obtain the required non-Federal contribution during 
a project— 
(A) the recipient shall not be eligible thereafter for advance dis-
bursements— 
(i) during the remainder of that project; or 
(ii) for any other project for which the recipient is or may 
be funded by the Administrator; and 
(B) before approving assistance to the recipient for any other 
project, the Administrator shall— 
(i) specifically determine whether the Administrator be-
lieves that the recipient will be able to obtain the requisite 
non-Federal funding; and 
(ii) make a written finding stating the reasons for making 
the determination. 
§ 27304. Contract authority 
(a) IN GENERAL.—A women’s business center may enter into a contract 
with a Federal agency to provide specific assistance to women and other un-
derserved small business concerns. 
(b) LIMITATION.—Performance of a contract under subsection (a) should 
not hinder a women’s business center in carrying out the terms of the grant, 
contract, or cooperative agreement received by the women’s business center 
from the Administrator. 
§ 27305. 5-year period 
(a) SUBMISSION OF PLAN.—An organization that applies for financial as-
sistance under this chapter initially shall submit a 5-year plan to the Ad-
ministrator on proposed fundraising and training activities. 
(b) ASSISTANCE PERIOD.—An organization may receive financial assist-
ance under this chapter for any one women’s business center site for a max-
imum of 5 years. 
§ 27306. Criteria 
(a) IN GENERAL.—The Administrator shall evaluate and rank applicants 
in accordance with predetermined selection criteria that shall be stated in 
terms of relative importance. 
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(b) AVAILABILITY.—The criteria and their relative importance shall be 
made publicly available and stated in each solicitation for applications made 
by the Administrator. 
(c) CRITERIA INCLUDED.—The criteria shall include— 
(1) the experience of the applicant in conducting programs or ongo-
ing efforts designed to impart or upgrade the business skills of women 
business owners or potential owners; 
(2) the present ability of the applicant to commence a project within 
a minimum amount of time; 
(3) the ability of the applicant to provide training and services to 
a representative number of women who are both socially and economi-
cally disadvantaged; and 
(4) the location for the women’s business center site proposed by the 
applicant. 
§ 27307. Program examination 
(a) IN GENERAL.—The Administrator shall— 
(1) conduct an annual programmatic and financial examination of 
each women’s business center under which a women’s business center 
shall provide to the Administrator— 
(A) an itemized cost breakdown of actual expenditures for costs 
incurred during the preceding year; and 
(B)(i) documentation regarding the amount of matching assist-
ance from non-Federal sources obtained and expended by the 
women’s business center during the preceding year to meet the re-
quirements of section 27303 of this title; and 
(ii) with respect to any in-kind contributions described in sec-
tion 27303(b) of this title that were used to satisfy the require-
ments of section 27303 of this title, verification of the existence 
and valuation of those contributions; and 
(2) analyze the results of each such examination and, based on that 
analysis, make a determination regarding the programmatic and finan-
cial viability of each women’s business center. 
(b) CONDITIONS FOR CONTINUED FUNDING.—In determining whether to 
award a sustainability grant or renew financial assistance to a women’s 
business center, the Administrator— 
(1) shall consider the results of the most recent examination of the 
women’s business center under subsection (a); and 
(2) may withhold the award or renewal if the Administration deter-
mines that— 
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(A)(i) the women’s business center has failed to provide any in-
formation required to be provided under subparagraph (A) or (B) 
of subsection (a)(1); or 
(ii) the information provided by the women’s business center is 
inadequate; or 
(B)(i) the women’s business center has failed to provide any in-
formation required to be provided by the women’s business center 
for purposes of the report of the Administrator under section 
10711 of this title; or 
(ii) the information provided by the women’s business center is 
inadequate. 
§ 27308. Suspension, termination, or failure to renew or ex-
tend financial assistance 
After the Administrator agrees to provide financial assistance to an appli-
cant under this chapter, the Administrator shall not suspend, terminate, or 
fail to renew or extend the financial assistance unless the Administrator— 
(1) provides the applicant with written notification stating the rea-
sons for suspension, termination, or failure to renew or extend; and 
(2) affords the applicant an opportunity for a hearing, appeal, or 
other administrative proceeding under chapter 5 of title 5. 
§ 27309. Continued funding for women’s business centers 
(a) IN GENERAL.—A nonprofit organization described in subsection (b) 
shall be eligible to receive, subject to subsection (c), a 3-year grant under 
this subsection. 
(b) APPLICABILITY.—A nonprofit organization described in this sub-
section is a nonprofit organization that has received funding under section 
27302 of this title. 
(c) APPLICATION AND APPROVAL CRITERIA.— 
(1) CRITERIA.—Subject to paragraph (2), the Administrator shall 
develop and publish criteria for the consideration and approval of appli-
cations by nonprofit organizations under this section. 
(2) CONTENTS.—Except as otherwise provided in this section, the 
conditions for participation in the grant program under this section 
shall be the same as the conditions for participation in the program 
under section 29(l) of the Small Business Act (15 U.S.C. 656(l)) (as 
in effect on May 25, 2007). 
(3) NOTIFICATION.—Not later than 60 days after the date of the 
deadline to submit applications for each fiscal year, the Administrator 
shall approve or deny any application under this section and notify the 
applicant for each such application. 
(d) AWARD OF GRANTS.— 
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(1) IN GENERAL.—Subject to the availability of appropriations, the 
Administrator shall make a grant for the Federal share of the cost of 
activities described in the application to each applicant approved under 
this section. 
(2) AMOUNT.—A grant under this section shall be for not more than 
$150,000 for each year of the grant. 
(3) FEDERAL SHARE.—The Federal share of the cost of activities 
funded under this section shall be not more than 50 percent. 
(4) PRIORITY.—In allocating funds made available for grants under 
this chapter, the Administrator shall give applications under this sec-
tion priority over first-time applications under 27302 of this title. 
(e) RENEWAL.— 
(1) IN GENERAL.—The Administrator may renew a grant under this 
section for additional 3-year periods, if the nonprofit organization sub-
mits an application for renewal at such time, in such manner, and ac-
companied by such information as the Administrator may establish. 
(2) UNLIMITED RENEWALS.—There shall be no limitation on the 
number of times that a grant may be renewed under paragraph (1). 
§ 27310. Privacy requirements 
(a) IN GENERAL.—A women’s business center may not disclose the name, 
address, or telephone number of any individual or small business concern 
receiving assistance under this chapter without the consent of the individual 
or small business concern, unless— 
(1) the Administrator is ordered to make such a disclosure by a 
court in any civil or criminal enforcement action initiated by a Federal 
agency or State agency; or 
(2) the Administrator considers such a disclosure to be necessary for 
the purpose of conducting a financial audit of a women’s business cen-
ter, but a disclosure under this paragraph shall be limited to the infor-
mation necessary for the audit. 
(b) USE OF INFORMATION BY THE ADMINISTRATOR.—This section does 
not— 
(1) restrict access by the Administrator to program activity data; or 
(2) preclude the Administrator from using client information (other 
than the information described in paragraph (1)) to conduct client sur-
veys. 
(c) REGULATIONS.—The Administrator shall issue regulations to establish 
standards for requiring disclosures during a financial audit under subsection 
(a)(2). 
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§ 27311. Expedited acquisition 
Notwithstanding any other provision of law, the Administrator, acting 
through the Assistant Administrator, may use such expedited acquisition 
methods as the Administrator determines to be appropriate to carry out this 
chapter, except that the Administrator shall ensure that all small business 
sources are provided a reasonable opportunity to submit proposals. 
DIVISION K—VETERANS AND RESERVISTS 
CHAPTER 275—VETERANS AND RESERVISTS 
Sec. 
27501.
Definitions. 
27502.
Veterans business development interagency task force. 
27503.
Advisory Committee on Veterans Business Affairs. 
27504.
Participation in transition assistance program workshops. 
27505.
Women veterans business training 
27506.
Information collection. 
27507.
Entrepreneurial training, counseling, and management assistance. 
27508.
Outreach. 
27509.
Memorandum of understanding with SCORE. 
27510.
Memorandum of understanding with the Secretary of Veterans Affairs and the Asso-
ciation. 
27511.
Dissemination of information. 
27512.
Memorandum of understanding with the Secretary of Labor and the Secretary of Vet-
erans Affairs. 
27513.
Data collection. 
27514.
National Veterans Business Development Corporation. 
27515.
Relief from time limitations. 
§ 27501. Definitions 
In this chapter: 
(1) ASSOCIATE ADMINISTRATOR.—The term ‘‘Associate Adminis-
trator’’ means the Associate Administrator for Veterans Business De-
velopment under section 10304(b) of this title. 
(2) ADVISORY COMMITTEE.—The term ‘‘Advisory Committee’’ means 
the Veterans Business Development Advisory Committee established 
under section 27503. 
(3) CORPORATION.—The term ‘‘Corporation’’ means the National 
Veterans Business Development Corporation established under section 
27514. 
(4) INTERAGENCY TASK
FORCE.—The term ‘‘Interagency Task 
Force’’ means the veterans business development interagency task force 
established under section 27502. 
§ 27502. Veterans business development interagency task 
force 
(a) ESTABLISHMENT.—The President shall establish an interagency task 
force to coordinate the efforts of Federal agencies necessary to improve cap-
ital and business development opportunities for, and ensure achievement of 
the pre-established Federal contracting goals for, small business concerns 
owned and controlled by service-disabled veterans and small business con-
cerns owned and controlled by veterans. 
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(b) MEMBERSHIP.—The members of the Interagency Task Force shall in-
clude— 
(1) the Administrator, who shall serve as chairperson of the Inter-
agency Task Force; 
(2) a senior level representative from— 
(A) the Department of Veterans Affairs; 
(B) the Department of Defense; 
(C) the Administration (in addition to the Administrator); 
(D) the Department of Labor; 
(E) the Department of the Treasury; 
(F) the General Services Administration; 
(G) the Office of Management and Budget; and 
(3) 4 representatives from a veterans service organization or military 
organization or association, selected by the President. 
(c) DUTIES.—The Interagency Task Force shall— 
(1) consult regularly with veterans service organizations and military 
organizations in performing the duties of the Interagency Task Force; 
and 
(2) coordinate administrative and regulatory activities and develop 
proposals relating to— 
(A) improving capital access and capacity of small business con-
cerns owned and controlled by service-disabled veterans and small 
business concerns owned and controlled by veterans through loans, 
surety bonding, and franchising; 
(B) ensuring achievement of the pre-established Federal con-
tracting goals for small business concerns owned and controlled by 
service-disabled veterans and small business concerns owned and 
controlled by veterans through expanded mentor-prote´ge´ assistance 
and matching such small business concerns with contracting op-
portunities; 
(C) increasing the integrity of certifications of status as a small 
business concern owned and controlled by service-disabled veterans 
or a small business concern owned and controlled by veterans; 
(D) reducing paperwork and administrative burdens on veterans 
in accessing business development and entrepreneurship opportuni-
ties; 
(E) increasing and improving training and counseling services 
provided to small business concerns owned and controlled by vet-
erans; and 
(F) making other improvements relating to the support for vet-
erans business development by the Federal Government. 
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§ 27503. Advisory Committee on Veterans Business Affairs 
(a) IN GENERAL.—There is established an advisory committee to be 
known as the Advisory Committee on Veterans Business Affairs, which shall 
serve as an independent source of advice and policy recommendations to— 
(1) the Administrator; 
(2) the Associate Administrator; 
(3) Congress; 
(4) the President; and 
(5) other United States policymakers. 
(b) MEMBERSHIP.— 
(1) IN GENERAL.—The Committee shall be composed of 15 members 
appointed by the Administrator, of whom— 
(A) 8 shall be veterans who are owners of small business con-
cerns; and 
(B) 7 shall be representatives of veterans organizations. 
(2) POLITICAL AFFILIATION.—Not more than 8 members of the 
Committee shall be of the same political party as the President. 
(3) PROHIBITION OF FEDERAL EMPLOYMENT.— 
(A) IN GENERAL.—Except as provided in subparagraph (B), no 
member of the Advisory Committee may serve as an officer or em-
ployee of the United States. 
(B) EXCEPTION.—A member of the Advisory Committee who 
accepts a position as an officer or employee of the United States 
after the date of the member’s appointment to the Advisory Com-
mittee may continue to serve on the Advisory Committee for not 
more than 30 days after accepting the position. 
(4) TERM OF SERVICE.—THE TERM OF SERVICE OF A MEMBER OF 
THE ADVISORY COMMITTEE SHALL BE 3 YEARS. 
(5) VACANCIES.—The Administrator shall fill any vacancies on the 
membership of the Advisory Committee not later than 30 days after 
the date on which the vacancy occurs. 
(6) CHAIRPERSON.— 
(A) IN GENERAL.—The members of the Advisory Committee 
shall elect one of the members to be Chairperson of the Advisory 
Committee. 
(B) VACANCIES IN OFFICE OF CHAIRPERSON.—Any vacancy in 
the office of the Chairperson of the Advisory Committee shall be 
filled by the Advisory Committee at the first meeting of the Advi-
sory Committee following the date on which the vacancy occurs. 
(c) DUTIES.—The duties of the Advisory Committee shall be to— 
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(1) review, coordinate, and monitor plans and programs, developed 
in the public and private sectors, that affect the ability of small busi-
ness concerns owned and controlled by veterans to obtain capital and 
credit and to access markets; 
(2) promote the collection of business information and survey data 
as they relate to veterans and small business concerns owned and con-
trolled by veterans; 
(3) monitor and promote plans, programs, and operations of Federal 
agencies that may contribute to the formation and growth of small 
business concerns owned and controlled by veterans; 
(4) develop and promote initiatives, policies, programs, and plans de-
signed to foster small business concerns owned and controlled by vet-
erans; and 
(5) in cooperation with the Corporation, develop a comprehensive 
plan, to be updated annually, for joint public-private sector efforts to 
facilitate growth and development of small business concerns owned 
and controlled by veterans. 
(d) POWERS.— 
(1) HEARINGS.—Subject to subsection (e), the Advisory Committee 
may hold such hearings, sit and act at such times and places, take such 
testimony, and receive such evidence as the Advisory Committee con-
siders advisable to carry out its duties. 
(2) INFORMATION FROM FEDERAL AGENCIES.—On request of the 
Chairperson of the Advisory Committee, the head of any Federal agen-
cy or the Government Accountability Office shall furnish such informa-
tion to the Advisory Committee as the Advisory Committee considers 
to be necessary to carry out its duties. 
(3) USE OF MAILS.—The Advisory Committee may use the United 
States mails in the same manner and under the same conditions as 
other Federal agencies. 
(4) GIFTS.—The Advisory Committee may accept, use, and dispose 
of gifts or donations of services or property. 
(e) MEETINGS.— 
(1) IN GENERAL.—The Advisory Committee shall meet, not less than 
3 times per year, at the call of the Chairperson or at the request of 
the Administrator. 
(2) LOCATION.—Each meeting of the full Advisory Committee shall 
be held at the headquarters of the Small Business Administration in 
Washington, District of Columbia. The Administrator shall provide 
suitable meeting facilities and such administrative support as is nec-
essary for each full meeting of the Advisory Committee. 
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(3) TASK GROUPS.—The Advisory Committee may from time to time 
establish temporary task groups as may be necessary in order to carry 
out the duties of the Advisory Committee. 
(f) COMPENSATION AND EXPENSES.— 
(1) NO COMPENSATION.—Members of the Advisory Committee shall 
serve without compensation for their service to the Advisory Com-
mittee. 
(2) EXPENSES.—The members of the Advisory Committee shall be 
reimbursed for travel and subsistence expenses in accordance with sec-
tion 5703 of title 5. 
(g) REPORT.—Not later than 30 days after the end of each fiscal year, 
the Committee shall submit to Congress and the President a report describ-
ing the activities of the Advisory Committee and any recommendations de-
veloped by the Advisory Committee for the promotion of small business con-
cerns owned and controlled by veterans. 
§ 27504. Participation in transition assistance program 
workshops 
(a) IN GENERAL.—The Associate Administrator shall increase veteran 
outreach by ensuring that veteran business outreach centers regularly par-
ticipate, on a nationwide basis, in the workshops of the transition assistance 
program of the Department of Labor. 
(b) PRESENTATIONS.—In carrying out subsection (a), a veteran business 
outreach center may provide grants to entities located in transition assist-
ance program locations to make presentations on the opportunities available 
from the Administrator for recently separating or separated veterans. A 
presentation under this subsection shall include, at a minimum, a descrip-
tion of the entrepreneurial and business training resources available from 
the Administrator. 
(c) WRITTEN MATERIALS.—The Associate Administrator shall— 
(1) create written materials that provide comprehensive information 
on self-employment and veterans entrepreneurship, including informa-
tion on resources available from the Administrator on such topics; and 
(2) make the materials created under paragraph (1) available to the 
Secretary of Labor for inclusion in the transition assistance program 
manual. 
(d) REPORTS.—The Associate Administrator shall submit to Congress 
progress reports on the implementation of this section. 
§ 27505. Women veterans business training 
The Associate Administrator shall— 
(1) compile information on existing resources available to women vet-
erans for business training, including resources for— 
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(A) vocational and technical education; 
(B) general business skills, such as marketing and accounting; 
and 
(C) business assistance programs targeted to women veterans; 
and 
(2) disseminate the information compiled under paragraph (1) 
through veteran business outreach centers and women’s business cen-
ters. 
§ 27506. Information collection 
(a) IDENTIFICATION.—The Secretary of Veterans Affairs, in consultation 
with the Assistant Secretary for Veterans’ Employment and Training and 
the Administrator, shall engage in efforts each year to identify small busi-
ness concerns owned and controlled by disabled veterans in the United 
States. 
(b) PROVISION OF INFORMATION.—The Secretary of Veterans Affairs 
shall inform each small business concern identified under this section that 
information on Federal procurement is available from the Administrator. 
§ 27507. Entrepreneurial training, counseling, and manage-
ment assistance 
The Administrator shall take such actions as are necessary to ensure that 
small business concerns owned and controlled by disabled veterans have ac-
cess to programs established under this subtitle that provide entrepreneurial 
training, business development assistance, counseling, and management as-
sistance to small business concerns, including, among others, the small busi-
ness development center program and the SCORE program. 
§ 27508. Outreach 
(a) IN GENERAL.—The Administrator, the Secretary of Veterans Affairs, 
and the Assistant Secretary of Labor for Veterans’ Employment and Train-
ing shall develop and implement a program of comprehensive outreach to 
assist disabled veterans. 
(b) ACTIVITIES.—The program under subsection (a) shall include busi-
ness training and management assistance, employment and relocation coun-
seling, and dissemination of information on veterans’ benefits and veterans’ 
entitlements. 
§ 27509. Memorandum of understanding with the SCORE 
(a) IN GENERAL.—The Administrator shall enter into a memorandum of 
understanding with SCORE to provide for— 
(1) the appointment by SCORE in its national office of an individual 
to act as National Veterans Business Coordinator, whose duties shall 
relate exclusively to veterans business matters, and who shall be re-
sponsible for the establishment and administration of a program to co-
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ordinate counseling and training regarding entrepreneurship to vet-
erans through the chapters of SCORE throughout the United States; 
(2) the provision of assistance by SCORE in maintaining a toll-free 
telephone number and an internet website to provide access for vet-
erans to information about the counseling and training regarding entre-
preneurship available to veterans through SCORE; and 
(3) the collection of statistics concerning services provided by 
SCORE to service-disabled veterans and other veterans for inclusion in 
each annual report published by the Administrator under section 10713 
of this title. 
(b) RESOURCES.—The Administrator shall provide SCORE such re-
sources as the Administrator determines to be necessary for SCORE to 
carry out the requirements of the memorandum of understanding specified 
under subsection (a). 
§ 27510. Memorandum of understanding with the Secretary 
of Veterans Affairs and the Association 
(a) IN GENERAL.—The Secretary of Veterans Affairs, the Administrator, 
and the head of the Association shall enter into a memorandum of under-
standing with respect to entrepreneurial assistance to service-disabled vet-
erans and other veterans through small business development centers and 
facilities of the Department of Veterans Affairs. 
(b) FORMS
OF ASSISTANCE.—Assistance provided under the memo-
randum of understanding shall include— 
(1) conducting of studies and research, and the distribution of infor-
mation generated by such studies and research, on the formation, man-
agement, financing, marketing, and operation of small business con-
cerns by veterans; 
(2) provision of training and counseling to veterans concerning the 
formation, management, financing, marketing, and operation of small 
business concerns; 
(3) provision of management and technical assistance to the owners 
and operators of small business concerns regarding international mar-
kets, the promotion of exports, and the transfer of technology; 
(4) provision of assistance and information to veterans regarding 
procurement opportunities with Federal, State, and local agencies, es-
pecially such agencies funded in whole or in part with Federal funds; 
(5) establishment of an information clearinghouse to collect and dis-
tribute information, including by electronic means, on the assistance 
programs of Federal, State, and local governments, and of the private 
sector, including information on office locations, key personnel, tele-
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phone numbers, mail and electronic addresses, and contracting and 
subcontracting opportunities; 
(6) provision of internet or other distance learning academic instruc-
tion for veterans in business subjects, including accounting, marketing, 
and business fundamentals; and 
(7) compilation of a list of small business concerns owned and con-
trolled by service-disabled veterans that provide products or services 
that could be procured by the United States, and delivery of the list 
to each Federal agency. 
(c) LIST OF SMALL BUSINESS CONCERNS.—The list described in sub-
section (b)(7)— 
(1) shall be delivered in hard copy and electronic form; and 
(2) shall include the name and address of each small business con-
cern owned and controlled by service-disabled veterans and the prod-
ucts or services that it provides. 
§ 27511. Dissemination of information 
Each fiscal year, the Secretary of Veterans Affairs shall— 
(1) in consultation with the Assistant Secretary of Labor for Vet-
erans’ Employment and Training and the Administrator, identify small 
business concerns owned and controlled by veterans in the United 
States; and 
(2) inform each small business concern owned and controlled by vet-
erans identified under paragraph (1) that information on Federal pro-
curement is available from the Administrator, as provided in section 
24115(b) of this title. 
§ 27512. Memorandum of understanding with the Secretary 
of Labor and the Secretary of Veterans Affairs 
(a) IN GENERAL.—The Secretary of Labor, the Secretary of Veterans Af-
fairs, and the Administrator shall enter into a memorandum of under-
standing to provide for coordination of vocational rehabilitation services, 
technical and managerial assistance, and financial assistance to veterans 
(including service-disabled veterans) seeking to employ themselves by form-
ing or expanding small business concerns. 
(b) CONTENTS.—The memorandum of understanding shall include rec-
ommendations for expanding existing programs or establishing new pro-
grams to provide services described in subsection (a) or assistance to vet-
erans (including service-disabled veterans). 
§ 27513. Data collection 
The Federal Procurement Data System described in section 6(d)(4)(A) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4)(A)) 
shall collect data regarding the percentage and dollar value of prime con-
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tracts and subcontracts awarded to small business concerns owned and con-
trolled by veterans (including small business concerns owned and controlled 
by service-disabled veterans). 
§ 27514. National Veterans Business Development Corpora-
tion 
(a) DEFINITIONS.—In this section: 
(1) ADVISORY BOARD.—The term ‘‘Advisory Board’’ means the Pro-
fessional Certification Advisory Board established under subsection (i). 
(2) BOARD OF DIRECTORS.—The term ‘‘Board of Directors’’ means 
the board of directors of the Corporation. 
(3) CORPORATION.—The term ‘‘Corporation’’ means the National 
Veterans Business Development Corporation established by subsection 
(b). 
(b) ESTABLISHMENT.— 
(1) IN GENERAL.—There is established a federally chartered cor-
poration to be known as the National Veterans Business Development 
Corporation, which shall be incorporated under the laws of the District 
of Columbia and which shall have the powers granted in this section. 
(2) STATUS.—Notwithstanding any other provision of law, the Cor-
poration is a private entity and not an agency, instrumentality, author-
ity, entity, or establishment of the United States Government. 
(c) PURPOSES OF THE CORPORATION.—The purposes of the Corporation 
shall be— 
(1) to expand the provision of and improve access to technical assist-
ance regarding entrepreneurship for the Nation’s veterans; and 
(2) to assist veterans with the formation and expansion of small 
business concerns by working with and organizing public and private 
resources, including those of— 
(A) the Administration; 
(B) the Department of Veterans Affairs, Department of Labor, 
Department of Commerce, and Department of Defense; 
(C) SCORE; 
(D) small business development centers; and 
(E) the business development staffs of each Federal agency. 
(d) BOARD OF DIRECTORS.— 
(1) IN GENERAL.—The management of the Corporation shall be 
vested in a Board of Directors composed of 9 voting members and 3 
nonvoting ex officio members. 
(2) APPOINTMENT OF VOTING MEMBERS.—The President shall, after 
considering recommendations proposed by the Chairmen and Ranking 
Members of the Committee on Small Business and Entrepreneurship 
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and Committee on Veterans Affairs of the Senate and the Committee 
on Small Business and Committee on Veterans Affairs of the House 
of Representatives, appoint United States citizens to be voting mem-
bers of the Board of Directors, not more than 5 of whom shall be mem-
bers of the same political party. 
(3) EX OFFICIO MEMBERS.—The Administrator, the Secretary of 
Defense, and the Secretary of Veterans Affairs shall serve as the non-
voting ex officio members of the Board of Directors. 
(4) CHAIRPERSON.—The voting members of the Board of Directors 
shall elect one such member to serve as chairperson of the Board of 
Directors for a term of 2 years. 
(5) TERMS OF VOTING MEMBERS.— 
(A) IN GENERAL.—A voting member of the Board of Directors 
shall serve a term of 6 years. 
(B) UNEXPIRED TERMS.—A member of the Board of Directors 
appointed to fill a vacancy occurring before the expiration of the 
term for which the member’s predecessor was appointed shall be 
appointed only for the remainder of the term. A member may 
serve after the expiration of that member’s term until a successor 
takes office. 
(6) VACANCIES.—A vacancy on the Board of Directors shall be filled 
in the manner in which the original appointment was made. In the case 
of a vacancy in the office of the Administrator or the Secretary of Vet-
erans Affairs, and pending the appointment of a successor, an acting 
appointee for the vacancy may serve as an ex officio member. 
(7) INELIGIBILITY FOR OTHER OFFICES.—No voting member of the 
Board of Directors may be an officer or employee of the United States 
while serving as a member of the Board of Directors or during the 2- 
year period preceding that service. 
(8) FAIRNESS, 
IMPARTIALITY, 
AND
NONDISCRIMINATION.—The 
Board of Directors shall administer the affairs of the Corporation fair-
ly, impartially, and without discrimination. 
(9) OBLIGATIONS AND EXPENSES.—The Board of Directors shall 
prescribe the manner in which the obligations of the Corporation may 
be incurred and in which its expenses shall be allowed and paid. 
(10) QUORUM.—Five voting members of the Board of Directors shall 
constitute a quorum, but a lesser number may hold hearings. 
(e) CORPORATE POWERS.—The Corporation shall have the authority— 
(1) to adopt and use a corporate seal; 
(2) to have succession until dissolved by Act of Congress; 
(3) to make contracts or grants; 
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(4) to sue and be sued and to file and defend against lawsuits in 
Federal or State court; 
(5) to appoint, through the actions of the Board of Directors, offi-
cers and employees of the Corporation, to define their duties and re-
sponsibilities and fix their compensation, and to dismiss at will such 
officers or employees; 
(6) to prescribe, through the actions of the Board of Directors, by-
laws not inconsistent with Federal law and the law of the District of 
Columbia, regulating the manner in which its general business may be 
conducted and the manner in which the privileges granted to it by law 
may be exercised; 
(7) to exercise, through the actions of the Board of Directors or duly 
authorized officers, all powers specifically granted by this section, and 
such incidental powers as are necessary; 
(8) to solicit, receive, and disburse funds from private, Federal, 
State, and local organizations; 
(9) to accept and employ or dispose of in furtherance of the purposes 
of this section any money or property, real, personal, or mixed, tangible 
or intangible, received by gift, devise, bequest, or otherwise; 
(10) to accept voluntary and uncompensated services; and 
(11) to use the United States mails in the same manner and under 
the same conditions as the Federal agencies. 
(f) CORPORATE FUNDS.— 
(1) DEPOSIT OF FUNDS.—The Board of Directors shall deposit all 
funds of the Corporation in federally chartered and insured depository 
institutions until the funds are disbursed under paragraph (2). 
(2) DISBURSEMENT OF FUNDS.—Funds of the Corporation may be 
disbursed only for purposes that— 
(A) are approved by the Board of Directors by a recorded vote 
with a quorum present; and 
(B) are in accordance with the purposes of the Corporation as 
specified in subsection (c). 
(g) NETWORK OF INFORMATION AND ASSISTANCE CENTERS.—In car-
rying out the purposes of the Corporation specified in subsection (c), the 
Corporation shall establish and maintain a network of information and as-
sistance centers for use by veterans and the public. 
(h) PROFESSIONAL CERTIFICATION ADVISORY BOARD.— 
(1) IN GENERAL.—Acting through the Board of Directors, the Cor-
poration shall establish a Professional Certification Advisory Board to 
create uniform guidelines and standards for the professional certifi-
cation of members of the Armed Services to aid in their efficient and 
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orderly transition to civilian occupations and professions and to remove 
potential barriers in the areas of licensure and certification. 
(2) MEMBERSHIP.— 
(A) IN GENERAL.—The members of the Advisory Board— 
(i) shall serve without compensation; 
(ii) shall meet in the District of Columbia not less than 
quarterly; and 
(iii) shall be appointed by the Board of Directors as pro-
vided in subparagraphs (B) and (C). 
(B) PRIVATE SECTOR MEMBERS.—The Board of Directors shall 
appoint not fewer than 7 members for terms of 2 years to rep-
resent private sector organizations and associations, including the 
American Association of Community Colleges, the Society for 
Human Resource Managers, the Coalition for Professional Certifi-
cation, the Council on Licensure and Enforcement, and the Amer-
ican Legion. 
(C) PUBLIC
SECTOR
MEMBERS.—The Board of Directors 
shall— 
(i) invite public sector members to serve at the discretion 
of Federal agencies; 
(ii) encourage the participation of the Under Secretary of 
Defense for Personnel and Readiness; 
(iii) encourage the participation of two officers from each 
branch of the Armed Forces to represent the Training Com-
mands of their branch; and 
(iv) seek the participation and guidance of the Assistant 
Secretary of Labor for Veterans’ Employment and Training. 
(i) ANNUAL REPORTS.—On or before October 1 of each year, the Board 
of Directors shall submit to the President and Congress a report that— 
(1) describes the activities and accomplishments of the Corporation 
for the preceding year; 
(2) includes the Corporation’s findings regarding the efforts of Fed-
eral, State, and private organizations to assist veterans in the forma-
tion and expansion of small business concerns; and 
(3) includes any recommendations by the Corporation for the pro-
motion of small business concerns owned and controlled by veterans. 
§ 27515. Relief from time limitations 
(a) IN GENERAL.—Any time limitation on any qualification, certification, 
or period of participation imposed under this subtitle or subtitle I on any 
program that is available to small business concerns shall be extended for 
a small business concern that— 
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(1) is owned and controlled by— 
(A) a veteran who was called or ordered to active duty on or 
after September 11, 2001, under a provision of law specified in 
section 101(a)(13)(B) of title 10; or 
(B) a service-disabled veteran who became such a veteran due 
to an injury or illness incurred or aggravated in the active mili-
tary, naval, or air service during a period of active duty pursuant 
to a call or order to active duty on or after September 11, 2001, 
under a provision of law specified in section 101(a)(13)(B) of title 
10; and 
(2) was subject to the time limitation during that period of active 
duty. 
(b) DURATION.—On submission of proper documentation to the Adminis-
trator, the extension of a time limitation under subsection (a) shall be equal 
to the period of time that the veteran who owned or controlled a small busi-
ness concern was on active duty as described in subsection (a). 
(c) EXCEPTION FOR PROGRAMS SUBJECT TO FEDERAL CREDIT REFORM 
ACT OF 1990.—Subsections (a) and (b) do not apply to any program subject 
to the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). 
DIVISION X—MISCELLANEOUS 
CHAPTER 291—MISCELLANEOUS 
Sec. 
51101.
Management assistance for small business concerns affected by military operations. 
51102.
Business grants and cooperative agreements. 
51103.
Voluntary agreements and programs. 
51104.
Paul D. Coverdell drug-free workplace program. 
§ 29101. Management assistance for small business concerns 
affected by military operations 
(a) DEFINITION OF PERIOD OF MILITARY CONFLICT.—In this section, 
the term ‘‘period of military conflict’’ means— 
(1) a period of war declared by Congress; 
(2) a period of national emergency declared by Congress or by the 
President; or 
(3) a period of a contingency operation (as defined in section 101(a) 
of title 10). 
(b) ASSISTANCE.—The Administrator shall use, as appropriate, the entre-
preneurial development and management assistance programs of the Admin-
istration, including programs involving State or private sector partners, to 
provide business counseling and training to any small business concern ad-
versely affected by the deployment of units of the Armed Forces of the 
United States in support of a period of military conflict. 
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§ 29102. Business grants and cooperative agreements 
(a) IN GENERAL.—The Administrator may make grants to and enter into 
cooperative agreements with a coalition of private or public entities (or com-
bination of private and public entities)— 
(1) to expand business-to-business relationships between small busi-
ness concerns and large business concerns; and 
(2) to provide businesses, directly or indirectly, with online informa-
tion and a database of companies that are interested in mentor-prote´ge´ 
programs or community-based, statewide, or local business development 
programs. 
(b) MATCHING REQUIREMENT.—The Administrator may make a grant to 
a coalition of private entities under subsection (a) only if the coalition pro-
vides for activities described in paragraph (1) or (2) of subsection (a) in 
an amount (in kind or in cash) equal to the grant amount. 
§ 29103. Voluntary agreements and programs 
(a) CONSULTATION.—The President may consult with representatives of 
small business concerns with a view to encouraging the making by small 
business concerns with the approval of the President of voluntary agree-
ments and programs to further the objectives of this subtitle. 
(b) EXEMPTION FROM CERTAIN LAWS.— 
(1) IN GENERAL.—No act or omission to act pursuant to this sub-
title that occurs while this subtitle is in effect, if requested by the 
President pursuant to a voluntary agreement or program approved 
under subsection (a) and determined by the President to be in the pub-
lic interest as contributing to the national defense, shall be construed 
to be within the prohibitions of the antitrust laws or the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.). 
(2) REQUESTS.—A copy of a request intended to be within the cov-
erage of this section, and any modification or withdrawal of such a re-
quest— 
(A) shall be furnished to the Attorney General and the Chair-
man of the Federal Trade Commission when made; and 
(B) shall be published in the Federal Register unless publication 
of the request would, in the opinion of the President, endanger the 
national security. 
(c) DELEGATION OF AUTHORITY.—The authority granted in subsection 
(b) shall be delegated only— 
(1) to an official who for the purpose of the delegation shall be re-
quired to be appointed by the President by and with the advice and 
consent of the Senate; 
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(2) on the condition that the official consult with the Attorney Gen-
eral and the Chairman of the Federal Trade Commission not less than 
10 days before making any request or finding under subsection (b); 
and 
(3) on the condition that the official obtain the approval of the At-
torney General to any request under subsection (b) before making the 
request. 
(d) WITHDRAWAL OF REQUEST OR FINDING BY THE PRESIDENT OR OF 
APPROVAL BY THE ATTORNEY GENERAL.—On withdrawal of any request 
or finding under this section, or on withdrawal by the Attorney General of 
approval of the voluntary agreement or program on which the request or 
finding is based, this section shall not apply to any subsequent act, or omis-
sion to act, by reason of the finding or request. 
§ 29104. Paul D. Coverdell drug-free workplace program 
(a) DEFINITIONS.—In this section: 
(1) DRUG-FREE WORKPLACE PROGRAM.—The term ‘‘drug-free work-
place program’’ means a program that includes— 
(A) a written policy, including a clear statement of— 
(i) expectations for workplace behavior; 
(ii) prohibitions against reporting to work or working under 
the influence of illegal drugs or alcohol; 
(iii) prohibitions against the use or possession of illegal 
drugs in the workplace; and 
(iv) the consequences of violating those expectations and 
prohibitions; 
(B)(i) drug and alcohol abuse prevention training for a total of 
not less than 2 hours for each employee; and 
(ii) additional voluntary drug and alcohol abuse prevention 
training for employees who are parents; 
(C)(i) testing of employees of a small business concern for ille-
gal drugs, with analysis conducted by a drug testing laboratory 
certified by the Substance Abuse and Mental Health Services Ad-
ministration, or approved by the College of American Pathologists 
for forensic drug testing; and 
(ii) a review of each positive test result by a medical review offi-
cer who is not— 
(I) an employee of that small business concern; or 
(II) an employee or agent of, or any person having a finan-
cial interest in, the laboratory for which the illegal drug test 
results are reviewed; 
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(D) employee access to an employee assistance program, includ-
ing confidential assessment, referral, and short-term problem reso-
lution; and 
(E) continuing alcohol and drug abuse prevention education. 
(2) ELIGIBLE
INTERMEDIARY.—The term ‘‘eligible intermediary’’ 
means an organization— 
(A) that has not less than 2 years of experience in carrying out 
drug-free workplace programs; 
(B) that has a drug-free workplace policy in effect; 
(C) that is located in a State, the District of Columbia, or a 
territory of the United States; and 
(D)(i) the purpose of which is— 
(I) to develop comprehensive drug-free workplace programs 
or to supply drug-free workplace services; or 
(II) to provide other forms of assistance and services to 
small business concerns; or 
(ii) that is eligible to receive a grant under chapter 2 of the Na-
tional Narcotics Leadership Act of 1988 (21 U.S.C. 1521 et seq.). 
(3) EMPLOYEE.—The term ‘‘employee’’ includes— 
(A) an applicant for employment; 
(B) an employee; 
(C) a supervisor; 
(D) a manager; 
(E) an officer of a small business concern who is active in man-
agement of the small business concern; and 
(F) an owner of a small business concern who is active in man-
agement of the small business concern. 
(4) MEDICAL REVIEW OFFICER.—The term ‘‘medical review officer’’ 
means a licensed physician with knowledge of substance abuse dis-
orders. 
(b) ESTABLISHMENT.— 
(1) IN GENERAL.—There is established a drug-free workplace dem-
onstration program, under which the Administrator may make grants 
to, or enter into cooperative agreements or contracts with, eligible 
intermediaries for the purpose of providing financial and technical as-
sistance to small business concerns seeking to establish a drug-free 
workplace program. 
(2) ADDITIONAL GRANTS FOR TECHNICAL ASSISTANCE.—In addition 
to grants under paragraph (1), the Administrator may make grants to, 
or enter into cooperative agreements or contracts with, any grantee for 
the purpose of providing, in cooperation with one or more small busi-
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ness development centers, technical assistance to small business con-
cerns seeking to establish a drug-free workplace program. 
(3) 2-YEAR GRANTS.—A grant made under this subsection shall be 
for a period of 2 years, subject to an annual performance review by 
the Administrator. 
(c) PROMOTION
OF
EFFECTIVE
PRACTICES
OF
ELIGIBLE
INTER-
MEDIARIES.— 
(1) TECHNICAL
ASSISTANCE
AND
INFORMATION.—The Adminis-
trator, after consultation with the Director of the Center for Substance 
Abuse and Prevention, shall provide technical assistance and informa-
tion to each eligible intermediary under subsection (b) regarding the 
most effective practices in establishing and carrying out drug-free 
workplace programs. 
(2) EVALUATION OF PROGRAM.— 
(A) DATA COLLECTION AND ANALYSIS.— 
(i) IN
GENERAL.—An eligible intermediary receiving a 
grant under this section shall establish a system to collect 
and analyze information regarding the effectiveness of drug- 
free workplace programs established with assistance provided 
under this section through the intermediary, including infor-
mation regarding any increase or decrease among employees 
in drug use, awareness of the adverse consequences of drug 
use, and absenteeism, injury, and disciplinary problems re-
lated to drug use. 
(ii) REQUIREMENTS.—The system shall conform to such 
requirements as the Administrator, after consultation with 
the Director of the Center for Substance Abuse and Preven-
tion, may prescribe. 
(iii) LIMITATION.—Not more than 5 percent of the amount 
of a grant made under subsection (b) shall be used by the eli-
gible intermediary to carry out this paragraph. 
(B) METHOD OF EVALUATION.— 
(i) IN
GENERAL.—The Administrator, after consultation 
with the Director of the Center for Substance Abuse and Pre-
vention, shall provide technical assistance and guidance to 
each eligible intermediary receiving a grant under subsection 
(b) regarding the collection and analysis of information to 
evaluate the effectiveness of drug-free workplace programs es-
tablished with assistance provided under this section, includ-
ing the information referred to in paragraph (1). 
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(ii) FORMS OF ASSISTANCE.—Assistance under clause (i) 
shall include— 
(I) the identification of additional information suitable 
for measuring the benefits of drug-free workplace pro-
grams to the small business concern and to the small 
business concern’s employees; and 
(II) the identification of methods suitable for ana-
lyzing such information. 
(d) CONTRACT AUTHORITY.—In carrying out this section, the Adminis-
trator may— 
(1) contract with public and private entities to provide assistance re-
lated to carrying out the program under this section; and 
(2) compensate those entities for provision of that assistance. 
(e) EFFECT OF SECTION.—Nothing in this section requires an employer 
that attends a program offered by an eligible intermediary to contract for 
any service offered by the eligible intermediary. 
Subtitle III—Investment Division 
DIVISION A—GENERAL PROVISIONS 
CHAPTER 301—GENERAL PROVISIONS 
Sec. 
30101.
Definitions. 
30102.
Implementation of subtitle. 
§ 30101. Definitions 
In this subtitle: 
(1) ARTICLES.—The term ‘‘articles’’— 
(A) with respect to an incorporated body, means the articles of 
incorporation if the incorporated body; and 
(B) with respect to any other business entity, means the func-
tional equivalent of the articles of incorporation of an incorporated 
body or other similar documents specified by the Administrator. 
(2) EMPLOYEE WELFARE BENEFIT PLAN.— 
(A) IN GENERAL.—The term ‘‘employee welfare benefit plan’’ 
has the meaning given the term in section 3 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1002). 
(B) INCLUSIONS.—The term ‘‘employee welfare benefit plan’’ 
includes any similar plan not covered by the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1001 et seq.) that has 
been established and that is maintained by the Federal Govern-
ment or any State or political subdivision, or any agency or instru-
mentality thereof, for the benefit of employees. 
(3) ENERGY SAVING DEBENTURE.—The term ‘‘energy saving deben-
ture’’ means a deferred interest debenture that— 
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(A) is issued at a discount; 
(B) has a 5-year maturity or a 10-year maturity; 
(C) requires no interest payment or annual charge for the first 
5 years; 
(D) is restricted to energy saving qualified investments; and 
(E) is issued at no cost (as defined in section 502 of the Credit 
Reform Act of 1990 (2 U.S.C. 661a)) with respect to purchasing 
and guaranteeing the debenture. 
(4) ENERGY SAVING QUALIFIED INVESTMENT.—The term ‘‘energy 
saving qualified investment’’ means an investment in a small business 
concern that is primarily engaged in researching, manufacturing, devel-
oping, or providing products, goods, or services that reduce the use or 
consumption of nonrenewable energy resources. 
(5) LEVERAGE.—The term ‘‘leverage’’ includes— 
(A) a debenture purchased or guaranteed by the Administrator; 
(B) a participating security purchased or guaranteed by the Ad-
ministrator; and 
(C) a preferred security outstanding as of October 1, 1995. 
(6) LICENSE.—The term ‘‘license’’ means a license to operate as a 
small business investment company issued by the Administrator to a 
company under section 30302 of this title. 
(7) LICENSEE.— 
(A) IN GENERAL.—The term ‘‘licensee’’ means a company that 
is issued a license. 
(B) INCLUSION.—The term ‘‘licensee’’ includes a specialized 
small business investment company. 
(8) LIMITED LIABILITY COMPANY.—The term ‘‘limited liability com-
pany’’ means a business entity that is organized and operating in ac-
cordance with a State limited liability company statute approved by the 
Administrator. 
(9) LONG-TERM.—The term ‘‘long-term’’, used in connection with 
equity capital or loan funds invested in a small business concern or 
smaller enterprise, means a period of time of not less than one year. 
(10) LOW-INCOME GEOGRAPHIC AREA.—The term ‘‘low-income geo-
graphic area’’ means— 
(A) a population census tract (or in the case of an area that 
is not tracted for population census tracts, the equivalent county 
division, as defined by the Bureau of the Census of the Depart-
ment of Commerce for purposes of defining poverty areas), if— 
(i) the poverty rate for the population census tract is not 
less than 20 percent; 
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(ii)(I) in the case of a population census tract that is lo-
cated within a metropolitan area, 50 percent or more of the 
households in the population census tract have an income 
equal to less than 60 percent of the area median gross in-
come; or 
(II) in the case of a population census tract that is not lo-
cated within a metropolitan area, the median household in-
come for the census tract does not exceed 80 percent of the 
statewide median household income; or 
(iii) as determined by the Administrator based on objective 
criteria, a substantial population of low-income individuals re-
side, an inadequate access to investment capital exists, or 
other indications of economic distress exist in the population 
census tract; or 
(B) an area located within— 
(i) a HUBZone; 
(ii) an urban empowerment zone or urban enterprise com-
munity (as designated by the Secretary of Housing and 
Urban Development); or 
(iii) a rural empowerment zone or rural enterprise commu-
nity (as designated by the Secretary of Agriculture). 
(11) MANAGEMENT
OFFICIAL.—The term ‘‘management official’’ 
means an officer, director, general partner, manager, employee, agent, 
or other participant in the management or conduct of the affairs of a 
licensee. 
(12) MEMBER.—The term ‘‘member’’, with respect to a licensee that 
is a limited liability company, means— 
(A) a holder of an ownership interest in the limited liability 
company; or 
(B) a person otherwise admitted to membership in the limited 
liability company. 
(13) PARTICIPATING SECURITY.—The term ‘‘participating security’’ 
includes— 
(A) preferred stock, a preferred limited partnership interest, or 
a similar instrument; and 
(B) a debenture under the terms of which interest is payable 
only to the extent of earnings. 
(14) PENSION PLAN.— 
(A) IN GENERAL.—The term ‘‘pension plan’’ has the meaning 
given the term in section 3 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002). 
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(B) INCLUSIONS.—The term ‘‘pension plan’’ includes— 
(i) a public or private pension or retirement plan subject 
to the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1001 et seq.); and 
(ii) any similar plan not covered by that Act that is estab-
lished and maintained by the Federal Government or any 
State or political subdivision, or any agency or instrumen-
tality thereof, for the benefit of employees. 
(15) PRIVATE CAPITAL.— 
(A) IN GENERAL.—The term ‘‘private capital’’ means the sum 
of— 
(i)(I) the paid-in capital and paid-in surplus of a corporate 
licensee; 
(II) the contributed capital of the partners of a partnership 
licensee; or 
(III) the equity investment of the members of a limited li-
ability company licensee; and 
(ii) subject to subparagraph (B), unfunded binding com-
mitments, from investors that meet criteria established by the 
Administrator, to contribute capital to the licensee. 
(B) LIMITATION.—An unfunded commitment described in sub-
paragraph (A)(ii) may be counted as private capital for purposes 
of approval by the Administrator of a request for leverage, but le-
verage shall not be funded based on such a commitment. 
(C) EXCLUSIONS.—The term ‘‘private capital’’ does not in-
clude— 
(i) funds borrowed by a licensee from any source; 
(ii) funds obtained through the issuance of leverage; or 
(iii) funds obtained directly or indirectly from a Federal, 
State, or local government, or any government agency or in-
strumentality, except for— 
(I) funds obtained from the business revenues (exclud-
ing any governmental appropriation) of a federally char-
tered or government-sponsored corporation established 
before October 1, 1987; 
(II) funds invested by an employee welfare benefit 
plan or pension plan; and 
(III) qualified nonprivate funds (if the investors of the 
qualified nonprivate funds do not control, directly or in-
directly, the management, board of directors, general 
partners, or members of the licensee). 
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(16) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—The term 
‘‘qualified HUBZone small business concern’’ has the meaning given 
the term in section 10101 of this title, except that the exception stated 
in paragraph (18)(B) of this section applies. 
(17) QUALIFIED NONPRIVATE FUNDS.—The term ‘‘qualified nonpri-
vate funds’’ means— 
(A) funds directly or indirectly invested in an applicant or li-
censee on or before August 16, 1982, by any Federal agency, 
other than the Administration, under a provision of law that ex-
plicitly requires the inclusion of such funds in the definition of the 
term ‘‘private capital’’; 
(B) funds directly or indirectly invested in an applicant or li-
censee by a Federal agency under a provision of law enacted after 
September 4, 1992, that explicitly requires the inclusion of those 
funds in the definition of the term ‘‘private capital’’; and 
(C) funds invested in an applicant or licensee by one or more 
State or local government entities (including any guarantee ex-
tended by such an entity) in an aggregate amount that does not 
exceed 33 percent of the private capital of the applicant or li-
censee. 
(18) SMALL BUSINESS CONCERN.— 
(A) IN GENERAL.—The term ‘‘small business concern’’ has the 
meaning given the term in section 10101 of this title, except as 
provided in subparagraph (B). 
(B) EXCEPTION.—For purposes of this subtitle, in determining 
whether a business concern is a small business concern— 
(i) an investment by a venture capital firm, investment 
company (including a small business investment company), 
employee welfare benefit plan, pension plan, trust, foundation, 
or endowment that is exempt from Federal income taxation— 
(I) shall not cause a business concern to be considered 
not independently owned and operated regardless of the 
allocation of control during the investment period under 
any investment agreement between the business concern 
and the entity making the investment; 
(II) shall be disregarded in determining whether a 
business concern satisfies size standards established 
under section 10101(70) of this title; and 
(III) shall be disregarded in determining whether a 
small business concern is a smaller enterprise; and 
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(ii) in determining whether a business concern satisfies net 
income standards established under section 10101(70) of this 
title, if the business concern is not required by law to pay 
Federal income taxes at the enterprise level, but is required 
to pass income through to the shareholders, partners, bene-
ficiaries, or other equitable owners of the business concern, 
the net income of the business concern shall be determined 
by allowing a deduction in an amount equal to the sum of— 
(I) if the business concern is not required by law to 
pay State (and local, if any) income taxes at the enter-
prise level, the net income (determined without regard to 
this subparagraph), multiplied by the marginal State in-
come tax rate (or by the combined State and local in-
come tax rates, as applicable) that would apply if the 
business concern were a corporation; and 
(II) the net income (so determined) less any deduction 
for State (and local) income taxes calculated under sub-
clause (I), multiplied by the marginal Federal income tax 
rate that would apply if the business concern were a cor-
poration. 
(19) SMALL
BUSINESS
CONCERN
OWNED
AND
CONTROLLED
BY 
SERVICE-DISABLED
VETERANS.—The term ‘‘small business concern 
owned and controlled by service-disabled veterans’’ has the meaning 
given the term in section 10101 of this title, except that the exception 
stated in paragraph (18)(B) of this section applies. 
(20) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SO-
CIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.—The term 
‘‘small business concern owned and controlled by socially and economi-
cally disadvantaged individuals’’ has the meaning given the term in sec-
tion 10101 of this title, except that the exception stated in paragraph 
(18)(B) of this section applies. 
(21) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY VET-
ERANS.—The term ‘‘small business concern owned and controlled by 
veterans’’ has the meaning given the term in section 10101 of this title, 
except that the exception stated in paragraph (18)(B) of this section 
applies. 
(22) SMALL BUSINESS INVESTMENT COMPANY.—The term ‘‘small 
business investment company’’ means a licensee. 
(23) SMALLER ENTERPRISE.— 
(A) IN
GENERAL.—The term ‘‘smaller enterprise’’ means a 
small business concern that, together with its affiliates— 
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(i) has— 
(I) a net financial worth of not more than $6,000,000, 
as of the date on which assistance is provided under this 
subtitle to that small business concern; and 
(II) an average net income, for the 2-year period pre-
ceding the date on which assistance is provided under 
this subtitle to that small business concern, of not more 
than $2,000,000, after Federal income taxes (excluding 
any carryover losses); or 
(ii) satisfies the North American Industry Classification 
System size standards established by the Administrator for 
the industry in which the small business concern is primarily 
engaged. 
(B) DETERMINATION OF NET INCOME.—For purposes of sub-
paragraph (A)(i)(II), if a small business concern is not required 
by law to pay Federal income tax at the enterprise level, but is 
required to pass income through to the shareholders, partners, 
beneficiaries, or other equitable owners of the small business con-
cern, the net income of the small business concern shall be deter-
mined by deducting from the gross income of the small business 
concern— 
(i) in the case of a small business concern that is required 
by law to pay State (and local, if any) income taxes at the 
enterprise level, the amount that is equal to the net income 
of the small business concern determined without regard to 
this clause, multiplied by the marginal Federal income tax 
rate that would apply if the small business concern were a 
corporation; or 
(ii) in the case of a small business concern that is not re-
quired by law to pay State (and local, if any) income taxes 
at the enterprise level, the amount that is equal to the sum 
of— 
(I) the net income of the small business concern deter-
mined without regard to this clause, multiplied by the 
marginal State income tax rate (or by the combined 
State and local income tax rates, as applicable) that 
would apply if the small business concern were a cor-
poration; and 
(II) the net income of the small business concern de-
termined without regard to this clause, less any deduc-
tion for State (and local) income taxes calculated under 
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subclause (I), multiplied by the marginal Federal income 
tax rate that would apply if the business concern were 
a corporation. 
(24) SPECIALIZED SMALL BUSINESS INVESTMENT COMPANY.—The 
term ‘‘specialized small business investment company’’ means a com-
pany that— 
(A) invests solely in small business concerns that contribute to 
a well-balanced national economy by facilitating ownership in 
small business concerns by persons whose participation in the free 
enterprise system is hampered because of social or economic dis-
advantages; 
(B) is organized or chartered under a State business or non-
profit corporations statute or formed as a limited partnership; and 
(C) was licensed under subsection (d) of section 301 of the 
Small Business Act (15 U.S.C. 681(d)), as in effect before Sep-
tember 30, 1996. 
(25) STATE.—The term ‘‘State’’ includes a State, the territories and 
possessions of the United States, Puerto Rico, and the District of Co-
lumbia. 
(26) THIRD PARTY DEBT.—The term ‘‘third party debt’’ means any 
indebtedness for borrowed money, other than indebtedness owed to the 
Administrator. 
§ 30102. Implementation of subtitle 
The Administrator— 
(1) shall carry out this subtitle so as to improve and stimulate the 
national economy in general and the small business segment of the 
economy in particular by establishing a program to stimulate and sup-
plement the flow of private equity capital and long-term loan funds 
that— 
(A) small business concerns need for the sound financing of 
their business operations and for their growth, expansion, and 
modernization; and 
(B) are not available in adequate supply; and 
(2) in doing so— 
(A) shall ensure the maximum participation of private financing 
sources; 
(B) shall ensure that any financial assistance provided under 
this subtitle does not result in a substantial increase of unemploy-
ment in any area of the country; and 
(C) in the award of financial assistance under this subtitle, 
when practicable, shall accord priority to small business concerns 
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314 
that lease or purchase equipment and supplies produced in the 
United States and encourage small business concerns that receive 
assistance under this subtitle to continue to lease or purchase 
equipment and supplies produced in the United States. 
DIVISION B—INVESTMENT PROGRAMS 
CHAPTER 303—SMALL BUSINESS INVESTMENT 
COMPANY PROGRAM 
Sec. 
30301.
Requirements for licensing. 
30302.
Licensing procedure. 
30303.
Financial institution investments. 
30304.
Borrowing power. 
30305.
Equity capital for small business concerns. 
30306.
Long-term loans to small business concerns. 
30307.
Limitation on amount of financing. 
30308.
Cooperation with banks and other investors or lenders. 
30309.
Advisory services; Federal Reserve Banks as depositories or fiscal agents; investment 
of funds. 
30310.
Nonliability of the United States. 
30311.
Certifications of eligibility. 
30312.
Interest rates. 
30313.
Conflicts of interest. 
30314.
Ineligibility of guaranteed obligations for purchase by Federal Financing Bank. 
30315.
Trust certificates. 
30316.
Regulations. 
30317.
Unlawful acts and omissions. 
30318.
Investigations; examinations; valuations. 
30319.
Revocation and suspension of licenses; cease and desist orders. 
30320.
Removal or suspension of, or prohibition of participation by, management officials. 
30321.
Direct civil enforcement actions. 
30322.
Jurisdiction; service of process. 
§ 30301. Requirements for licensing 
(a) IN GENERAL.—To receive or hold a license to operate as a small busi-
ness investment company under this chapter, a company shall meet the re-
quirements of this section. 
(b) ORGANIZATION.—The company shall be an incorporated body, limited 
liability company, or limited partnership organized and chartered or other-
wise existing under State law solely for the purpose of performing the func-
tions and conducting the activities contemplated under this chapter. 
(c) SUCCESSION.—The company— 
(1) if it is an incorporated body, shall have succession for a period 
of not less than 30 years unless it is sooner dissolved by its share-
holders; and 
(2) if it is a limited partnership, shall have succession for a period 
of not less than 10 years. 
(d) POWERS.—The company shall possess the powers reasonably nec-
essary to perform the functions and conducting the activities contemplated 
under this chapter. 
(e) AREA OF OPERATION.—The area in which the company is to conduct 
its operations, and the establishment of branch offices or agencies (if au-
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315 
thorized by the articles), shall be subject to the approval of the Adminis-
trator. 
(f) ARTICLES.— 
(1) IN GENERAL.—The articles of the company shall specify in gen-
eral terms— 
(A) the purposes for which the company is formed; 
(B) the name of the company; 
(C) the area or areas in which its operations are to be carried 
on; 
(D) the place where its principal office is to be located; and 
(E) the amount and classes of its shares of capital stock. 
(2) OTHER PROVISIONS.—The articles of the company may contain 
any other provisions not inconsistent with this chapter that the com-
pany may see fit to adopt for the regulation of its business and the 
conduct of its affairs. 
(3) APPROVAL.—The articles of the company and any amendments 
to the articles adopted from time to time shall be subject to the ap-
proval of the Administrator. 
(g) CAPITAL REQUIREMENTS.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the private 
capital of the company shall be not less than— 
(A) $5,000,000; or 
(B) $10,000,000, with respect to a company that seeks author-
ity to issue participating securities to be purchased or guaranteed 
by the Administrator under this chapter. 
(2) EXCEPTIONS.— 
(A) NO UNREASONABLE RISK OF DEFAULT OR LOSS.— 
(i) IN GENERAL.—The Administrator may, on a showing of 
special circumstances and good cause, permit the private cap-
ital of a company described in paragraph (1)(B) to be less 
than $10,000,000, but not less than $5,000,000, if the Ad-
ministrator determines that doing so would not create or oth-
erwise contribute to an unreasonable risk of default or loss 
to the Federal Government. 
(ii) COMPANIES LICENSED BEFORE SEPTEMBER 30, 1996.— 
The Administrator may continue the licensing of a licensee li-
censed under subsection (c) or (d) of section 301 of the Small 
Business Act (15 U.S.C. 681(c), (d)) before September 30, 
1996, that does not meet the requirements of paragraph (1) 
if— 
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(I) the licensee certifies in writing that not less than 
50 percent of the aggregate dollar amount of its 
financings will be provided to smaller enterprises; and 
(II) the Administrator determines that doing so would 
not create or otherwise contribute to an unreasonable 
risk of default or loss to the Federal Government. 
(B) VIABLE BUSINESS PLAN AND REASONABLE TIMETABLE.— 
(i) IN GENERAL.—Notwithstanding any other provision of 
this chapter, the Administrator may, on a showing of special 
circumstances and good cause, issue a license with respect to 
a company that would otherwise be issued a license, except 
that the company does not satisfy the requirements of para-
graph (1), if the company— 
(I) has private capital of not less than $3,000,000; 
and 
(II) has a viable business plan reasonably projecting 
profitable operations and a reasonable timetable for 
achieving a level of private capital that satisfies the re-
quirements of paragraph (1). 
(ii) LEVERAGE.—A company that is licensed pursuant to 
the exception provided in clause (i) shall not be eligible to re-
ceive leverage as a licensee until the company satisfies the re-
quirements of paragraph (1). 
(3) ADEQUACY.—In addition to the requirements of paragraph (1), 
the Administrator shall— 
(A) determine whether the private capital of the company is 
adequate to ensure a reasonable prospect that the company will be 
operated soundly and profitably and managed actively and pru-
dently in accordance with its articles; 
(B) determine that the company, both prior to licensing and 
prior to approving any request for financing, will be able to make 
periodic payments on any debt of the company that is interest- 
bearing; and 
(C) take into consideration— 
(i) the income that the company anticipates on its con-
templated investments; 
(ii) the experience of the company’s owners and managers; 
(iii) the history of the company as an entity, if any; and 
(iv) the company’s financial resources. 
(h) DIVERSIFICATION OF OWNERSHIP.—The Administrator shall ensure 
that the management of a licensee licensed after September 30, 1996, is 
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sufficiently diversified from and unaffiliated with the ownership of the li-
censee in a manner that ensures independence and objectivity in the finan-
cial management and oversight of the investments and operations of the li-
censee. 
§ 30302. Licensing procedure 
(a) SUBMISSION OF APPLICATION.—An applicant for a license to operate 
as a small business investment company under this chapter shall submit to 
the Administrator an application, in such form and including such docu-
mentation as the Administrator may prescribe. 
(b) STATUS.—Not later than 90 days after receipt by the Administrator 
of an application under this section, the Administrator shall provide the ap-
plicant with a written report detailing the status of the application and any 
requirements remaining for completion of the application. 
(c) APPROVAL OR DISAPPROVAL.—Within a reasonable time after receiv-
ing a completed application submitted in accordance with this section (in-
cluding such requirements as the Administrator may prescribe by regula-
tion), the Administrator shall— 
(1) approve the application and issue a license to the applicant if the 
requirements of this section are satisfied; or 
(2) disapprove the application and notify the applicant in writing of 
the disapproval. 
(d) MATTERS TO BE CONSIDERED.—In reviewing and processing an ap-
plication under this section, the Administrator— 
(1) shall determine whether— 
(A) the applicant meets the requirements of subsections (g) and 
(h) of section 30301 of this title; and 
(B) the management of the applicant is qualified and has the 
knowledge, experience, and capability necessary to comply with 
this chapter; 
(2) shall take into consideration— 
(A) the need for and availability of financing for small business 
concerns in the geographic area in which the applicant is to com-
mence business; 
(B) the general business reputation of the owners and manage-
ment of the applicant; and 
(C) the probability of successful operations of the applicant, in-
cluding adequate profitability and financial soundness; and 
(3) shall not take into consideration any projected shortage or un-
availability of leverage. 
(e) FEES.— 
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(1) IN GENERAL.—The Administrator may prescribe fees to be paid 
by an applicant for a license. 
(2) USE OF AMOUNTS.—Fees collected under this subsection— 
(A) shall be deposited in the account for salaries and expenses 
of the Administration; and 
(B) are authorized to be appropriated solely to cover the costs 
of licensing examinations. 
§ 30303. Financial institution investments 
(a) CERTAIN BANKS.—Notwithstanding section 23A of the Federal Re-
serve Act (12 U.S.C. 371c), a national bank, or a member bank of the Fed-
eral Reserve System or nonmember insured bank to the extent permitted 
under applicable State law, may invest in one or more licensees, or in an 
entity established to invest solely in licensees, except that in no event shall 
the total amount of such investments of any such bank exceed 5 percent 
of the capital and surplus of the bank. 
(b) FEDERAL SAVINGS ASSOCIATIONS.—Notwithstanding any other provi-
sion of law, a Federal savings association may invest in one or more licens-
ees, or in an entity established to invest solely in licensees, except that in 
no event shall the total amount of such investments by a Federal savings 
association exceed 5 percent of the capital and surplus of the Federal sav-
ings association. 
§ 30304. Borrowing power 
(a) AUTHORITY TO ISSUE OBLIGATIONS.—A licensee shall have authority 
to borrow money and to issue its securities, promissory notes, or other obli-
gations under such general conditions and subject to such limitations and 
regulations as the Administrator may prescribe. 
(b) DEBENTURES AND PARTICIPATING SECURITIES.— 
(1) AUTHORITY TO PURCHASE OR GUARANTEE.—To encourage the 
formation and growth of small business investment companies, the Ad-
ministrator may, when authorized in an appropriation Act, purchase, 
or guarantee the timely payment of all principal and interest as sched-
uled on, debentures or participating securities issued by a licensee. 
(2) TERMS AND CONDITIONS.—A purchase or guarantee under para-
graph (1) may be made on such terms and conditions as the Adminis-
trator considers appropriate, under regulations prescribed by the Ad-
ministrator. 
(3) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full 
faith and credit of the United States is pledged to the payment of all 
amounts that may be required to be paid under any guarantee under 
this subsection. 
(4) DEBENTURES.— 
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(A) SUBORDINATION.—A debenture purchased or guaranteed by 
the Administrator under this subsection shall be subordinate to 
any other debenture bond, promissory note, or other debt or obli-
gation of a licensee, unless the Administrator, in the exercise of 
reasonable investment prudence and in consideration of the finan-
cial soundness of the licensee, determines otherwise. 
(B) TERM; INTEREST.—A debenture purchased or guaranteed 
by the Administrator under this subsection— 
(i) may be issued for a term of not to exceed 15 years; and 
(ii) shall bear interest at a rate not less than— 
(I) a rate determined by the Secretary of the Treasury 
taking into consideration the current average market 
yield on outstanding marketable obligations of the 
United States with remaining periods to maturity com-
parable to the average maturities on such debentures, 
adjusted to the nearest 0.125 percent; plus 
(II) in the case of a debenture obligated after Sep-
tember 30, 2001, an additional charge in an amount es-
tablished annually by the Administrator as necessary to 
reduce to zero the cost (as defined in section 502 of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) to 
the Administrator of purchasing and guaranteeing de-
bentures under this chapter, which amount— 
(aa) may not exceed 1.38 percent per year; and 
(bb) which shall be paid to and retained by the 
Administrator. 
(5) OTHER TERMS AND CONDITIONS.—A debenture or participating 
security purchased or guaranteed under this subsection shall also con-
tain such other terms as the Administrator may determine. 
(6) TOTAL AMOUNT.—The total amount of debentures and partici-
pating securities of a licensee that may be guaranteed by the Adminis-
trator and outstanding shall not exceed 300 percent of the private cap-
ital of the licensee. 
(7) MAXIMUM LEVERAGE.— 
(A) IN GENERAL.—The maximum amount of outstanding lever-
age made available to a licensee shall be determined by the 
amount of the licensee’s private capital as follows: 
(i) If the company has private capital of not more than 
$15,000,000, the total amount of leverage shall not exceed 
300 percent of the amount of the licensee’s private capital. 
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(ii) If the licensee has private capital of more than 
$15,000,000 but not more than $30,000,000, the total 
amount of leverage shall not exceed— 
(I) $45,000,000; plus 
(II) 200 percent of the amount of private capital over 
$15,000,000. 
(iii) If the company has private capital of more than 
$30,000,000, the total amount of leverage shall not exceed— 
(I) $75,000,000; plus 
(II) the lesser of— 
(aa) 100 percent of the amount of private capital 
over $30,000,000; or 
(bb) $15,000,000. 
(B) ADJUSTMENTS.—The dollar amounts in clauses (i), (ii), and 
(iii) of subparagraph (A) shall be adjusted annually to reflect in-
creases in the Consumer Price Index established by the Bureau of 
Labor Statistics of the Department of Labor. 
(C) INVESTMENTS
IN
LOW-INCOME
GEOGRAPHIC
AREAS.—In 
calculating the outstanding leverage of a licensee for the purposes 
of subparagraph (A), the Administrator shall not include the 
amount of the cost basis of any equity investment made by the 
licensee in a smaller enterprise located in a low-income geographic 
area, to the extent that the total of such amounts does not exceed 
50 percent of the licensee’s private capital. 
(D) INVESTMENTS IN ENERGY SAVING SMALL BUSINESSES.— 
(i) IN GENERAL.—Subject to clause (ii), in calculating the 
outstanding leverage of a company for purposes of subpara-
graph (A), the Administrator shall exclude the amount of the 
cost basis of any energy saving qualified investment in a 
smaller enterprise made in fiscal year 2009 or any fiscal year 
thereafter by a company licensed in the applicable fiscal year. 
(ii) LIMITATIONS.— 
(I) AMOUNT OF EXCLUSION.—The amount excluded 
under clause (i) for a company shall not exceed 33 per-
cent of the private capital of the company. 
(II) MAXIMUM INVESTMENT.—A company shall not 
make an energy saving qualified investment in any one 
entity in an amount equal to more than 20 percent of 
the private capital of the company. 
(III) OTHER TERMS.—The exclusion of amounts under 
clause (i) shall be subject to such terms as the Adminis-
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trator may impose to ensure that there is no cost (as de-
fined in section 502 of the Credit Reform Act of 1990 
(2 U.S.C. 661a)) with respect to purchasing or guaran-
teeing any debenture involved. 
(8) AUTHORITY TO HAVE OUTSTANDING BOTH GUARANTEED DEBEN-
TURES AND GUARANTEED PARTICIPATING SECURITIES.—Subject to the 
dollar and percentage limits stated in paragraphs (6) and (7), a li-
censee may issue and have outstanding both guaranteed debentures 
and guaranteed participating securities so long as the total amount of 
participating securities outstanding does not exceed 200 percent of the 
amount of the licensee’s private capital. 
(9) MAXIMUM AGGREGATE AMOUNT OF LEVERAGE.— 
(A) IN GENERAL.—Except as provided in subparagraph (B), the 
aggregate amount of outstanding leverage issued to any licensee 
or licensees that are commonly controlled (as determined by the 
Administrator) shall not exceed $90,000,000, as adjusted annually 
for increases in the Consumer Price Index. 
(B) EXCEPTIONS.—The Administrator may, on a case-by-case 
basis— 
(i) approve an amount of leverage that exceeds the amount 
described in subparagraph (A) for licensees under common 
control; and 
(ii) impose such additional terms and conditions as the Ad-
ministrator determines to be appropriate to minimize the risk 
of loss to the Administration in the event of default. 
(C) APPLICABILITY OF OTHER PROVISIONS.—Any leverage that 
is issued to a licensee or licensees commonly controlled in an 
amount that exceeds $90,000,000, whether as a result of an in-
crease in the Consumer Price Index or a decision of the Adminis-
trator, is subject to subsection (d). 
(D) INVESTMENTS
IN
LOW-INCOME
GEOGRAPHIC
AREAS.—In 
calculating the aggregate outstanding leverage of a licensee for 
purposes of subparagraph (A), the Administrator shall not include 
the amount of the cost basis of any equity investment made by 
the licensee in a smaller enterprise located in a low-income geo-
graphic area, to the extent that the total of such amounts does 
not exceed 50 percent of the amount of the licensee’s private cap-
ital. 
(E) INVESTMENTS IN ENERGY SAVING SMALL BUSINESSES.— 
(i) IN GENERAL.—Subject to clause (ii), in calculating the 
aggregate outstanding leverage of a company for purposes of 
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subparagraph (A), the Administrator shall exclude the 
amount of the cost basis of any energy saving qualified in-
vestment in a smaller enterprise made in fiscal year 2009 or 
any fiscal year thereafter by a company licensed in the appli-
cable fiscal year. 
(ii) LIMITATIONS.— 
(I) AMOUNT OF EXCLUSION.—The amount excluded 
under clause (i) for a company shall not exceed 33 per-
cent of the private capital of the company. 
(II) MAXIMUM INVESTMENT.—A company shall not 
make an energy saving qualified investment in any one 
entity in an amount equal to more than 20 percent of 
the private capital of the company. 
(III) OTHER TERMS.—The exclusion of amounts under 
clause (i) shall be subject to such terms as the Adminis-
trator may impose to ensure that there is no cost (as de-
fined in section 502 of the Credit Reform Act of 1990 
(2 U.S.C. 661a)) with respect to purchasing or guaran-
teeing any debenture involved. 
(c) THIRD PARTY DEBT.—The Administrator— 
(1) shall not permit a licensee having outstanding leverage to incur 
third party debt that would create or contribute to an unreasonable 
risk of default or loss to the Federal Government; and 
(2) shall permit a licensee having outstanding leverage to incur third 
party debt only on such terms and subject to such conditions as the 
Administrator may establish by regulation or otherwise. 
(d) REQUIRED CERTIFICATIONS.— 
(1) IN GENERAL.—The Administrator shall require a licensee, as a 
condition of approval of an application for leverage, to certify in writ-
ing— 
(A) in the case of a licensee with leverage less than or equal 
to $90,000,000, that not less than 20 percent of the licensee’s ag-
gregate dollar amount of financings will be provided to smaller en-
terprises; and 
(B) in the case of a licensee with leverage in excess of 
$90,000,000, that, in addition to satisfying the requirements of 
subparagraph (A), 100 percent of the licensee’s aggregate dollar 
amount of financings made in whole or in part with leverage in 
excess of $90,000,000 will be provided to smaller enterprises. 
(2) LICENSEES UNDER COMMON CONTROL.—Licensees under com-
mon control (as determined by the Administrator) shall be considered 
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to be a single licensee for purposes of determining both the applicability 
of and compliance with the investment percentage requirements of this 
subsection. 
(e) CAPITAL IMPAIRMENT.— 
(1) IN GENERAL.—Before approving an application for leverage sub-
mitted by a licensee, the Administrator— 
(A) shall determine that the private capital of the licensee meets 
the requirements of section 30301(g) of this title; and 
(B) shall determine (taking into account the nature of the as-
sets of the licensee, the amount and terms of any third party debt 
owed by the licensee, and any other factors determined to be rel-
evant by the Administrator) that the private capital of the licensee 
has not been impaired to such an extent that the issuance of addi-
tional leverage would create or otherwise contribute to an unrea-
sonable risk of default or loss to the Federal Government. 
(2) UNIFORM APPLICABILITY.—Any regulation issued by the Admin-
istrator to implement this subsection that applies to any licensee with 
outstanding leverage obtained before the effective date of the regulation 
shall apply uniformly to all licensees with outstanding leverage obtained 
before that effective date. 
(f) REDEMPTION OR REPURCHASE OF PREFERRED STOCK.—Notwith-
standing any other provision of law— 
(1) the Administrator may allow the issuer of any preferred stock 
sold to the Administrator before November 1, 1989, to redeem or re-
purchase the stock, on payment to the Administrator of an amount less 
than the par value of the stock, for a repurchase price determined by 
the Administrator after consideration of all relevant factors, includ-
ing— 
(A) the market value of the stock; 
(B) the value of benefits provided and anticipated to accrue to 
the issuer; 
(C) the amount of dividends paid, accrued, and anticipated; and 
(D) the estimate of the Administrator of any anticipated re-
demption; and 
(2) any amounts received by the Administrator from the repurchase 
of preferred stock shall be available solely to provide debenture leverage 
to licensees having 50 percent or more in aggregate dollar amount of 
their financings invested in smaller enterprises. 
(g) GUARANTEE OF PAYMENT OF, AND AUTHORITY TO PURCHASE, PAR-
TICIPATING SECURITIES.— 
(1) DEFINITIONS.—In this subsection: 
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