I 
117TH CONGRESS 
2D SESSION 
H. R. 9649 
To amend the Small Business Act to provide for contracting preferences 
and other benefits for emerging business enterprises, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 21, 2022 
Mr. CARSON introduced the following bill; which was referred to the 
Committee on Small Business 
A BILL 
To amend the Small Business Act to provide for contracting 
preferences and other benefits for emerging business en-
terprises, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Emerging Business 
Encouragement Act of 2022’’. 
SEC. 2. EMERGING BUSINESS ENTERPRISES. 
(a) DESIGNATION.—Section 3 of the Small Business 
Act (15 U.S.C. 632) is amended by adding at the end the 
following: 
‘‘(gg) EMERGING BUSINESS ENTERPRISE.— 
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‘‘(1) IN
GENERAL.—In this Act, the term 
‘emerging business enterprise’ means a concern des-
ignated by the Administrator in accordance with this 
section. 
‘‘(2) CRITERIA FOR DESIGNATION.—Not later 
90 days after the date of enactment of this sub-
section, the Administrator shall establish criteria for 
designation of a small business concern an emerging 
business enterprise which shall include the following: 
‘‘(A) NUMBER OF EMPLOYEES.—That the 
highest number of employees of the concern 
during the year preceding the date of applica-
tion is less than the larger of— 
‘‘(i) 10 percent of the number of em-
ployees that a small business concern with-
in that industry category may employ, if 
that small business concern is so classified 
by reason of a size standard under sub-
section (a) pertaining to the number of 
employees of the concern; or 
‘‘(ii) 25 employees. 
‘‘(B) AGE OF BUSINESS.—That the small 
business concern has been in operation for less 
than 5 years on the date of application. 
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‘‘(C) SALARY
REQUIREMENTS.—That the 
small business concern does not, in the Admin-
istrator’s determination, pay to an individual 
who owns any part of the concern or who is in 
a management position a salary greater than 
200 percent of the mean annual salary for an 
individual in the Managers of Companies and 
Enterprises sector (as assigned a North Amer-
ican Industry Classification System code begin-
ning with 55) or the equivalent from the most 
recent employment and wage estimates devel-
oped by the Secretary of Labor. 
‘‘(3) DEADLINE.—The Administrator shall com-
plete review of an application for designation as an 
emerging business enterprise and either issue or 
deny such designation not later than one year of re-
ceipt of such application. 
‘‘(4) TERMINATION OF DESIGNATION.—A des-
ignation as an emerging business enterprise shall 
terminate on the date on which the concern is no 
longer in compliance with the criteria under para-
graph (2), except that— 
‘‘(A) with respect to the requirement in 
paragraph (2)(A), such designation shall termi-
nate only if the concern employs 50 percent or 
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more employees than the number of employees 
that a small business concern within that indus-
try category may employ; and 
‘‘(B) with respect to the requirement in 
paragraph (2)(C), such designation shall termi-
nate only if the concern exceeds such require-
ment and employs not more than 10 percent of 
the number of employees that a small business 
concern within that industry category may em-
ploy, if that small business concern is so classi-
fied by reason of a size standard under sub-
section (a) pertaining to the number of employ-
ees of the concern. 
‘‘(5) PUBLIC
NOTIFICATION.—The Adminis-
trator shall take appropriate action to publicize the 
establishment of the procedures for designations 
under this paragraph, including by conducting out-
reach to eligible small business concerns. 
‘‘(6) CONTRACTOR
TRAINING.—The Adminis-
trator shall provide training on Federal procurement 
specifically for emerging business enterprises on an 
internet website of the Administrator, which shall be 
available to the public at no charge.’’. 
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(b) CONTRACTING PREFERENCE.—Section 15(g)(2) 
of the Small Business Act (15 U.S.C. 644(g)(2)) is 
amended by adding at the end the following: 
‘‘(G) 
EMERGING
BUSINESS
ENTER-
PRISES.— 
‘‘(i) IN GENERAL.—The head of each 
Federal agency shall, after consultation 
with the Administrator, establish goals for 
participation by emerging business enter-
prises in not less than 3 percent of all 
prime contracts and subcontracts of such 
agency for each fiscal year. 
‘‘(ii) REQUIREMENTS.—The head of a 
Federal agency— 
‘‘(I) shall make consistent efforts 
to annually expand participation by 
emerging business enterprises from 
each industry category in contracts of 
the agency; and 
‘‘(II) shall, subject to clause (iii), 
award a contract to an emerging busi-
ness enterprise if the head of a Fed-
eral agency determines the agency will 
not meet the goals established under 
this subparagraph for a fiscal year. 
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‘‘(iii) PREFERENCE.—The preference 
described in clause (ii)(II) shall take pri-
ority over any preference for procurement 
from the procurement list established pur-
suant to section 8503 of title 41, United 
States Code, or the Federal Prison Indus-
tries 
catalog 
described 
under 
section 
4124(d) of title 18, United States Code. 
‘‘(iv) REPORTS.— 
‘‘(I) 
REPORTS
FROM
AGEN-
CIES.—At the conclusion of each fiscal 
year, the head of each Federal agency 
shall report to the Administrator on 
the extent of participation by emerg-
ing business enterprises in procure-
ment contracts of such agency. Such 
reports shall contain appropriate jus-
tifications for failure to meet the goals 
established under this subparagraph. 
‘‘(II) REPORTS TO CONGRESS.— 
The 
Administrator 
shall 
annually 
compile and analyze the reports sub-
mitted by agencies pursuant to sub-
clause (I) and shall submit to the 
President and the Committee on 
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Small Business and Entrepreneurship 
of the Senate and the Committee on 
Small Business of the House of Rep-
resentatives the compilation and anal-
ysis, which shall include the following: 
‘‘(aa) The goals in effect for 
each agency and the agency’s 
performance in attaining such 
goals. 
‘‘(bb) An analysis of any 
failure to achieve individual agen-
cy goals and the actions planned 
by such agency (that have been 
approved by the Administrator) 
to achieve the goals in the suc-
ceeding fiscal year. 
‘‘(cc) The total number and 
dollar value of prime contracts 
and subcontracts awarded to 
emerging business enterprises for 
each agency. 
‘‘(III) ANNUAL
PRESIDENTIAL 
REPORT
ON
THE
STATE
OF
SMALL 
BUSINESS.—The President shall in-
clude the information required by sub-
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clause (II) in each annual report to 
the Congress on the state of small 
business prepared pursuant to section 
303(a) of the Small Business Eco-
nomic Policy Act of 1980 (15 U.S.C. 
631b(a)).’’. 
(c) FEE WAIVERS.—Section 7(a) of the Small Busi-
ness Act (15 U.S.C. 636(a)) is amended by adding at the 
end the following: 
‘‘(38) FEE WAIVERS.—The Administrator may 
not collect an origination fee or a guarantee fee de-
scribed in paragraph (18) in connection with a loan 
made under this subsection to an emerging business 
enterprise, unless— 
‘‘(A) the President’s budget for the upcom-
ing fiscal year, submitted to Congress pursuant 
to section 1105(a) of title 31, United States 
Code, includes a cost for the program estab-
lished under this paragraph that is above zero; 
and 
‘‘(B) the Administrator determines car-
rying out this paragraph will have no adverse 
effect on the waivers provided under paragraph 
(31)(G) or (33)(E)(ii) for a fiscal year. 
‘‘(39) EMERGING BUSINESS ENTERPRISES.— 
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‘‘(A) REPORTS.—On the date that is 1 
year after the end of the first fiscal year for 
which a guaranteed loan is made to an emerg-
ing business enterprise under this subsection, 
and annually thereafter, each lender making 
such a loan shall submit to the Administrator 
a report with respect to the preceding fiscal 
year on the total number and dollar amount of 
such loans made and the number of waivers 
issued under paragraph (38). 
‘‘(B) VERIFICATION.—A lender shall verify 
with the Administrator the status of a concern 
as an emerging business enterprise before mak-
ing a loan guaranteed under this subsection to 
such emerging business enterprise. 
‘‘(C) PENALTY.—If a concern received a 
loan under this subsection and fraudulently 
misrepresented the status of the concern as an 
emerging business enterprise, that concern 
shall— 
‘‘(i) repay the amount of the loan to 
the lender (from which amount the lender 
shall repay the amount of any guarantee 
paid on the loan to the Administrator); 
and 
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‘‘(ii) pay a fine to the Administrator 
in an amount determined by the Adminis-
trator.’’. 
SEC. 3. RULEMAKING. 
(a) IN GENERAL.—Not later 1 year after the date 
of enactment of this subsection and for each industry cat-
egory for which the Administrator of the Small Business 
Administration established a size standard under section 
3(a) of the Small Business Act (15 U.S.C. 632(a)), the 
Administrator shall issue a rule— 
(1) establishing procedures for designating a 
small business concern in each such industry cat-
egory as an emerging business enterprise that in-
clude the criteria under subsection (gg)(3) of section 
3 of the Small Business Act (15 U.S.C. 632), as 
added by this Act, and a process for appealing des-
ignation decisions of the Administrator; 
(2) establishing procedures for certification by 
the Administrator as an emerging business enter-
prise; 
(3) requiring a small business concern to annu-
ally submit documentation to the Administrator to 
establish eligibility for designation as an emerging 
business enterprise; and 
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