Small Business Reauthorization Act of 1997
PL 105-135 (S.1139), enacted 12/02/1997

I l l STAT. 2592 
PUBLIC LAW 105-135—DEC. 2, 1997 
Public Law 105-135 
105th Congress 
An Act 
Dec. 2, 1997 
To reauthorize the programs of the Small Business Administration, and for other 
[S. 1139] 
purposes. 
Be it enacted by the Senate and House of Representatives of 
Small Business 
the United States of America in Congress assembled. 
Reauthorization 
Act of 1997. 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
15 use 631 note. 
(a) SHORT TiTLE.—This Act may be cited as the "Small Business 
Reauthorization Act of 1997". 
(b) TABLE OF CONTENTS.—The table of contents for this Act 
is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
Sec. 3. Effective date. 
TITLE I—AUTHORIZATIONS 
Sec. 101. Authorizations. 
TITLE II—FINANCIAL ASSISTANCE 
Subtitle A—Microloan Program 
Sec. 201. Microloan program. 
Sec. 202. Welfare-to-work microloan initiative. 
Subtitle B—Small Business Investment Company Program 
Sec. 211. 5-year commitments for SBICs at option of Administrator. 
Sec. 212. Underserved areas. 
Sec. 213. Private capital. 
Sec. 214. Fees. 
Sec. 215. Small business investment company program reform. 
Sec. 216. Examination fees. 
Subtitle C—Certified Development Company Program 
Sec. 221. Loans for plant acquisition, construction, conversion, and expansion. 
Sec. 222. Development company debentures. 
Sec. 223. Premier certified lenders program. 
Subtitle D—Miscellaneous Provisions 
Sec. 231. Background check of loan applicants. 
Sec. 232. Report on increased lender approval, servicing, foreclosure, liquidation, 
and litigation of section 7(a) loans. 
Sec. 233. Completion of planning for loan monitoring system. 
TITLE III—WOMEN'S BUSINESS ENTERPRISES 
Sec. 301. Interagency committee participation. 
Sec. 302. Reports. 
Sec. 303. Council duties. 
Sec. 304. Council membership. 
Sec. 305. Authorization of appropriations. 
Sec. 306. National Women's Business Council procurement project. 
Sec. 307. Studies and other research. 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2593 
Sec. 308. Women's business centers. 
TITLE IV—COMPETITIVENESS PROGRAM AND PROCUREMENT 
OPPORTUNITIES 
Subtitle A—Small Business Competitiveness Program 
Sec. 401. Program term. 
Sec. 402. Monitoring agency performance. 
Sec. 403. Reports to Congress. 
Sec. 404. Small business participation in dredging. 
Sec. 405. Technical amendments. 
Subtitle B—Small Business Procurement Opportunities Program 
Sec. 411. Contract bundling. 
Sec. 412. Definition of contract bundling. 
Sec. 413. Assessing proposed contract bundling. 
Sec. 414. Reporting of bundled contract opportunities. 
Sec. 415. Evaluating subcontract participation in awarding contracts. 
Sec. 416. Improved notice of subcontracting opportunities. 
Sec. 417. Deadlines for issuance of regulations. 
TITLE V—MISCELLANEOUS PROVISIONS 
Sec. 501. Small Business Technology Transfer program. 
Sec. 502. Small Business Development Centers. 
Sec. 503. Pilot preferred surety bond guarantee program extension. 
Sec. 504. Extension of cosponsorship authority. 
Sec. 505. Asset sales. 
Sec. 506. Small business export promotion. 
Sec. 507. Defense Loan and Technical Assistance program. 
Sec. 508. Very small business concerns. 
Sec. 509. Trade assistance program for small business concerns adversely affected 
by NAFTA. 
TITLE VI—HUBZONE PROGRAM 
Sec. 601. Short title. 
Sec. 602. Historically underutilized business zones. 
Sec. 603. Technical and conforming amendments to the Small Business Act. 
Sec. 604. Other technical and conforming amendments. 
Sec. 605. Regulations. 
Sec. 606. Report. 
Sec. 607. Authorization of appropriations. 
TITLE VII—SERVICE DISABLED VETERANS 
Sec. 701. Purposes. 
Sec. 702. Definitions. 
Sec. 703. Report by Small Business Administration. 
Sec. 704. Information collection. 
Sec. 705. State of small business report. 
Sec. 706. Loans to veterans. 
Sec. 707. Entrepreneurial training, counseling, and management assistance. 
Sec. 708. Grants for eligible veterans' outreacn programs. 
Sec. 709. Outreach for eligible veterans. 
SEC. 2. DEFINITIONS. 
15 USC 631 note. 
In this Act— 
(1) the term "Administration" means the Small Business 
Administration; 
(2) the term "Administrator" means the Administrator of 
the Small Business Administration; 
(3) the term "Committees" means the Committees on Small 
Business of the House of Representatives and the Senate; and 
(4) the term "small business concern" has the meaning 
given the term in section 3 of the Small Business Act (15 
U.S.C. 632). 
SEC. 3. EFFECTIVE DATE. 
15 USC 631 note. 
This Act and the amendments made by this Act shall take 
effect on October 1, 1997. 
I l l STAT. 2594 
PUBLIC LAW 105-135—DEC. 2, 1997 
TITLE I—AUTHORIZATIONS 
SEC. 101. AUTHORIZATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 note) 
is amended by striking subsections (c) through (q) and inserting 
the following: 
"(c) FISCAL YEAR 1998.— 
"(1) PROGRAM LEVELS.—The following program levels are 
authorized for fiscal year 1998: 
"(A) For the programs authorized by this Act, the 
Administration is authorized to make— 
"(i) $40,000,000 in technical assistance grants, as 
provided in section 7(m); and 
"(ii) $60,000,000 in direct loans, as provided in 
section 7(m). 
"(B) For the programs authorized by this Act, the 
Administration is authorized to make $16,040,000,000 in 
deferred participation loans and other financings. Of such 
sum, the Administration is authorized to make— 
"(i) $12,000,000,000 in general business loans as 
provided in section 7(a); 
"(ii) $3,000,000,000 in financings as provided in 
section 7(a)(13) of this Act and section 504 of the 
Small Business Investment Act of 1958; 
"(iii) $1,000,000,000 in loans as provided in section 
7(a)(21); and 
"(iv) $40,000,000 in loans as provided in section 
7(m). 
"(C) For the programs authorized by title III of the 
Small Business Investment Act of 1958, the Administration 
is authorized to make— 
"(i) $700,000,000 in purchases of participating 
securities; and 
"(ii) $600,000,000 in guarantees of debentures. 
"(D) For the programs authorized by part B of title 
rV of the Small Business Investment Act of 1958, the 
Administration is authorized to enter into guarantees not 
to exceed 
$2,000,000,000, of which not more 
than 
$650,000,000 may be in bonds approved pursuant to section 
411(a)(3) of that Act. 
"(E) The Administration is authorized to make grants 
or enter into cooperative agreements— 
"(i) for the Service Corps of Retired Executives 
program authorized by section 8(b)(1), $4,000,000; and 
"(ii) for activities of small business development 
centers pursuant to section 21(c)(3)(G), $15,000,000, 
to remain available until expended. 
"(2) ADDITIONAL AUTHORIZATIONS.— 
"(A) There are authorized to be appropriated to the 
Administration for fiscal year 1998 such sums as may 
be necessary to carry out this Act, including administrative 
expenses and necessary loan capital for disaster loans 
pursuant to section 7(b), and to carry out the Small Busi-
ness Investment Act of 1958, including salaries and 
expenses of the Administration. 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2595 
"(B) Notwithstanding subparagraph (A), for fiscal year 
1998— 
"(i) no funds are authorized to be provided to carry 
out the loan program authorized by section 7(a)(21) 
except by transfer from another Federal department 
or agency to the Administration, unless the program 
level authorized for general business loans under para-
graph (l)(B)(i) is fully funded; and 
"(ii) the Administration may not approve loans 
on behalf of the Administration or on behalf of any 
other department or agency, by contract or otherwise, 
under terms and conditions other than those specifi-
cally authorized under this Act or the Small Business 
Investment Act of 1958, except that it may approve 
loans under section 7(a)(21) of this Act in gross 
amounts of not more than $1,250,000. 
"(d) FISCAL YEAR 1999.— 
"(1) PROGRAM LEVELS.—The following program levels are 
authorized for fiscal year 1999: 
"(A) For the programs authorized by this Act, the 
Administration is authorized to make— 
"(i) $40,000,000 in technical assistance grants as 
provided in section 7(m); and 
"(ii) $60,000,000 in direct loans, as provided in 
section 7(m). 
"(B) For the programs authorized by this Act, the 
Administration is authorized to make $17,540,000,000 in 
deferred participation loans and other financings. Of such 
sum, the Administration is authorized to make— 
"(i) $13,000,000,000 in general business loans as 
provided in section 7(a); 
"(ii) $3,500,000,000 in financings as provided in 
section 7(a)(13) of this Act and section 504 of the 
Small Business Investment Act of 1958; 
"(iii) $1,000,000,000 in loans as provided in section 
7(a)(21);and 
"(iv) $40,000,000 in loans as provided in section 
7(m). 
"(C) For the programs authorized by title III of the 
Small Business Investment Act of 1958, the Administration 
is authorized to make— 
"(i) $800,000,000 in purchases of participating 
"(ii) $700,000,000 in guarantees of debentures. 
"(D) For the programs authorized by part B of title 
IV of the Small Business Investment Act of 1958, the 
Administration is authorized to enter into guarantees not 
to exceed 
$2,000,000,000, of which not more 
than 
$650,000,000 may be in bonds approved pursuant to section 
411(a)(3) of that Act. 
"(E) The Administration is authorized to msike grants 
or enter cooperative agreements— 
"(i) for the Service Corps of Retired Executives 
program authorized by section 8(b)(1), $4,500,000; and 
"(ii) for activities of small business development 
centers pursuant to section 21(c)(3)(G), not to exceed 
$15,000,000, to remain available until expended. 
Ill STAT. 2596 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(2) ADDITIONAL AUTHORIZATIONS.— 
"(A) There are authorized to be appropriated to the 
Administration for fiscal year 1999 such sums as may 
be necessary to carry out this Act, including administrative 
expenses and necessary loan capital for disaster loans 
pursuant to section 7(b), and to carry out the Small Busi-
ness Investment Act of 1958, including salaries and 
expenses of the Administration. 
"(B) Notwithstanding subparagraph (A), for fiscal year 
1999— 
"(i) no funds are authorized to be provided to carry 
out the loan program authorized by section 7(a)(21) 
except by transfer from another Federal department 
or agency to the Administration, unless the program 
level authorized for general business loans under para-
graph (l)(B)(i) is fully funded; and 
"(ii) the Administration may not approve loans 
on behalf of the Administration or on behalf of any 
other department or agency, by contract or otherwise, 
under terms and conditions other than those specifi-
cally authorized under this Act or the Small Business 
Investment Act of 1958, except that it may approve 
loans under section 7(a)(21) of this Act in gross 
amounts of not more than $1,250,000. 
"(e) FISCAL YEAR 2000.— 
"(1) PROGRAM LEVELS.—^The following program levels are 
authorized for fiscal year 2000: 
"(A) For the programs authorized by this Act, the 
Administration is authorized to make— 
"(i) $40,000,000 in technical assistance grants as 
provided in section 7(m); and 
"(ii) $60,000,000 in direct loans, as provided in 
section 7(m). 
"(B) For the programs authorized by this Act, the 
Administration is authorized to make $20,040,000,000 in 
deferred participation loans and other financings. Of such 
sum, the Administration is authorized to make— 
"(i) $14,500,000,000 in general business loans as 
provided in section 7(a); 
"(ii) $4,500,000,000 in financings as provided in 
section 7(a)(13) of this Act and section 504 of the 
Small Business Investment Act of 1958; 
"(iii) $1,000,000,000 in loans as provided in section 
7(a)(21); and 
"(iv) $40,000,000 in loans as provided in section 
7(m). 
"(C) For the programs authorized by title III of the 
Small Business Investment Act of 1958, the Administration 
is authorized to make— 
"(i) $900,000,000 in purchases of participating 
securities; and 
"(ii) $800,000,000 in guarantees of debentures. 
"(D) For the programs authorized by part B of title 
rV of the Small Business Investment Act of 1958, the 
Administration is authorized to enter into guarantees not 
to exceed $2,000,000,000, of which 
not more 
than 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2597 
$650,000,000 may be in bonds approved pursuant to section 
411(a)(3) of that Act. 
"(E) The Administration is authorized to make grants 
or enter cooperative agreements— 
"(i) for the Service Corps of Retired Executives 
program authorized by section 8(b)(1), $5,000,000; and 
"(ii) for activities of small business development 
centers pursuant to section 21(c)(3)(G), not to exceed 
$15,000,000, to remain available until expended. 
"(2) ADDITIONAL AUTHORIZATIONS.— 
"(A) There are authorized to be appropriated to the 
Administration for fiscal year 2000 such sums as may 
be necessary to carry out this Act, including administrative 
expenses and necessary loan capital for disaster loans 
pursuant to section 7(b), and to carry out the Small Busi-
ness Investment Act of 1958, including salaries and 
expenses of the Administration. 
"(B) Notwithstanding subparagraph (A), for fiscal year 
2000— 
"(i) no funds are authorized to be provided to carry 
out the loan program authorized by section 7(a)(21) 
except by transfer from another Federal department 
or agency to the Administration, unless the program 
level authorized for general business loans under para-
graph (l)(B)(i) is fully funded; and 
"(ii) the Administration may not approve loans 
on behalf of the Administration or on behalf of any 
other department or agency, by contract or otherwise, 
under terms and conditions other than those specifi-
cally authorized under this Act or the Small Business 
Investment Act of 1958, except that it may approve 
loans under section 7(a)(21) of this Act in gross 
amounts of not more than $1,250,000.". 
TITLE II—FINANCIAL ASSISTANCE 
Subtitle A—Microloan Program 
SEC. 201. MICROLOAN PROGRAM. 
(a) LOAN LIMITS.—Section 7(m)(3)(C) of the Small Business 
Act (15 U.S.C. 636(m)(3)(C)) is amended by striking "$2,500,000" 
and inserting "$3,500,000". 
(b) LOAN LOSS RESERVE FUND.—Section 7(m)(3)(D) of the Small 
Business Act (15 U.S.C. 636(m)(3)(D)) is amended by striking 
clauses (i) and (ii), and inserting the following: 
"(i) during the initial 5 years of the intermediary's 
participation in the program under this subsection, 
at a level equal to not more than 15 percent of the 
outstanding balance of the notes receivable owed to 
the intermediary; and 
"(ii) in each year of participation thereafter, at 
a level equal to not more than the greater of— 
I l l STAT. 2598 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(I) 2 times an amount reflecting the total 
losses of the intermediary as a result of participa-
tion in the program under this subsection, as deter-
mined by the Administrator on a case-by-case 
basis; or 
"(11) 10 percent of the outstanding balance 
of the notes receivable owed to the intermediary,". 
(c) AUTHORIZATION OF APPROPRIATIONS.—Section 7(m) of the 
Small Business Act (15 U.S.C. 636(m)) is amended— 
(1) in the subsection heading, by striking "DEMONSTRA-
TION"; 
(2) by striking "Demonstration" each place that term 
appears; 
(3) by striking "demonstration" each place that term 
appears; and 
(4) in paragraph (12), by striking "during fiscal years 1995 
through 1997" and inserting "during fiscal years 1998 through 
2000". 
(d) TECHNICAL ASSISTANCE GRANTS.—Section 7(m) of the Small 
Business Act (15 U.S.C. 636(m)) is amended— 
(1) in paragraph (4)(E)— 
(A) by striking "Each intermediary" and inserting the 
following: 
"(i) IN GENERAL.—^Each intermediary"; 
(B) by striking "15" and inserting "25"; and 
(C) by adding at the end the following: 
"(ii) 
TECHNICAL 
ASSISTANCE.—An 
intermediary 
may expend not more than 25 percent of the funds 
received under paragraph (l)(B)(ii) to enter into third 
party contracts for the provision of technical assist-
ance."; and 
(2) in paragraph (5)(A)— 
(A) by striking "in each of the 5 years of the demonstra-
tion program established under this subsection,"; and 
(B) by striking "for terms of up to 5 years" eind insert-
ing "annually". 
SEC. 202. WELFARE-TO-WORK MICROLOAN INITIATIVE. 
(a) INITIATIVE.—Section 7(m) of the Small Business Act (15 
U.S.C. 636(m)) is amended— 
(1) in paragraph (1)(A)— 
(A) in clause (ii), by striking "and" at the end; 
(B) in clause (iii), by striking the period at the end 
and inserting "; and"; and 
(C) by adding at the end the following: 
"(iv) to establish a welfare-to-work microloan initiative, 
which shall be administered by the Administration, in order 
to test the feasibility of supplementing the technical assist-
ance grants provided under clauses (ii) and (iii) of subpara-
graph (B) to individuals who are receiving assistance under 
the State program funded under part A of title IV of 
the Social Security Act (42 U.S.C. 601 et seq.), or under 
any comparable State funded means tested program of 
assistance for low-income individuals, in order to ade-
quately assist those individuals in— 
"(I) establishing small businesses; and 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2599 
"(11) eliminating their dependence on that assist-
ance."; 
(2) in paragraph (4), by adding at the end the following: 
"(F) SUPPLEMENTAL GRANT.— 
"(i) IN GENERAL.—The Administration may accept 
any funds transferred to the Administration from other 
departments or agencies of the Federal Government 
to make grants in accordance with this subparagraph 
and section 202(b) of the Small Business Reauthoriza-
tion Act of 1997 to participating intermediaries and 
technical assistance providers under paragraph (5), for 
use in accordance with clause (iii) to provide additional 
technical assistance and related services to recipients 
of assistance under a State program described in para-
graph (l)(A)(iv) at the time they initially apply for 
assistance under this subparagraph. 
"(ii) 
ELIGIBLE RECIPIENTS; GRANT AMOUNTS.—In 
making grants under this subparagraph, the Adminis-
tration 
may 
select, 
from 
among 
participating 
intermediaries 
and technical assistance 
providers 
described in clause (i), not more than 20 grantees 
in fiscal year 1998, not more than 25 grantees in 
fiscal year 1999, and not more than 30 grantees in 
fiscal year 2000, each of whom may receive a grant 
under this subparagraph in an amount not to exceed 
$200,000 per year. 
"(iii) USE OF GRANT AMOUNTS.—Grants under this 
subparagraph— 
"(I) are in addition to other grants provided 
under this subsection and shall not require the 
contribution of matching amounts as a condition 
of eligibility; and 
"(II) may be used by a grantee— 
"(aa) to pay or reimburse a portion of child 
care and transportation costs of recipients of 
assistance described in clause (i), to the extent 
such costs are not otherwise paid by State 
block grants under the Child Care Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858 
et seq.) or under part A of title IV of the 
Social Security Act (42 U.S.C. 601 et seq.); 
and 
"(bb) for marketing, management, and 
technical assistance to recipients of assistance 
described in clause (i). 
"(iv) MEMORANDUM OF UNDERSTANDING.—Prior to 
accepting any transfer of funds under clause (i) from 
a department or agency of the Federal Government, 
the Administration shall enter into a Memorandum 
of Understanding with the department or agency, 
which shall— 
"(I) specify the terms and conditions of the 
grants under this subparagraph; and 
"(II) provide for appropriate monitoring of 
expenditures by each grantee under this subpara-
graph and each recipient of assistance described 
in clause (i) who receives assistance from a grantee 
Ill STAT. 2600 
PUBLIC LAW 105-135—DEC. 2, 1997 
under this subparagraph, in order to ensure 
compHance with this subparagraph by those 
grantees and recipients of assistance."; 
(3) in paragraph (6), by adding at the end the following: 
"(E) 
ESTABLISHMENT OF CHILD CARE OR TRANSPOR-
TATION BUSINESSES.—In addition to other eligible small 
businesses concerns, borrowers under any program under 
this subsection may include individuals who will use the 
loan proceeds to establish for-profit or nonprofit child care 
establishments or businesses providing for-profit transpor-
tation services."; 
(4) in paragraph (9)— 
(A) by striking the paragraph designation and para-
graph heading and inserting the following: 
"(9) 
GRANTS FOR MANAGEMENT, MARKETING, TECHNICAL 
ASSISTANCE, AND RELATED SERVICES.—"; and 
(B) by adding at the end the following: 
"(C) 
WELFARE-TO-WORK MICROLOAN INITIATIVE.—Of 
amounts made available to carry out the welfare-to-work 
microloan initiative under paragraph (l)(A)(iv) in any fiscal 
year, the Administration may use not more than 5 percent 
to provide technical assistance, either directly or through 
contractors, 
to 
welfare-to-work 
microloan 
initiative 
grantees, to ensure that, as grantees, they have the knowl-
edge, skills, and understanding of microlending and wel-
fare-to-work transition, and other related issues, to operate 
a successful welfare-to-work microloan initiative."; and 
(5) by adding at the end the following: 
Reports. 
"(13) EVALUATION OF WELFARE-TO-WORK MICROLOAN INITIA-
TIVE.—On January 31, 1999, and annually thereafter, the 
Administration shall submit to the Committees on Small Busi-
ness of the House of Representatives and the Senate a report 
on any monies distributed pursuant to paragraph (4)(F).". 
15 use 636 note. 
(b) TRANSFER OF FUNDS.— 
(1) IN GENERAL.—^No funds are authorized to be appro-
priated or otherwise provided to carry out the grant program 
under section 7(m)(4)(F) of the Small Business Act (15 U.S.C. 
636(m)(4)(F)) (as added by this section), except by transfer 
from another department or agency of the Federal Government 
to the Administration in accordance with this subsection. 
(2) LIMITATION ON AMOUNTS.—^The total amount transferred 
to the Administration from other departments and agencies 
of the Federal Government to carry out the grant program 
under section 7(m)(4)(F) of the Small Business Act (15 U.S.C. 
636(m)(4)(F)) (as added by this section) shall not exceed— 
(A) $3,000,000 for fiscal year 1998; 
(B) $4,000,000 for fiscal year 1999; and 
(C) $5,000,000 for fiscal year 2000. 
Subtitle B—Small Business Investment 
Company Program 
SEC. 211. 5-YEAR COMMITMENTS FOR SBICs AT OPTION OF ADMINIS-
TRATOR. 
Section 20(a)(2) of the Small Business Act (15 U.S.C. 631 note) 
is amended in the last sentence by striking "the following fiscal 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2601 
year" and inserting "any 1 or more of the 4 subsequent fiscal 
years". 
SEC. 212. UNDERSERVED AREAS. 
Section 301(c)(4)(B) of the Small Business Investment Act of 
1958 (15 U.S.C. 681(c)(4)(B)) is amended to read as follows: 
"(B) LEVERAGE.—^An applicant licensed pursuant to the 
exception provided in this paragraph shall not be eligible 
to receive leverage as a licensee until the applicant satisfies 
the requirements of section 302(a), unless the applicant— 
"(i) files an application for a license not later than 
180 days after the date of enactment of the Small 
Business Reauthorization Act of 1997; 
"(ii) is located in a State that is not served by 
a licensee; and 
"(iii) agrees to be limited to 1 tier of leverage 
available under section 302(b), until the applicant 
meets the requirements of section 302(a).". 
SEC. 213. PRIVATE CAPITAL. 
Section 103(9)(B)(iii) of the Small Business Investment Act 
of 1958 (15 U.S.C. 662(9)(B)(iii)) is amended— 
(1) by redesignating subclauses (I) and (II) as subclauses 
(II) and (III), respectively; and 
(2) by inserting before subclause (II) (as redesignated) the 
following: 
"(I) funds obtained from the business revenues 
(excluding any governmental appropriation) of any 
federally chartered or government-sponsored cor-
poration established prior to October 1, 1987;". 
SEC. 214. FEES. 
Section 301 of the Small Business Investment Act of 1958 
(15 U.S.C. 681) is amended by adding at the end the following: 
"(e) FEES.— 
"(1) IN GENERAL.—^The Administration may prescribe fees 
to be paid by each applicant for a license to operate as a 
small business investment company under this Act. 
"(2) USE OF AMOUNTS.—^Fees collected under this sub-
section— 
"(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.". 
SEC. 215. SMALL BUSINESS 
INVESTMENT 
COMPANY 
PROGRAM 
REFORM. 
(a) BANK INVESTMENTS.—Section 302(b) of the Small Business 
Investment Act of 1958 (15 U.S.C. 682(b)) is amended by striking 
"1956," and all that follows before the period and inserting the 
following: "1956, any national bank, or any member bank of the 
Federal Reserve System or nonmember insured bank to the extent 
permitted under applicable State law, may invest in any 1 or 
more small business investment companies, or in any entity estab-
lished to invest solely in small business investment companies, 
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". 
39-194 O - 97 - 17 : QL 3 Part 3 
Ill STAT. 2602 
PUBLIC LAW 105-135—DEC. 2, 1997 
(b) INDEXING FOR LEVERAGE.—Section 303 of the Small Busi-
ness Investment Act of 1958 (15 U.S.C. 683) is amended— 
(1) in subsection (h)— 
(A) in paragraph (2), by adding at the end the following: 
"(D)(i) The dollar amounts in subparagraphs (A), (B), 
and (C) shall be adjusted annually to reflect increases 
in the Consumer Price Index established by the Bureau 
of Labor Statistics of the Department of Labor. 
"(ii) The initial adjustments made under this subpara-
graph after the date of enactment of the Small Business 
Reauthorization Act of 1997 shall reflect only increases 
from March 31, 1993."; and 
(B) by striking paragraph (4) and inserting the follow-
ing: 
"(4) MAXIMUM AGGREGATE AMOUNT OF LEVERAGE.— 
"(A) IN GENERAL.—Except as provided in subparagraph 
(B), the aggregate amount of outstanding leverage issued 
to any company or companies that are commonly controlled 
(as determined by the Administrator) may 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 compa-
nies under common control; and 
"(ii) impose such additional terms and conditions 
as the Administrator determines to be appropriate to 
minimize the risk of loss to the Administration in 
the event of default. 
"(C) APPLICABILITY OF OTHER PROVISIONS.—^Any lever-
age that is issued to a company or companies commonly 
controlled in an eimount that exceeds $90,000,000, whether 
as a result of an increase in the Consumer Price Index 
or a decision of the Administrator, is subject to subsection 
(d)."; and 
(2) by striking subsection (d) and inserting the following: 
"(d) REQUIRED CERTIFICATIONS.— 
"(1) IN GENERAL.—^The Administrator shall require each 
licensee, as a condition of approval of an application for lever-
age, to certify in writing— 
"(A) for licensees with leverage less than or equal 
to $90,000,000, that not less than 20 percent of the licens-
ee's aggregate dollar amount of financings will be provided 
to smaller enterprises; and 
"(B) 
for 
licensees 
with 
leverage 
in 
excess 
of 
$90,000,000, that, in addition to satisfying the require-
ments 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 (as defined in section 
103(12)). 
"(2) MULTIPLE LICENSEES.—^Multiple licensees under com-
mon control (as determined by the Administrator) shall be 
considered to be a single licensee for purposes of determining 
both the applicability of and compliance with the investment 
percentage requirements of this subsection.". 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2603 
(c) TAX DISTRIBUTIONS.—Section 303(g)(8) of the Small Business 
Investment Act of 1958 (15 U.S.C. 683(g)(8)) is amended by adding 
at the end the following: "A company may also elect to make 
a distribution under this paragraph at the end of any calendar 
quarter based on a quarterly estimate of the maximum tax liability. 
If a company makes 1 or more quarterly distributions for a calendar 
year, and the aggregate amount of those distributions exceeds the 
maximum amount that the company could have distributed based 
on a single annual computation, any subsequent distribution by 
the company under this paragraph shall be reduced by an amount 
equal to the excess amount distributed.". 
(d) LEVERAGE FEE.—Section 303(i) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 683(i)) is amended by striking 
", payable upon" and all that follows before the period and inserting 
the following: "in the following manner: 1 percent upon the date 
on which the Administration enters into any commitment for such 
leverage with the licensee, and the balance of 2 percent (or 3 
percent if no commitment has been entered into by the Administra-
tion) on the date on which the leverage is drawn by the licensee". 
(e) PERIODIC ISSUANCE OF GUARANTEES AND TRUST CERTIFI-
CATES.—Section 320 of the Small Business Investment Act of 1958 
(15 U.S.C. 687m) is amended by striking "three months" and insert-
ing "6 months". 
SEC. 216. EXAMINATION FEES. 
Section 310(b) of the Small Business Investment Act of 1958 
(15 U.S.C. 687b(b)) is amended by inserting after the first sentence 
the following: "Fees collected under this subsection shall be depos-
ited in the account for salaries and expenses of the Administration, 
and are authorized to be appropriated solely to cover the costs 
of examinations smd other program oversight activities.". 
Subtitle C—Certified Development 
Company Program 
SEC. 221. LOANS FOR PLANT ACQUISITION, CONSTRUCTION, CONVER-
SION, AND EXPANSION. 
Section 502 of the SmsQl Business Investment Act of 1958 
(15 U.S.C. 696) is amended— 
(1) by striking paragraph (1) and inserting the following: 
"(1) USE OF PROCEEDS.—^The proceeds of any such loan 
shall be used solely by the borrower to assist 1 or more identifi-
able small business concerns and for a sound business purpose 
approved by the Administration."; 
(2) in paragraph (3), by adding at the end the following: 
"(D) 
SELLER 
FINANCING.—Seller-provided 
financing 
may be used to meet the requirements of subparagraph 
(B), if the seller subordinates the interest of the seller 
in the property to the debenture guaranteed by the 
Administration. 
"(E) COLLATERALIZATION.—The collateral provided by 
the small business concern shall generally include a 
subordinate lien position on the property being financed 
under this title, and is only 1 of the factors to be evaluated 
in the credit determination. Additional collateral shall be 
required only if the Administration determines, on a case-
I l l STAT. 2604 
PUBLIC LAW 105-135—DEC. 2, 1997 
by-case basis, that additional security is necessary to pro-
tect the interest of the Grovemment."; and 
(3) by adding at the end the following: 
"(5) LIMITATION ON LEASING.—In addition to any portion 
of the project permitted to be leased under paragraph (4), 
not to exceed 20 percent of the project may be leased by the 
assisted small business to 1 or more other tenants, if the 
assisted small business occupies permanently and uses not 
less than a totsd of 60 percent of the space in the project 
after the execution of any leases authorized under this section.". 
SEC. 222. DEVELOPMENT COMPANY DEBENTURES. 
Section 503 of the Small Business Investment Act of 1958 
(15 U.S.C. 697) is amended— 
(1) in subsection (b)(7), by striking subparagraph (A) and 
inserting the following: 
"(A) assesses and collects a fee, which shall be payable 
by the borrower, in an amount established annually by 
the Administration, which amount shall not exceed the 
lesser of— 
"(i) 0.9375 percent per year of the outstanding 
balance of the loan; and 
"(ii) the minimum amount necessary to reduce the 
cost (as defined in section 502 of the Federal Credit 
Reform Act of 1990) to the Administration of purchas-
ing and guarginteeing debentures under this Act to 
zero; and"; and 
(2) in subsection (f), by striking "1997" and inserting "2000". 
SEC. 
2
2
3
. 
PREMIER 
CERTIFIED 
LENDERS 
PROGRAM. 
(a) IN GENERAL.—Section 508 of the Small Business Investment 
Act of 1958 (15 U.S.C. 697e) is amended— 
(1) in subsection (a), by striking "not more than 15"; 
(2) in subsection (b)— 
(A) in paragraph (2)— 
(i) in the matter preceding subparagraph (A), by 
striking "if such company"; 
(ii) by striking subparagraphs (A) and (B) and 
inserting the following: 
"(A) if the company is an active certified development 
compginy in good standing and has been an active partici-
pant in the accredited lenders program during the entire 
12-month period preceding the date on which the company 
submits an application under paragraph (1), except that 
the Administration may waive this requirement if the com-
pany is qualified to participate in the accredited lenders 
program; 
"(B) if the company has a history of— 
"(i) submitting to the Administration adequately 
analyzed debenture guarantee application packages; 
and 
"(ii) of properly closing section 504 loans and serv-
icing its loan portfolio;"; 
(iii) in subparagraph (C)— 
(I) by inserting "if the company after "(C)"; 
and 
(II) by striking the period at the end and 
inserting "; and"; and 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2605 
(iv) by adding at the end the following: 
"(D) the Administrator determines, with respect to the 
company, that the loss reserve established in accordance 
with subsection (c)(2) is sufficient for the company to meet 
its obligations to protect the Federal Grovernment from 
risk of loss."; and 
(B) by adding at the end the following: 
"(3) APPLICABILITY OF CRITERIA AFTER DESIGNATION.—The 
Administrator may revoke the designation of a certified develop-
ment company as a premier certified lender under this section 
at any time, if the Administrator determines that the certified 
development company does not meet any requirement described 
in subparagraphs (A) through (D) of paragraph (2)."; 
(3) by striking subsection (c) and inserting the following: 
"(c) Loss RESERVE.— 
"(1) ESTABLISHMENT.—^A company designated as a premier 
certified lender shall establish a loss reserve for 
financing 
approved pursuant to this section. 
"(2) AMOUNT.—^The amount of each loss reserve established 
under paragraph (1) shall be 10 percent of the amount of 
the company's exposure, as determined under subsection 
(b)(2)(C). 
"(3) ASSETS.—^Each loss reserve established under para-
graph (1) shall be comprised of— 
"(A) segregated funds on deposit in an account or 
accounts with a federally insured depository institution 
or institutions selected by the company, subject to a collat-
eral assignment in favor of, and in a format acceptable 
to, the Administration; 
"(B) irrevocable letter or letters of credit, with a collat-
eral assignment in favor of, and a commercially reasonable 
format acceptable to, the Administration; or 
"(C) any combination of the assets described in sub-
paragraphs (A) and (B). 
"(4) CONTRIBUTIONS.—^The company shall make contribu-
tions to the loss reserve, either cash or letters of credit as 
provided above, in the following amounts and at the following 
intervals: 
"(A) 50 percent when a debenture is closed. 
"(B) 25 percent additional not later than 1 year after 
a debenture is closed. 
"(C) 25 percent additional not later than 2 years after 
a debenture is closed. 
"(5) REPLENISHMENT.—If a loss has been sustained by the 
Administration, any portion of the loss reserve, and other funds 
provided by the premier company as necessary, may be used 
to reimburse the Administration for the premier company's 
10 percent share of the loss as provided in subsection (b)(2)(C). 
If the company utilizes the reserve, within 30 days it shall 
replace an equivalent amount of funds. 
"(6) DISBURSEMENTS.—^The Administration shall allow the 
certified development company to withdraw from the loss 
reserve amounts attributable to any debenture that has been 
repaid."; 
(4) in subsection (d)(1), by striking "to approve loans" and 
inserting "to approve, authorize, close, service, foreclose, litigate 
(except that the Administration may monitor the conduct of 
I l l STAT. 2606 
PUBLIC LAW 105-135—DEC. 2, 1997 
any such litigation to which a premier certified lender is a 
party), and liquidate loans"; 
(5) in subsection (f), by striking "State or local" and insert-
ing "certified"; 
(6) in subsection (g), by striking the subsection heading 
and inserting the following: 
"(g) EFFECT OF SUSPENSION OR REVOCATION.—"; 
(7) by striking subsection (h) and inserting the following: 
"(h) PROGRAM GOALS.—Each certified development company 
participating in the program under this section shall establish 
a goal of processing a minimum of not less than 50 percent of 
the loan applications for assistance under section 504 pursuant 
to the program authorized under this section."; and 
(8) in subsection (i), by striking "other lenders" and insert-
ing "other lenders, specifically comparing default rates and 
recovery rates on liquidations". 
(b) REGULATIONS.—The Administrator shall— 
(1) not later than 150 days after the date of enactment 
of this Act, promulgate regulations to carry out the amendments 
made by subsection (a); and 
(2) not later than 180 days sifter the date of enactment 
of this Act, issue program guidelines and fully implement the 
amendments made by subsection (a). 
(c) PROGRAM EXTENSION.—Section 217(b) of the Small Business 
Reauthorization and Amendments Act of 1994 (15 U.S.C. 697e 
note) is amended by striking "October 1, 1997" and inserting "Octo-
ber 1, 2000". 
Subtitle D—^Miscellaneous Provisions 
SEC. 231. BACKGROUND CHECK OF LOAN APPLICANTS. 
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
amended— 
(1) by striking "(a) The Administration" and inserting the 
following: 
"(a) LOANS TO SMALL BUSINESS CONCERNS; ALLOWABLE PUR-
POSES; QUALIFIED BUSINESS; RESTRICTIONS AND LIMITATIONS.—^The 
Administration"; and 
(2) in paragraph (1)— 
(A) by striking "(1) No financial" and inserting the 
following: 
"(1) IN GENERAL.— 
"(A) CREDIT ELSEWHERE.—^No financial"; and 
(B) by adding at the end the following: 
"(B) BACKGROUND CHECKS.—Prior to the approval of 
any loan made pursuant to this subsection, or section 503 
of the Small Business Investment Act of 1958, the Adminis-
trator may verify the applicant's criminal background, or 
lack thereof, through the best available means, including, 
if possible, use of the National Crime Information Center 
computer system at the Federal Bureau of Investigation.". 
SEC. 232. REPORT ON INCREASED LENDER APPROVAL, SERVICING, 
FORECLOSURE, LIQUIDATION, AND LITIGATION OF SEC-
TION 7(a) LOANS. 
(a) IN GENERAL.— 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2607 
(1) SUBMISSION.—Not later than 6 months after the date Reports. 
of enactment of this Act, the Administrator shall submit to 
the Committees a report on action taken and planned for future 
reliance on private sector lender resources to originate, approve, 
close, service, liquidate, foreclose, and litigate loans made under 
section 7(a) of the Small Business Act. 
(2) CONTENTS.—The report under this subsection shall 
address administrative and other steps necessary to achieve 
the results described in paragraph (1), including— 
(A) streamlining the process for approving lenders and 
standardizing requirements; 
(B) establishing uniform reporting requirements using 
on-line automated capabilities to the maximum extent fea-
sible; 
(C) reducing paperwork through automation, simplified 
forms, or incorporation of lender's forms; 
(D) providing uniform standards for approval, closing, 
servicing, foreclosure, and liquidation; 
(E) promulgating new regulations or amending existing 
ones; 
(F) establishing a timetable for implementing the plan 
for reliance on private sector lenders; 
(G) implementing organizational changes at SBA; and 
(H) estimating the annual savings that would occur 
as a result of implementation, 
(b) CONSULTATION.—In preparing the report under subsection 
(a), the Administrator shall consult with, among others— 
(1) borrowers and lenders imder section 7(a) of the Small 
Business Act; 
(2) small businesses that are potential program participants 
under section 7(a) of the Small Business Act; 
(3) financial institutions that are potential program lenders 
under section 7(a) of the Small Business Act; and 
(4) representative industry associations. 
SEC. 233. COMPLETION OF PLANNING FOR LOAN MONITORING SYS- 
15 USC 633 note. 
TEM. 
(a) IN GENERAL.—The Administrator shall perform and com-
plete the planning needed to serve as the basis for funding the 
development and implementation of the computerized loan monitor-
ing system, including— 
(1) fully defining the system requirement using on-line, 
automated capabilities to the extent feasible; 
(2) identifying all data inputs and outputs necessary for 
timely report generation; 
(3) benchmark loan monitoring business processes and sys-
tems against comparable industry processes and, if appropriate, 
simplify or redefine work processes based on these benchmarks; 
(4) determine data quality standards and control systems 
for ensuring information accuracy; 
(5) identify an acquisition strategy and work increments 
to completion; 
(6) analyze the benefits and costs of alternatives and use 
to demonstrate the advantage of the final project; 
(7) ensure that the proposed information system is consist-
ent with the agency's information architecture; and 
I l l STAT. 2608 
PUBLIC LAW 105-135—DEC. 2, 1997 
(8) estimate the cost to system completion, identifying the 
essential cost element, 
(b) REPORT.— 
(1) IN GENERAL.—On the date that is 6 months after the 
date of enactment of this Act, the Administrator shall submit 
a report on the progress of the Administrator in carrying out 
subsection (a) to— 
(A) the Committees; and 
(B) the Comptroller General of the United States. 
(2) EVALUATION.—^Not later than 28 days after receipt of 
the report under paragraph (1)(B), the Comptroller General 
of the United States shall— 
(A) prepare a written evaluation of the report for 
compliance with subsection (a); and 
(B) submit the evaluation to the Committees. 
(3) LIMITATION.—None of the funds provided for the pur-
chase of the loan monitoring system may be obligated or 
expended until 45 days after the date on which the Committees 
and the Comptroller General of the United States receive the 
report under paragraph (1). 
TITLE III—WOMEN'S BUSINESS 
ENTERPRISES 
SEC. 301. INTERAGENCY COMMITTEE PARTICIPATION. 
Section 403 of the Women's Business Ownership Act of 1988 
(15 U.S.C. 631 note) is amended— 
(1) in subsection (a)(2)(A)— 
(A) by striking "and Amendments Act of 1994" and 
inserting "Act of 1997"; and 
(B) by inserting before the final period ", and who 
shall report directly to the head of the agency on the 
status of the activities of the Interagency Committee"; 
(2) in subsection (a)(2)(B), by inserting before the final 
period the following: "and shall report directly to the Adminis-
trator on the status of the activities on the Interagency Commit-
tee and shall serve as the Interagency Committee Liaison to 
the National Women's Business Council established under sec-
tion 405"; and 
(3) in subsection (b), by striking "and Amendments Act 
of 1994" and inserting "Act of 1997". 
SEC. 302. REPORTS. 
Section 404 of the Women's Business Ownership Act of 1988 
(15 U.S.C. 631 note) is amended— 
(1) by inserting ", through the Small Business Administra-
tion," after "transmit"; 
(2) by striking paragraph (1) and redesignating paragraphs 
(2) through (4) as paragraphs (1) through (3), respectively; 
and 
(3) in paragraph (1), as redesignated, by inserting before 
the semicolon the following: ", including a verbatim report 
on the status of progress of the Interagency Committee in 
meeting its responsibilities and duties under section 402(a)". 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2609 
SEC. 303. COUNCIL DUTIES. 
Section 406 of the Women's Business Ownership Act of 1988 
(15 U.S.C. 631 note) is amended— 
(1) in subsection (c), by inserting after "Administrator" 
the following: "(through the Assistant Administrator of the 
Office of Women's Business Ownership)"; and 
(2) in subsection (d)— 
(A) in paragraph (4), by striking "and" at the end; 
(B) in paragraph (5), by striking the period at the 
end and inserting a semicolon; and 
(C) by adding at the end the following: 
"(6) not later than 90 days after the last day of each Reports, 
fiscal year, submit to the President and to the Committee 
on Small Business of the Senate and the Committee on Small 
Business of the House of Representatives, a report containing— 
"(A) a detailed description of the activities of the coun-
cil, including a status report on the Council's progress 
toward meeting its duties outlined in subsections (a) and 
(d) of section 406; 
"(B) the findings, conclusions, and recommendations 
of the Council; and 
"(C) the Council's recommendations for such legislation 
and administrative actions as the Council considers appro-
priate to promote the development of small business con-
cerns owned and controlled by women. 
"(e) FORM OF TRANSMITTAL.—^The information included in each 
report under subsection (d) that is described in subparagraphs 
(A) through (C) of subsection (d)(6), shall be reported verbatim, 
together with any separate additional, concurring, or dissenting 
views of the Administrator.". 
SEC. 304. COUNCIL MEMBERSHIP. 
Section 407 of the Women's Business Ownership Act of 1988 
(15 U.S.C. 631 note) is amended— 
(1) in subsection (a), by striking "and Amendments Act 
of 1994" and inserting "Act of 1997"; 
(2) in subsection (b)— 
(A) by striking "and Amendments Act of 1994" and 
inserting "Act of 1997"; 
(B) by inserting after "the Administrator shall" the 
following: ", after receiving the recommendations of the 
Chairman and the Ranking Member of the Committees 
on Small Business of the House of Representatives and 
the Senate,"; 
(C) by striking "9" and inserting "14"; 
(D) in paragraph (1), by striking "2" and inserting 
"4"; 
(E) in paragraph (2), by striking "2" and inserting 
"4"; and 
(F) in paragraph (3)— 
(i) by striking "5" and inserting "6"; 
(ii) by striking "national"; and 
(iii) by inserting ", including representatives of 
women's business center sites" before the period at 
the end; 
(3) in subsection (c), by inserting "(including both urban 
and rural areas)" after "geographic"; 
Ill STAT. 2610 
PUBLIC LAW 105-135—DEC. 2, 1997 
(4) by striking subsection (d) and inserting the following: 
"(d) TERMS.—Each member of the Council shall be appointed 
for a term of 3 years, except that, of the initial members appointed 
to the Council— 
"(1) 2 members appointed under subsection (b)(1) shall 
be appointed for a term of 1 year; 
"(2) 2 members appointed under subsection (b)(2) shall 
be appointed for a term of 1 year; and 
"(3) each member appointed under subsection (b)(3) shall 
be appointed for a term of 2 years."; and 
(5) by striking subsection (f) and inserting the following: 
"(f) VACANCIES.— 
"(1) IN GENERAL.—A vacancy on the Council shall be filled 
not later than 30 days after the date on which the vacancy 
occurs, in the manner in which the original appointment was 
made, and shall be subject to any conditions that applied to 
the original appointment. 
"(2) UNEXPIRED TERM.—^An individual chosen to fill a 
vacancy shall be appointed for the unexpired term of the mem-
ber replaced.". 
SEC. 305. AUTHORIZATION OF APPROPRIATIONS. 
Section 409 of the Women's Business Ownership Act of 1988 
(15 U.S.C. 631 note) is amended to read as follows: 
"SEC. 411. AUTHORIZATION OF APPROPRIATIONS. 
"(a) IN GENERAL.—^There is authorized to be appropriated to 
carry out this title $600,000, for each of fiscal years 1998 through 
2000, of which $200,000 shall be available in each fiscal year 
to carry out sections 409 and 410. 
"(b) BUDGET REVIEW.—'No amount made available under this 
section for any fiscal year may be obligated or expended by the 
Council before the date on which the Council reviews and approves 
the operating budget of the Council to carry out the responsibilities 
of the Council for that fiscal year.". 
SEC. 306. NATIONAL WOMEN'S BUSINESS COUNCIL PROCUREMENT 
PROJECT. 
The Women's Business Ownership Act of 1988 (15 U.S.C. 631 
note) is amended by inserting after section 408 the following: 
"SEC. 409. NATIONAL WOMEN'S BUSINESS COUNCIL PROCUREMENT 
PROJECT. 
"(a) FEDERAL PROCUREMENT STUDY.— 
"(1) IN GENERAL.—During the first fiscal year for which 
amounts are made available to carry out this section, the Coun-
cil shall conduct a study on the award of Federal prime con-
tracts and subcontracts to women-owned businesses, which 
study shall include— 
"(A) an analysis of data collected by Federal agencies 
on contract awards to women-owned businesses; 
"(B) a determination of the degree to which individual 
Federal agencies are in compliance with the 5 percent 
women-owned business procurement goal established by 
section 15(g)(1) of the Small Business Act (15 U.S.C. 
644(g)(1)); 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2611 
"(C) a determination of the types and amounts of Fed-
eral contracts characteristically awarded to women-owned 
businesses; and 
"(D) other relevant information relating to participation 
of women-owned businesses in Federal procurement. 
"(2) SUBMISSION OF RESULTS.—Not later than 12 months 
after initiating the study under paragraph (1), the Council 
shall submit to the Committees on Small Business of the House 
of Representatives and the Senate, and to the President, the 
results of the study conducted under psiragraph (1). 
"(b) BEST PRACTICES REPORT.—Not later than 18 months after 
initiating the study under subsection (a)(1), the Council shall submit 
to the Committees on Small Business of the House of Representa-
tives and the Senate, and to the President, a report, which shall 
include— 
"(1) an analysis of the most successful practices in attract-
ing women-owned businesses as prime contractors and sub-
contractors by— 
"(A) Federal agencies (as supported by findings from 
the study required under subsection (a)(1)) in Federal 
procurement awards; and 
"(B) the private sector; and 
"(2) recommendations for policy changes in Federal procure-
ment practices, including an increase in the Federal procure-
ment goal for women-owned businesses, in order to maximize 
the number of women-owned businesses performing Federal 
contracts. 
"(c) CONTRACT AUTHORITY.—In conducting any study or other 
research under this section, the Council may contract with 1 or 
more public or private entities.". 
SEC. 
307. 
STUDIES 
AND 
OTHER 
RESEARCH. 
The Women's Business Ownership Act of 1988 (15 U.S.C. 631 
note) is amended by inserting after section 409 (as added by section 
306 of this title) the following: 
"SEC. 
410. 
STUDIES 
AND 
OTHER 
RESEARCH. 
"(a) IN GENERAL.—^To the extent that it does not delay submis-
sion of the report under section 409(b), the Council may also conduct 
such studies and other research relating to the award of Federal 
prime contracts and subcontracts to women-owned businesses, or 
to issues relating to access to credit and investment capital by 
women entrepreneurs, as the Council determines to be appropriate. 
"(b) CONTRACT AUTHORITY.—In conducting any study or other 
research under this section, the Council may contract with 1 or 
more public or private entities.". 
SEC. 308. WOMEN'S BUSINESS CENTERS. 
(a) IN GENERAL.—Section 29 of the Small Business Act (15 
U.S.C. 656) is amended to read as follows: 
"SEC. 29. WOMEN'S BUSINESS CENTER PROGRAM. 
"(a) DEFINITIONS.—In this section— 
"(1) the term 'Assistant Administrator' means the Assistant 
Administrator of the Office of Women's Business Ownership 
established under subsection (g); 
Ill STAT. 2612 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(2) the term 'small business concern owned and controlled 
by women', either startup or existing, includes any small busi-
ness concern— 
"(A) that is not less than 51 percent owned by 1 or 
more women; and 
"(B) the management and daily business operations 
of which are controlled by 1 or more women; and 
"(3) the term 'women's business center site' means the 
location of— 
"(A) a women's business center; or 
"(B) 1 or more women's business centers, established 
in conjunction with another women's business center in 
another location within a State or region— 
"(i) that reach a distinct population that would 
otherwise not be served; 
"(ii) whose services are targeted to women; and 
"(iii) whose scope, function, and activities are simi-
lar to those of the primary women's business center 
or centers in conjunction with which it was established. 
"(b) AUTHORITY.—^The Administration may provide financial 
assistance to private organizations to conduct 5-year projects for 
the benefit of small business concerns owned and controlled by 
women. The projects shall provide— 
"(1) financial assistance, including training and counseling 
in how to apply for and secure business credit and investment 
capital, preparing and presenting financial statements, and 
managing cash flow smd other financial operations of a business 
concern; 
"(2) management assistance, including training and coun-
seling 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 counsel-
ing in identifying and segmenting domestic and international 
market opportunities, preparing and executing marketing 
plans, developing pricing strategies, locating contract opportuni-
ties, negotiating contracts, and utilizing varying public relations 
and advertising techniques. 
"(c) CONDITIONS OF PARTICIPATION.— 
"(1) NON-FEDERAL CONTRIBUTIONS.—^As a condition of 
receiving financial assistance authorized by this section, the 
recipient organization shall agree to obtain, after its application 
has been approved and notice of award has been issued, cash 
contributions from non-Federal sources as follows: 
"(A) in the first and second years, 1 non-Federal dollar 
for each 2 Federal dollars; 
"(B) in the third and fourth years, 1 non-Federal dollar 
for each Federal dollar; and 
"(C) in the fifth year, 2 non-Federal dollars for each 
Federal dollar. 
"(2) 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. 
"(3) FORM OF FEDERAL CONTRIBUTIONS.—^The financial 
assistance authorized pursuant to this section may be made 
by grant, contract, or cooperative agreement and may contain 
such provision, as necessary, to provide for payments in lump 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2613 
sum or installments, and in advance or by way of reimburse-
ment. The Administration 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 matching funds are obtained. 
"(4) 
FAILURE TO OBTAIN NON-FEDERAL FUNDING.—If 
any 
recipient of assistance fails to obtain the required non-Federal 
contribution during any project, it shall not be eligible there-
after for advance disbursements pursuant to paragraph (3) 
during the remainder of that project, or for any other project 
for which it is or may be funded by the Administration, and 
prior to approving assistance to such organization for any other 
projects, 
the Administration 
shall 
specifically 
determine 
whether the Administration believes that the recipient will 
be able to obtain the requisite non-Federal funding and enter 
a written finding setting forth the reasons for making such 
determination. 
"(d) CONTRACT AUTHORITY.—^A women's business center may 
enter into a contract with a Federal department or agency to 
provide specific assistance to women and other underserved small 
business concerns. Performance of such contract should not hinder 
the women's business centers in carrying out the terms of the 
grant received by the women's business centers from the Adminis-
tration. 
"(e) SUBMISSION OF 5-YEAR PLAN.—Each applicant organization 
initially shall submit a 5-year plan to the Administration on pro-
posed fundraising and training activities, and a recipient organiza-
tion may receive financial assistance under this program for a 
maximum of 5 years per women's business center site. 
"(f) CRITERIA.—^The Administration shall evaluate and rank 
applicants in accordance with predetermined selection criteria that 
shall be stated in terms of relative importance. Such criteria and 
their relative importance shall be made publicly available and 
stated in each solicitation for applications made by the Administra-
tion. The criteria shall include— 
"(1) the experience of the applicant in conducting programs 
or ongoing 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 economically disadvantaged; and 
"(4) the location for the women's business center site pro-
posed by the applicant. 
"(g) OFFICE OF WOMEN'S BUSINESS OWNERSHIP.— 
"(1) ESTABLISHMENT.—There is established within the 
Administration an Office of Women's Business Ownership, 
which shall be responsible for the administration of the 
Administration's programs for the development of women's 
business enterprises (as defined in section 408 of the Women's 
Business Ownership Act of 1988 (15 U.S.C. 631 note)). The 
Office of Women's Business Ownership shall be administered 
by an Assistant Administrator, who shall be appointed by the 
Administrator. 
"(2) ASSISTANT ADMINISTRATOR OF THE OFFICE OF WOMEN'S 
BUSINESS OWNERSHIP.— 
I l l STAT. 2614 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(A) 
QUALIFICATION.—The 
position 
of 
Assistant 
Administrator shall be a Senior Executive Service position 
under section 3132(a)(2) of title 5, United States Code. 
The Assistant Administrator shall serve as a noncareer 
appointee (as defined in section 3132(a)(7) of that title). 
"(B) RESPONSIBILITIES AND DUTIES.— 
"(i) RESPONSIBILITIES.—The responsibilities of the 
Assistant Administrator shall be to administer the pro-
grams and services of the Office of Women's Business 
Ownership established to assist women entrepreneurs 
in the areas of— 
"(I) starting and operating a small business; 
"(II) development of management and tech-
nical skills; 
"(III) seeking Federal procurement opportuni-
ties; and 
"(IV) increasing the opportunity for access to 
capital. 
"(ii) DUTIES.—^The Assistant Administrator shall— 
"(I) administer and manage the Women's Busi-
ness Center program; 
"(II) recommend the annual administrative 
and program budgets for the Office of Women's 
Business Ownership (including the budget for the 
Women's Business Center program); 
"(III) establish appropriate funding 
levels 
therefore; 
"(IV) review the annual budgets submitted by 
each applicant for the Women's Business Center 
program; 
"(V) select applicants to participate in the pro-
gram under this section; 
"(VI) implement this section; 
"(VII) maintain a clearinghouse to provide for 
the dissemination and exchange of information 
between women's business centers; 
"(VIII) serve as the vice chairperson of the 
Interagency Committee on Women's 
Business 
Enterprise; 
"(IX) serve as liaison for the National Women's 
Business Council; and 
"(X) advise the Administrator on appointments 
to the Women's Business Council. 
"(C) CONSULTATION REQUIREMENTS.—In carrying out 
the responsibilities and duties described in this paragraph, 
the Assistant Administrator shall confer with and seek 
the advice of the Administration officials in areas served 
by the women's business centers. 
"(h) PROGRAM EXAMINATION.— 
"(1) IN GENERAL.—^Not later than 180 days after the date 
of enactment of the Small Business Reauthorization Act of 
1997, the Administrator shall develop and implement an annual 
programmatic and financial examination of each women's busi-
ness center established pursuant to this section. 
"(2) EXTENSION OF CONTRACTS.—In extending or renewing 
a contract with a women's business center, the Administrator 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2615 
shall consider the results of the examination conducted under 
paragraph (1). 
"(i) CONTRACT AUTHORITY.—^The authority of the Administrator 
to enter into contracts shall be in effect for each fiscal year only 
to the extent and in the amounts as are provided in advance 
in appropriations Acts. After the Administrator has entered into 
a contract, either as a grant or a cooperative agreement, with 
any applicant under this section, it shall not suspend, terminate, 
or fail to renew or extend any such contract unless the Adminis-
trator provides the applicant with written notification setting forth 
the reasons therefore and affords the applicant an opportunity 
for a hearing, appeal, or other administrative proceeding under 
chapter 5 of title 5, United States Code. 
"(j) REPORT.—^The Administrator shall prepare and submit an 
annual report to the Committees on Small Business of the House 
of Representatives and the Senate on the effectiveness of all projects 
conducted under the authority of this section. Such report shall 
provide information concerning— 
"(1) the number of individuals receiving assistance; 
"(2) the number of startup business concerns formed; 
"(3) the gross receipts of assisted concerns; 
"(4) increases or decreases in profits of assisted concerns; 
and 
"(5) the employment increases or decreases of assisted con-
cerns. 
"(k) AUTHORIZATION OF APPROPRIATIONS.— 
"(1) IN GENERAL.—^There is authorized to be appropriated 
$8,000,000 for each fiscal year to carry out the projects author-
ized under this section, of which, for fiscal year 1998, not 
more than 5 percent may be used for administrative expenses 
related to the program under this section. 
"(2) USE OF AMOUNTS.—^Amounts made available under 
this subsection for fiscal year 1999, and each fiscal year there-
after, may only be used for grant awards and may not be 
used for costs incurred by the Administration in connection 
with the management and administration of the program under 
this section. 
"(3) EXPEDITED ACQUISITION,—Notwithstanding any other 
provision of law, the Administrator, acting through the Assist-
ant Administrator, may use such expedited acquisition methods 
as the Administrator determines to be appropriate to carry 
out this section, except that the Administrator shall ensure 
that all small business sources are provided a reasonable oppor-
tunity to submit proposals.". 
(b) APPLICABILITY.— 
15 use 656 note. 
(1) IN GENERAL.—Subject to paragraph (2), any organization 
conducting a 3-year project under section 29 of the Small Busi-
ness Act (15 U.S.C. 656) (as in effect on the day before the 
effective date of this Act) on September 30, 1997, may request 
an extension of the term of that project to a total term of 
5 years. If such an extension is made, the organization shall 
receive financial assistance in accordance with section 29(c) 
of the Small Business Act (as amended by this section) subject 
to procedures established by the Administrator, in coordination 
with the Assistant Administrator of the Office of Women's 
Business Ownership established under section 29 of the Small 
Business Act (15 U.S.C. 656) (as amended by this section). 
I l l STAT. 2616 
PUBLIC LAW 105-135—DEC. 2, 1997 
(2) TERMS OF ASSISTANCE FOR CERTAIN ORGANIZATIONS.— 
Any organization operating in the third year of a 3-year project 
under section 29 of the Small Business Act (15 U.S.C. 656) 
(as in effect on the day before the effective date of this Act) 
on September 30, 1997, may request an extension of the term 
of that project to a total term of 5 years. If such an extension 
is made, during the fourth and fifth years of the project, the 
organization shall receive financial assistance in accordance 
with section 29(c)(1)(C) of the Small Business Act (as amended 
by this section) subject to procedures established by the 
Administrator, in coordination with the Assistant Administrator 
of the Office of Women's Business Ownership established under 
section 29 of the Small Business Act (15 U.S.C. 656) (as amend-
ed by this section). 
TITLE 
IV—COMPETITIVENESS 
PRO-
GRAM AND PROCUREMENT OPPORTU-
NITIES 
Subtitle A—Small Business 
Competitiveness Program 
SEC. 401. PROGRAM TERM. 
Section 711(c) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note) is amended 
by striking ", and terminate on September 30, 1997". 
SEC. 402. MONITORING AGENCY PERFORMANCE. 
Section 712(d)(1) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note) is amended 
to read as follows: 
"(1) Participating agencies shall monitor the attainment 
of their small business participation goals on an annual basis. 
An annual review by each participating agency shall be com-
pleted not later than January 31 of each year, based on the 
data for the preceding fiscal year, from October 1 through 
September 30.". 
SEC. 403. REPORTS TO CONGRESS. 
Section 716(a) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note) is amended— 
(1) by striking "1996" and inserting "2000"; 
(2) by striking "for Federal Procurement Policy" and insert-
ing "of the Small Business Administration"; and 
(3) by striking "Grovemment Operations" and inserting 
"Government Reform and Oversight". 
SEC. 404. SMALL BUSINESS PARTICIPATION IN DREDGING. 
Section 722(a) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note) is amended 
by striking "and terminating on September 30,1997". 
SEC. 405. TECHNICAL AMENDMENTS. 
Section 717 of the Small Business Competitiveness Demonstra-
tion Program Act of 1988 (15 U.S.C. 644 note) is sunended— 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2617 
(1) by inserting "or North American Industrial Classifica-
tion Code" after "standard industrial classification code" each 
place it appears; and 
(2) by inserting "or North American Industrial Classifica-
tion Codes" afi;er "standard industrial classification codes" each 
place it appears. 
Subtitle B—Small Business Procurement 
Opportunities Program 
SEC. 411. CONTRACT BUNDLING. 
Section 2 of the Small Business Act (15 U.S.C. 631) is amended 
by adding at the end the following: 
"(j) CONTRACT BUNDLING.—In complying with the statement 
of congressional policy expressed in subsection (a), relating to foster-
ing the participation of small business concerns in the contracting 
opportunities of the Government, each Federal agency, to the maxi-
mum extent practicable, shall— 
"(1) comply with congressional intent to foster the participa-
tion of small business concerns as prime contractors, sub-
contractors, and suppliers; 
"(2) structure its contracting requirements to facilitate com-
petition by and among small business concerns, taking all 
reasonable steps to eliminate obstacles to their participation; 
and 
"(3) avoid unnecessary and unjustified bundling of contract 
requirements that precludes small business participation in 
procurements as prime contractors.". 
SEC. 412. DEFINITION OF CONTRACT BUNDLING. 
Section 3 of the Small Business Act (15 U.S.C. 632) is amended 
by adding at the end the following: 
"(o) DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS 
AND RELATED TERMS.—In this Act: 
"(1) BUNDLED CONTRACT.—The term ^bundled contract' 
means a contract that is entered into to meet requirements 
that are consolidated in a bundling of contract requirements. 
"(2) BUNDLING OF CONTRACT REQUIREMENTS.—^The term 
Tsundling of contract requirements' means consolidating 2 or 
more procurement requirements for goods or services previously 
provided or performed under separate smaller contracts into 
a solicitation of offers for a single contract that is likely to 
be unsuitable for award to a small-business concern due to— 
"(A) the diversity, size, or specialized nature of the 
elements of the performance specified; 
"(B) the aggregate doUsir value of the anticipated 
award; 
"(C) the geographical dispersion of the contract 
performance sites; or 
"(D) any combination of the factors described in sub-
paragraphs (A), (B), and (C). 
"(3) SEPARATE SMALLER CONTRACT.—The term 'separate 
smaller contract', with respect to a bundling of contract require-
ments, means a contract that has been performed by 1 or 
more small business concerns or was suitable for aw£ird to 
1 or more small business concerns.". 
I l l STAT. 2618 
PUBLIC LAW 105-135—DEC. 2, 1997 
SEC. 413. ASSESSING PROPOSED CONTRACT BUNDLING. 
(a) IN GENERAL.—Section 15 of the Small Business Act (15 
U.S.C. 644) is amended by inserting after subsection (d) the follow-
ing: 
"(e) PROCUREMENT STRATEGIES; CONTRACT BUNDLING.— 
"(1) IN GENERAL.—^To the maximum extent practicable, 
procurement strategies used by the various agencies having 
contracting authority shall facilitate the maximum participation 
of small business concerns as prime contractors, subcontractors, 
and suppliers. 
"(2) MARKET RESEARCH.— 
"(A) IN GENERAL.—Before proceeding with an acquisi-
tion strategy that could lead to a contract containing 
consolidated procurement requirements, the head of an 
agency shall conduct market research to determine whether 
consolidation of the requirements is necessary and justified. 
"(B) FACTORS.—For purposes of subparagraph (A), 
consolidation of the requirements may be determined as 
being necessary and justified if, as compared to the benefits 
that would be derived from contracting to meet those 
requirements if not consolidated, the Federal Government 
would derive from the consolidation measurably substantial 
benefits, including any combination of benefits that, in 
combination, 
are 
measurably 
substantial. 
Benefits 
described in the preceding sentence may include the follow-
ing: 
"(i) Cost savings, 
"(ii) Quality improvements, 
"(iii) Reduction in acquisition cycle times, 
"(iv) Better terms and conditions, 
"(v) Any other benefits. 
"(C) REDUCTION OF COSTS NOT DETERMINATIVE.—^The 
reduction of administrative or personnel costs alone shall 
not be a justification for bundling of contract requirements 
unless the cost savings are expected to be substantial in 
relation to the dollar value of the procurement require-
ments to be consolidated. 
"(3) STRATEGY SPECIFICATIONS.—If the head of a contracting 
agency determines that a proposed procurement strategy for 
a procurement involves a substantial bundling of contract 
requirements, the proposed procurement strategy shall— 
"(A) identify specifically the benefits anticipated to be 
derived from the bundling of contract requirements; 
"(B) set forth an assessment of the specific impedi-
ments to participation by small business concerns as prime 
contractors that result from the bundling of contract 
requirements and specify actions designed to maximize 
small business participation as subcontractors (including 
suppliers) at various tiers under the contract or contracts 
that are awarded to meet the requirements; and 
"(C) include a specific determination that the antici-
pated benefits of the proposed bundled contract justify its 
use. 
"(4) CONTRACT TEAMING.—In the case of a solicitation of 
offers for a bundled contract that is issued by the head of 
an agency, a small-business concern may submit an offer that 
provides for use of a particular team of subcontractors for 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2619 
the performance of the contract. The head of the agency shall 
evaluate the offer in the same manner as other offers, with 
due consideration to the capabilities of all of the proposed 
subcontractors. If a small business concern teams under this 
paragraph, it shall not affect its status as a smsdl business 
concern for any other purpose.". 
(b) ADMINISTRATION REVIEW.—Section 15(a) of the Small Busi-
ness Act (15 U.S.C. 644(a)) is amended in the third sentence— 
(1) by inserting "or the solicitation involves an unnecessary 
or unjustified bundling of contract requirements, as determined 
by the Administration," after "discrete construction projects,"; 
(2) by striking "or (4)" and inserting "(4)"; and 
(3) by inserting before the period at the end of the sentence 
the following: ", or (5) why the agency has determined that 
the bundled contract (as defined in section 3(o)) is necessary 
and justified". 
(c) RESPONSIBILITIES OF AGENCY 
SMALL 
BUSINESS 
ADVO-
CATES.—Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) 
is amended— 
(1) by redesignating paragraphs (5) through (9) as para-
graphs (6) through (10), respectively; and 
(2) by inserting after paragraph (4) the following: 
"(5) identify proposed solicitations that involve significant 
bundling of contract requirements, and work with the agency 
acquisition officials and the Administration to revise the 
procurement strategies for such proposed solicitations where 
appropriate to increase the probability of participation by small 
businesses as prime contractors, or to facilitate small business 
participation as subcontractors and suppliers, if a solicitation 
for a bundled contract is to be issued;". 
SEC. 414. REPORTING OF BUNDLED CONTRACT OPPORTUNITIES. 
41USC 405 note. 
(a) DATA COLLECTION REQUIRED.—^The Federal Procurement 
Data System described in section 6(d)(4)(A) of the Office of Federal 
Procurement PoUcy Act (41 U.S.C. 405(d)(4)(A)) shall be modified 
to collect data regarding bundling of contract requirements when 
the contracting officer anticipates that the resulting contract price, 
including all options, is expected to exceed $5,000,000. The data 
shall reflect a determination made by the contracting officer regard-
ing whether a particular solicitation constitutes a contract bundling. 
(b) DEFINITIONS.—In this section, the term "bundling of contract 
requirements" has the meaning given that term in section 3(o) 
of the Small Business Act (15 U.S.C. 632(o)) (as added by section 
412 of this subtitle). 
SEC. 415. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING 
CONTRACTS. 
Section 8(d)(4) of the Small Business Act (15 U.S.C. 637(d)(4)) 
is amended by adding at the end the following: 
"(G) The following factors shall be designated by the Fed-
eral agency as significant factors for purposes of evaluating 
offers for a bundled contract where the head of the agency 
determines that the contract offers a significant opportunity 
for subcontracting: 
"(i) A factor that is based on the rate provided under 
the subcontracting plan for small business participation 
in the performance of the contract. 
I l l STAT. 2620 
PUBLIC LAW 105-135—DEC. 2, 1997 
15 use 637 note. 
Publication. 
15 use 631 note. 
Effective date. 
"(ii) For the evaluation of past performance of an 
offeror, a factor that is based on the extent to which the 
offeror attained applicable goals for small business partici-
pation in the performance of contracts.". 
SEC. 416. IMPROVED NOTICE OF SUBCONTRACTING 
OPPORTUNITIES. 
(a) USE OF THE COMMERCE BUSINESS DAILY AUTHORIZED.— 
Section 8 of the Small Business Act (15 U.S.C. 637) is amended 
by adding at the end the following: 
"(k) NOTICES OF SUBCONTRACTING OPPORTUNITIES.— 
"(1) IN GENERAL.—Notices of subcontracting opportunities 
may be submitted for publication in the Commerce Business 
Daily by— 
"(A) a business concern awarded a contract by an 
executive agency subject to subsection (e)(1)(C); and 
"(B) a business concern that is a subcontractor or sup-
plier (at any tier) to such contractor having a subcontract-
ing opportunity in excess of $10,000. 
"(2) CONTENT OF NOTICE.—^The notice of a subcontracting 
opportunity shall include— 
"(A) a description of the business opportunity that 
is comparable to the description specified in paragraphs 
(1), (2), (3), and (4) of subsection (f); and 
"(B) the due date for receipt of offers.". 
(b) REGULATIONS REQUIRED.—The Federal Acquisition Regula-
tion shall be amended to provide uniform implementation of the 
amendments made by this section. 
(c) CONFORMING AMENDMENT.—Section 8(e)(1)(C) of the Small 
Business Act (15 U.S.C. 637(e)(1)(C)) is amended by striking 
"$25,000" each place that term appears and inserting "$100,000". 
SEC. 417. DEADLINES FOR ISSUANCE OF REGULATIONS. 
(a) PROPOSED REGULATIONS.—Proposed amendments to the 
Federal Acquisition 
Regulation or proposed 
Small 
Business 
Administration regulations under this subtitle and the amendments 
made by this subtitle shall be published not later than 120 days 
after the date of enactment of this Act for the purpose of obtaining 
public comment pursuant to section 22 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 418b), or chapter 5 of title 
5, United States Code, as appropriate. The public shall be afforded 
not less than 60 days to submit comments. 
(b) FINAL REGULATIONS.—^Final regulations shall be published 
not later than 270 days after the date of enactment of this Act. 
The effective date for such final regulations shall be not less than 
30 days after the date of publication. 
TITLE V—MISCELLANEOUS PROVISIONS 
SEC. 501. SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM. 
(a) REQUIRED EXPENDITURES.—Section 9(n) of the Small Busi-
ness Act (15 U.S.C. 638(n)) is amended by striking paragraph 
(1) and inserting the following: 
"(1) REQUIRED EXPENDITURE AMOUNTS.—^With respect to 
fiscal years 1998, 1999, 2000, and 2001, each Federal agency 
that has an extramural budget for research, or research and 
development, in excess of $1,000,000,000 for that fiscal year, 
is authorized to expend with small business concerns not less 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2621 
than 0.15 percent of that extramural budget specifically in 
connection with STTR programs that meet the requirements 
of this section and any policy directives and regulations issued 
under this section.", 
(b) REPORTS AND OUTREACH.— 
(1) IN GENERAL.—Section 9 of the Small Business Act (15 
U.S.C. 638) is amended— 
(A) in subsection (o)— 
(i) by redesignating paragraphs (8) through (11) 
as paragraphs (10) through (13), respectively; and 
(ii) by inserting after paragraph (7) the following: 
"(8) include, as part of its annual performance plan as 
required by subsections (a) and (b) of section 1115 of title 
31, United States Code, a section on its STTR program, and 
shall submit such 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 data from awardees as is necessary to 
assess STTR program outputs and outcomes;"; 
(B) in subsection (e)(4)(A), by striking "(ii)"; and 
(C) by adding at the end the following: 
"(s) OUTREACH.— 
"(1) DEFINITION OF ELIGIBLE STATE.—^In this subsection, 
the term 'eligible State' means a State— 
"(A) if the total value of contracts awarded to the 
State during fiscal year 1995 under this section was less 
than $5,000,000; and 
"(B) that certifies to the Administration described in 
paragraph (2) that the State will, upon receipt of assistance 
under this subsection, provide matching funds from non-
Federal sources in an amount that is not less than 50 
percent of the amount provided under this subsection. 
"(2) PROGRAM AUTHORITY.—Of amounts made available to 
carry out this section for fiscal year 1998, 1999, 2000, or 2001 
the Administrator may expend with eligible States not more 
than $2,000,000 in each such fiscal year in order to increase 
the participation of small business concerns located in those 
States in the programs under this section. 
"(3) AMOUNT OF ASSISTANCE.—^The amount of assistance 
provided to an eligible State under this subsection in any 
fiscsd year— 
"(A) shall be equal to twice the total amount of match-
ing funds from non-Federal sources provided by the State; 
and 
"(B) shall not exceed $100,000. 
"(4) USE OF ASSISTANCE.—^Assistance provided to an eligible 
State under this subsection shall be used by the State, in 
consultation with State and local departments and agencies, 
for programs and activities to increase the participation of 
small business concerns located in the State in the programs 
under this section, including— 
"(A) the establishment of quantifiable performance 
goals, including goals relating to— 
"(i) the number of program awards under this sec-
tion made to small business concerns in the State; 
and 
I l l STAT. 2622 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(ii) the total amount of Federal research and 
development contracts awarded to small business con-
cerns in the State; 
"(B) the provision of competition outreach support to 
small business concerns in the State that are involved 
in research and development; and 
"(C) the development and dissemination of educational 
and promotional information relating to the programs 
under this section to small business concerns in the State, 
"(t) INCLUSION IN STRATEGIC PLANS.—Program information 
relating to the SBIR and STTR programs shall be included by 
each Federal agency in any update or revision required of the 
Federal agency under section 306(b) of title 5, United States Code.". 
Effective date. 
(2) REPEAL.—Effective October 1, 2001, section 9(s) of the 
Small Business Act (as added by paragraph (1) of this sub-
section) is repealed. 
SEC. 502. SMALL BUSINESS DEVELOPMENT CENTERS. 
(a) IN GENERAL.—Section 21(a) of the Small Business Act (15 
U.S.C. 648(a)) is amended— 
(1) in paragraph (1)— 
(A) by inserting "any women's business center operat-
ing pursuant to section 29," after "credit or finance corpora-
tion,"; 
(B) by inserting "or a women's business center operat-
ing pursuant to section 29" after "other than an institution 
of higher education"; and 
(C) by inserting "£ind women's business centers operat-
ing pursuant to section 29" after "utilize institutions of 
higher education"; 
(2) in paragraph (3)— 
(A) by striking ", but with" and all that follows through 
"parties." and inserting the following: "for the delivery of 
programs and services to the small business community. 
Such programs and services shall be jointly developed, 
negotiated, and agreed upon, with full participation of both 
parties, pursuant to an executed cooperative agreement 
between the Small Business Development Center applicant 
and the Administration."; and 
(B) by adding at the end the following: 
"(C) On £in annual basis, the Small Business Development 
Center shall review and coordinate public and private partner-
ships and cosponsorships with the Administration for the pur-
pose of more efficiently leveraging available resources on a 
National and a State basis."; 
(3) in paragraph (4)(C)--
(A) by striking clause (i) and inserting the following: 
"(i) IN GENERAL.— 
"(I) GRANT AMOUNT.—Subject to subclauses (II) 
and (III), the amount of a grant received by a State 
under this section shall be equal to the greater of 
$500,000, or the sum of— 
"(aa) the State's pro rata share of the national 
program, based upon the population of the State 
as compared to the total population of the United 
States; and 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2623 
"(bb) $300,000 in fiscal year 1998, $400,000 
in fiscal year 1999, and $500,000 in each fiscal 
year thereafter. 
"(11) PRO RATA REDUCTIONS.—If the amount made 
available to carry out this section for any fiscal year 
is insufficient to carry out subclause (I)(bb), the 
Administration shall make pro rata reductions in the 
amounts otherwise payable to States under subclause 
(IXbb). 
"(Ill) MATCHING REQUIREMENT.—The amount of a 
grant received by a State under this section shall not 
exceed the amount of matching funds from sources 
other than the Federal Government provided by the 
State under subparagraph (A)."; and 
(B) in clause (iii), by striking "(iii)" and gdl that follows 
through "1997." and inserting the following: 
"(iii) NATIONAL PROGRAM.—^There are authorized to be 
appropriated to carry out the national program under this 
section— 
"(I) $85,000,000 for fiscal year 1998; 
"(II) $90,000,000 for fiscal year 1999; and 
"(III) $95,000,000 for fiscal year 2000 and each 
fiscal year thereafter."; and 
(4) in paragraph (6)— 
(A) in subparagraph (A), by striking "and" at the end; 
(B) in subparagraph (B), by striking the comma at 
the end and inserting "; and"; and 
(C) inserting after subparagraph (B) the following: 
"(C) with 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 communities impacted 
by base closings or military or corporate downsizing, or 
in rural or underserved communities;", 
(b) SBDC SERVICES.—Section 21(c) of the Small Business Act 
(15 U.S.C. 648(c)) is amended— 
(1) in paragraph (3)— 
(A) in subparagraph (A), by striking "businesses;" and 
inserting "businesses, including— 
"(i) working with individuals to increase awareness 
of basic credit practices and credit requirements; 
"(ii) working with individuals to develop business 
plans, financial packages, credit applications, and contract 
proposals; 
"(iii) working with the Administration to develop and 
provide informational tools for use in working with individ-
uals on pre-business startup planning, existing business 
expansion, and export planning; and 
"(iv) working with individuals referred by the local 
offices of the Administration and Administration participat-
ing lenders;"; 
(B) in each of subparagraphs (B), (C), (D), (E), (F), 
(G), (M), (N), (O), (Q), and (R) by moving each margin 
2 ems to the left; £ind 
(C) in subparagraph (C), by inserting "and the Adminis-
tration" after "Center"; 
I l l STAT. 2624 
PUBLIC LAW 105-135—DEC. 2, 1997 
(2) in paragraph (5)— 
(A) by moving the margin 2 ems to the right; 
(B) by striking "paragraph (a)(1)" and inserting "sub-
section (a)(1)"; 
(C) by striking "which ever" and inserting "whichever"; 
and 
(D) by striking "last,," and inserting "last,"; 
(3) by redesignating paragraphs (4) through (7) as para-
graphs (5) through (8), respectively; and 
(4) in paragraph (3), in the undesignated material following 
subparagraph (R), by striking "A small" and inserting the fol-
lowing: 
"(4) A small". 
(c) COMPETITIVE AWARDS.—Section 21(1) of the Small Business 
Act (15 U.S.C. 648(1)) is amended by adding at the end the following: 
"If any contract or cooperative agreement under this section with 
an entity that is covered by this section is not renewed or extended, 
any award of a successor contract or cooperative agreement under 
this section to another entity shall be made on a competitive basis.". 
(d) PROHIBITION ON CERTAIN FEES.—Section 21 of the Small 
Business Act (15 U.S.C. 648) is amended by adding at the end 
the following: 
"(m) PROHIBITION ON CERTAIN F E E S . ^ A small business develop-
ment center shall not impose or otherwise collect a fee or other 
compensation in connection with the provision of counseling services 
under this section.". 
SEC. 503. PILOT PREFERRED SURETY BOND GUARANTEE PROGRAM 
EXTENSION. 
Section 207 of the Small Business Administration Reauthoriza-
tion and Amendment Act of 1988 (15 U.S.C. 694b note) is amended 
by striking "September 30, 1997" and inserting "September 30, 
2000". 
SEC. 504. EXTENSION OF C O S P O N S O R S H I P AUTHORITY. 
Section 
401(a)(2) of the 
Small Business 
Administration 
Reauthorization and Amendments Act of 1994 (15 U.S.C. 637 note) 
is amended by striking "September 30, 1997" and inserting "Septem-
ber 30, 2000". 
15 u s e 634 note. 
SEC. 505. ASSET SALES. 
In connection with the Administration's implementation of a 
program to sell to the private sector loans and other assets held 
by the Administration, the Administration shall provide to the 
Committees a copy of the draft and final plans describing the 
sale and the anticipated benefits resulting from such sale. 
SEC. 506. SMALL BUSINESS EXPORT PROMOTION. 
(a) IN GENERAL.—Section 21(c)(3) of the Small Business Act 
(15 U.S.C. 648(c)(3)) is amended— 
(1) in subparagraph (Q), by striking "and" at the end; 
(2) in subparagraph (R), by striking the period at the 
end and inserting "; and"; and 
(3) by inserting after subparagraph (R) the following: 
"(S) providing small business owners with access to a wide 
variety of export-related information by establishing on-line 
computer linkages between small business development centers 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2625 
and an international trade data information network with ties 
to the Export Assistance Center program.". 
(b) AUTHORIZATION OF APPROPRIATIONS.—^There is authorized 
to be appropriated to carry out section 21(c)(3)(S) of the Small 
Business Act (15 U.S.C. 648(c)(3)(S)), as added by this section, 
$1,500,000 for each fiscal years 1998 and 1999. 
SEC. 507. DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM. 
15 USC 636 note. 
(a) DELTA PROGRAM AUTHORIZED.— 
(1) IN GENERAL.—^The Administrator may administer the 
Defense Loan and Technical Assistsmce program in accordance 
with the authority and requirements of this section. 
(2) EXPIRATION OF AUTHORITY.—^The authority of the 
Administrator to carry out the DELTA program under para-
graph (1) shall terminate when the funds referred to in sub-
section (g)(1) have been expended. 
(3) DELTA PROGRAM DEFINED.—In this section, the terms 
"Defense Loan and Technical Assistsince program" and "DELTA 
program" mean the Defense Loan and Technical Assistance 
program that has been established by a memorandum of under-
standing entered into by the Administrator and the Secretary 
of Defense on June 26, 1995. 
(b) ASSISTANCE,— 
(1) AUTHORITY.—^Under the DELTA program, the Adminis-
trator may assist small business concerns that are economically 
dependent on defense expenditures to acquire dual-use capabili-
ties. 
(2) FORMS OF ASSISTANCE.—^Forms of assistance authorized 
under paragraph (1) are as follows: 
(A) LOAN GUARANTEES.—Loan guarantees under the 
terms and conditions specified under this section and other 
applicable law. 
(B) NONFINANCIAL ASSISTANCE.—Other forms of assist-
ance that are not financial. 
(c) ADMINISTRATION OF PROGRAM.—In the administration of 
the DELTA program under this section, the Administrator shall— 
(1) process applications for DELTA program loan guaran-
tees; 
(2) guarantee repayment of the resulting loans in accord-
ance with this section; and 
(3) t£ike such other actions as are necessary to administer 
the program. 
(d) SELECTION AND ELIGIBILITY REQUIREMENTS FOR DELTA 
LOAN GUARANTEES.— 
(1) IN GENERAL.—^The selection criteria and eligibility 
requirements set forth in this subsection shall be applied in 
the selection of small business concerns to receive loan guaran-
tees under the DELTA program. 
(2) SELECTION CRITERIA.—^The criteria used for the selection 
of a small business concern to receive a loan guarantee under 
this section are as follows: 
(A) The selection criteria established under the memo-
randum of understanding referred to in subsection (a)(3). 
(B) The extent to which the loans to be guEiranteed 
would support the retention of defense workers whose 
employment would otherwise be permanently or tempo-
rarily terminated as a result of reductions in expenditures 
I l l STAT. 2626 
PUBLIC LAW 105-135—DEC. 2, 1997 
by the United States for defense, the termination or can-
cellation of a defense contract, the failure to proceed with 
an approved major weapon system, the merger or consolida-
tion of the operations of a defense contractor, or the closure 
or realignment of a military installation. 
(C) The extent to which the loans to be guaranteed 
would stimulate job creation and new economic activities 
in communities most adversely affected by reductions in 
expenditures by the United States for defense, the termi-
nation or cancellation of a defense contract, the failure 
to proceed with an approved major weapon system, the 
merger or consolidation of the operations of a defense con-
tractor, or the closure or realignment of a military installa-
tion. 
(D) The extent to which the loans to be guaranteed 
would be used to acquire (or permit the use of other funds 
to acquire) capital equipment to modernize or expand the 
facilities of the borrower to enable the borrower to remain 
in the national technology and industrial base available 
to the Department of Defense. 
(3) ELIGIBILITY REQUIREMENTS.—^To be eligible for a loan 
guarantee under the DELTA program, a borrower must dem-
onstrate to the satisfaction of the Administrator that, during 
any 1 of the 5 preceding operating years of the borrower, 
not less than 25 percent of the value of the borrower's sales 
were derived from— 
(A) contracts with the Department of Defense or the 
defense-related activities of the Department of Energy; or 
(B) subcontracts in support of defense-related prime 
contracts. 
(e) MAXIMUM AMOUNT OF LOAN PRINCIPAL.—^With respect to 
each borrower, the maximum amount of loan principal for which 
the Administrator may provide a guarantee under this section 
during a fiscal year may not exceed $1,250,000. 
(0 LOAN GUARANTY RATE.—The maximum allowable guarantee 
percentage for loans guaranteed under this section may not exceed 
80 percent. 
(g) FUNDING.— 
(1) IN GENERAL.—^The funds that have been made available 
for loan guarantees under the DELTA program and have been 
transferred from the Department of Defense to the Small Busi-
ness Administration before the date of the enactment of this 
Act shall be used for carrying out the DELTA program under 
this section. 
(2) 
CONTINUED AVAILABILITY OF EXISTING FUNDS.—The 
funds made available under the second proviso under the head-
ing 
"RESEARCH, 
DEVELOPMENT, 
TEST 
AND 
EVALUATION, 
DEFENSE-WIDE" in Pubhc Law 103-335 (108 Stat. 2613) shall 
be available until expended— 
(A) to cover the costs (as defined in section 502(5) 
of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) 
of loan guarantees issued under this section; and 
(B) to cover the reasonable costs of the administration 
of the loan guarantees. 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2627 
SEC. 508. VERY SMALL BUSINESS CONCERNS. 
Section 304(i) of the Small Business Administration Reauthor-
ization and Amendments Act of 1994 (15 U.S.C. 644 note) is amend-
ed by striking "September 30, 1998" and inserting "September 
30, 2000". 
SEC. 509. TRADE ASSISTANCE PROGRAM FOR SMALL BUSINESS CON- 
15 USC 636 note. 
CERNS ADVERSELY AFFECTED BY NAFTA. 
The Administrator shall coordinate Federal assistsmce in order 
to provide counseling to small business concerns adversely affected 
by the North American Free Trade Agreement. 
TITLE VI—HUBZONE PROGRAM 
HUBZone Act of 
1997. 
SEC. 601. SHORT TITLE. 
15 USC 631 note. 
This title may be cited as the "HUBZone Act of 1997". 
SEC. 602. fflSTORICALLY UNDERUTILIZED BUSINESS ZONES. 
(a) DEFiNiTioriS.—Section 3 of the Small Business Act (15 
U.S.C. 632) (as amended by section 412 of this Act) is amended 
by adding at the end the following: 
"(p) DEFINITIONS RELATING TO HUBZONES.—In this Act: 
"(1) 
HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—^The 
term 'historically underutilized business zone' means any area 
located within 1 or more— 
"(A) qualified census tracts; 
"(B) qualified nonmetropolitan counties; or 
"(C) lands within the external boundaries of an Indian 
reservation. 
"(2) HUBZONE.—The term 'HUBZone' means a historically 
underutilized business zone. 
"(3) 
HUBZONE 
SMALL 
BUSINESS 
CONCERN.—The term 
'HUBZone small business concern' means a small business con-
cern— 
"(A) that is owned and controlled by 1 or more persons, 
each of whom is a United States citizen; and 
"(B) the principal office of which is located in a 
HUBZone; or 
"(4) QUALIFIED AREAS.— 
"(A) QUALIFIED CENSUS TRACT.—^The term 'qualified 
census tract' has the meaning given that term in section 
42(d)(5)(C)(ii)(I) of the Internal Revenue Code of 1986. 
"(B) QUALIFIED NONMETROPOLITAN COUNTY.—^The term 
'qualified nonmetropolitan county means any county— 
"(i) that, based on the most recent data available 
from the Bureau of the Census of the Department 
of Commerce— 
"(I) is not located in a metropolitan statistical 
area (as defined in section 143(k)(2)(B) of the 
Internal Revenue Code of 1986); and 
"(II) in which the median household income 
is less than 80 percent of the nonmetropolitan 
State median household income; or 
"(ii) that, based on the most recent data available 
from the Secretary of Labor, has an unemployment 
rate that is not less than 140 percent of the statewide 
I l l STAT. 2628 
PUBLIC LAW 105-135—DEC. 2, 1997 
Regulations. 
average unemployment rate for the State in which 
the county is located. 
"(5) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.— 
"(A) IN GENERAL.—^A HUBZone small business concern 
is 'qualified', if— 
"(i) the small business concern has certified in 
writing to the Administrator (or the Administrator 
otherwise determines, based on information submitted 
to the Administrator by the small business concern, 
or based on certification procedures, which shall be 
established by the Administration by regulation) that— 
"(I) it is a HUBZone small business concern; 
"(II) not less than 35 percent of the employees 
of the small business concern reside in a HUBZone, 
and the small business concern will attempt to 
maintain this employment percentage during the 
performance of any contract awarded to the small 
business concern on the basis of a preference pro-
vided under section 31(b); and 
"(III) with respect to any subcontract entered 
into by the small business concern pursuant to 
a contract awarded to the small business concern 
under section 31, the small business concern will 
ensure that— 
"(aa) in the case of a contract for services 
(except construction), not less than 50 percent 
of the cost of contract performance incurred 
for personnel will be expended for its employ-
ees or for employees of other HUBZone small 
business concerns; and 
"(bb) in the case of a contract for procure-
ment of supplies (other than procurement from 
a regular dealer in such supplies), not less 
than 50 percent of the cost of manufacturing 
the supplies (not including the cost of mate-
rials) will be incurred in connection with the 
performance of the contract in a HUBZone 
by 1 or more HUBZone small business con-
cerns; and 
"(ii) no certification made or information provided 
by the small business concern under clause (i) has 
been, in accordance with the procedures established 
under section 31(c)(1)— 
"(I) successfully challenged by an interested 
party; or 
"(II) otherwise determined by the Adminis-
trator to be materially false. 
"(B) CHANGE IN PERCENTAGES.—The Administrator 
may utilize a percentage other than the percentage speci-
fied in item (aa) or (bb) of subparagraph (A)(i)(III), if the 
Administrator determines that such action is necessary 
to reflect conventional industry practices among small busi-
ness concerns that are below the numerical size standard 
for businesses in that industry category. 
"(C) 
CONSTRUCTION AND OTHER 
CONTRACTS.—^The 
Administrator shall promulgate final regulations imposing 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2629 
requirements that are similar to those specified in sub-
clauses (rV) and (V) of subparagraph (A)(i) on contracts 
for general and specialty construction, and on contracts 
for any other industry category that would not otherwise 
be subject to those requirements. The percentage applicable 
to any such requirement shall be determined in accordance 
with subparagraph (B). 
"(D) LIST OF QUALIFIED SMALL BUSINESS CONCERNS.— 
The Administrator shall establish and maintain a list of 
qualified HUBZone small business concerns, which list 
shEill, to the extent practicable— 
"(i) include the name, address, and type of business 
with respect to each such small business concern; 
"(ii) be updated by the Administrator not less than 
annually; and 
"(iii) be provided upon request to any Federal 
agency or other entity.", 
(b) FEDERAL CONTRACTING.— 
(1) IN GENERAL.—The Small Business Act (15 U.S.C. 631 
et seq.) is amended— 
(A) by redesignating section 31 as section 32; and 15 USC 631 note. 
(B) by inserting after section 30 the following: 
"SEC. 31. HUBZONE PROGRAM. 
15 USC 657a. 
"(a) IN GENERAL.—^There is established within the Administra-
tion a program to be carried out by the Administrator to provide 
for Federal contracting assistance to qualified HUBZone sm^l busi-
ness concerns in accordance with this section. 
"(b) ELIGIBLE CONTRACTS.— 
"(1) DEFINITIONS.—In this subsection— 
"(A) the term 'contracting officer' has the meaning 
given that term in section 27(f)(5) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 423(f)(5)); and 
"(B) the term 'full and open competition' has the mean-
ing given that term in section 4 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403). 
"(2) AUTHORITY OF CONTRACTING OFFICER.—^Notwithstand-
ing any other provision of law— 
"(A) a contracting officer may award sole source con-
tracts under this section to any qualified HUBZone small 
business concern, if— 
"(i) the qualified HUBZone small business concern 
is determined to be a responsible contractor with 
respect to performance of such contract opportunity, 
and the contracting officer does not have a reasonable 
expectation that 2 or more qualified HUBZone small 
business concerns will submit offers for the contracting 
opportunity; 
"(ii) the anticipated award price of the contract 
(including options) will not exceed— 
"(I) $5,000,000, in the case of a contract oppor-
tunity assigned a stsmdard industrial classification 
code for manufacturing; or 
"(II) $3,000,000, in the case of all other con-
tract opportunities; and 
Ill STAT. 2630 
PUBLIC LAW 105-135—DEC. 2, 1997 
Regulations. 
"(iii) in the estimation of the contracting officer, 
the contract award can be made at a fair and reason-
able price; 
"(B) a contract opportunity shall be awarded pursuant 
to this section on the basis of competition restricted to 
qualified HUBZone small business concerns if the contract-
ing officer has a reasonable expectation that not less than 
2 qualified HUBZone small business concerns will submit 
offers and that the award can be made at a fair market 
price; and 
"(C) not later than 5 days from the date the Adminis-
tration is notified of a procurement officer's decision not 
to award a contract opportunity under this section to a 
qualified HUBZone small business concern, the Adminis-
trator may notify the contracting officer of the intent to 
appeal the contracting officer's decision, and within 15 
days of such date the Administrator may file a written 
request for reconsideration of the contracting officer's deci-
sion with the Secretary of the department or agency head. 
"(3) 
PRICE EVALUATION PREFERENCE IN FULL AND OPEN 
COMPETITIONS.—In any case in which a contract is to be 
awarded on the basis of full and open competition, the price 
offered by a qualified HUBZone small business concern shall 
be deemed as being lower than the price offered by another 
offeror (other than another small business concern), if the price 
offered by the quedified HUBZone small business concern is 
not more than 10 percent higher than the price offered by 
the otherwise lowest, responsive, and responsible offeror. 
"(4) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.— 
A procurement may not be made from a source on the basis 
of a preference provided in paragraph (2) or (3), if the procure-
ment would otherwise be made from a different source under 
section 4124 or 4125 of title 18, United States Code, or the 
Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.). 
"(c) ENFORCEMENT; PENALTIES.— 
"(1) VERIFICATION OF ELIGIBILITY.—^In carrying out this 
section, the Administrator shall establish procedures relating 
to— 
"(A) the filing, investigation, and disposition by the 
Administration of any challenge to the eligibility of a small 
business concern to receive assistance under this section 
(including a challenge, filed by an interested party, relating 
to the veracity of a certification made or information pro-
vided to the Administration by a small business concern 
under section 3(p)(5)); and 
"(B) verification by the Administrator of the accuracy 
of any certification made or information provided to the 
Administration by a small business concern under section 
3(p)(5). 
"(2) EXAMINATIONS.—^The procedures established under 
paragraph (1) may provide for program examinations (including 
random program examinations) by the Administrator of any 
small business concern making a certification or providing 
information to the Administrator under section 3(p)(5). 
"(3) PROVISION OF DATA.—^Upon the request of the Adminis-
trator, the Secretary of Labor, the Secretary of Housing and 
Urban Development, and the Secretary of the Interior (or the 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2631 
Assistant Secretary for Indiem Affairs), shall promptly provide 
to the Administrator such information as the Administrator 
determines to be necessary to carry out this subsection, 
"(4) PENALTIES.—In addition to the penalties described in 
section 16(d), any small business concern that is determined 
by the Administrator to have misrepresented the status of 
that concern as a 'HUBZone small business concern' for pur-
poses of this section, shall be subject to— 
"(A) section 1001 of title 18, United States Code; and 
"(B) sections 3729 through 3733 of title 31, United 
States Code.". 
(2) INITIAL LIMITED APPLICABILITY.—^During the period 
15 use 657a 
beginning on the date of enactment of this Act and ending 
^o^-
on September 30, 2000, section 31 of the Small Business Act 
(as added by paragraph (1) of this subsection) shall apply 
only to procurements by— 
(A) the Department of Defense; 
(B) the Department of Agriculture; 
(C) the Department of Health and Human Services; 
(D) the Department of Transportation; 
(E) the Department of Energy; 
(F) the Department of Housing and Urban Develop-
ment; 
(G) the Environmental Protection Agency; 
(H) the National Aeronautics and Space Administra-
tion; 
(I) the General Services Administration; and 
(J) the Department of Veterans Affairs. 
SEC. 603. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL 
BUSINESS ACT. 
(a) PERFORMANCE OF CONTRACTS.—Section 8(d) of the Small 
Business Act (15 U.S.C. 637(d)) is amended— 
(1) in paragraph (1>— 
(A) in the first sentence, by striking "„ small business 
concerns owned and controlled by socially and economically 
disadvantaged 
individuals" and inserting ", 
qualified 
HUBZone small business concerns, small business concerns 
owned and controlled by socially and economically dis-
advantaged individuals"; and 
(B) in the second sentence, by inserting "qualified 
HUBZone small business concerns," after "small business 
concerns,"; 
(2) in paragraph (3)— 
(A) by inserting "qualified HUBZone small business 
concerns," after "small business concerns," each place that 
term appears; and 
(B) by adding at the end the following: 
"(F) In this contract, the term 'qualified HUBZone small 
business concern' has the meaning given that term in section 
3(p) of the Small Business Act."; 
(3) in paragraph (4)(E), by striking "small business concerns 
and" 
and 
inserting 
"small 
business 
concerns, 
qualified 
HUBZone small business concerns, and"; 
(4) in paragraph (6), by inserting "qualified HUBZone small 
business concerns," after "small business concerns," each place 
that term appears; £ind 
Ill STAT. 2632 
PUBLIC LAW 105-135—DEC. 2, 1997 
(5) in paragraph (10), by inserting "qualified HUBZone 
small business concerns," after "small business concerns,". 
(b) AWARDS OF CONTRACTS.—Section 15 of the Small Business 
Act (15 U.S.C. 644) is amended— 
(1) in subsection (g)(1)— 
(A) by inserting "qualified HUBZone small business 
concerns," after "small business concerns," each place that 
term appears; 
(B) in the second sentence, by striking "20 percent" 
£ind inserting "23 percent"; and 
(C) by inserting after the second sentence the following: 
"The Govemmentwide goal for participation by qualified 
HUBZone small business concerns shall be established at 
not less than 1 percent of the total value of all prime 
contract awards for fiscal year 1999, not less than 1.5 
percent of the total value of all prime contract awards 
for fiscal year 2000, not less than 2 percent of the total 
value of all prime contract awards for fiscal year 2001, 
not less than 2.5 percent of the total value of all prime 
contract awards for fiscal year 2002, and not less than 
3 percent of the total value of all prime contract awards 
for fiscal year 2003 and each fiscal year thereafter."; 
(2) in subsection (g)(2)— 
(A) in the first sentence, by striking "„ by small busi-
ness concerns owned and controlled by socially and 
economically disadvantaged individuals" and 
inserting 
", by qualified HUBZone small business concerns, by small 
business concerns owned and controlled by socially and 
economically disadvantaged individuals"; 
(B) in the second sentence, by inserting "qualified 
HUBZone small business concerns," after "small business 
concerns,"; and 
(C) in the fourth sentence, by striking 'Tsy small busi-
ness concerns owned and controlled by socially and 
economically disadvantaged individuals and participation 
by small business concerns owned and controlled by 
women" and inserting "by qualified HUBZone small busi-
ness concerns, by small business concerns owned and con-
trolled by socially and economically disadvantaged individ-
uals, and by small business concerns owned and controlled 
by women"; and 
(3) in subsection (h), by inserting "qualified HUBZone small 
business concerns," after "small business concerns," each place 
that term appears. 
(c) OFFENSES AND PENALTIES.—Section 16 of the Small Business 
Act (15 U.S.C. 645) is amended— 
(1) in subsection (d)(1)— 
(A) by inserting ", a 'qualified HUBZone small business 
concern'," after " 'small business concern',"; and 
(B) in subparagraph (A), by striking "section 9 or 15" 
and inserting "section 9, 15, or 31"; and 
(2) in subsection (e), by inserting ", a 'HUBZone small 
business concern'," after " 'small business concern',". 
SEC. 604. OTHER TECHNICAL AND CONFORMING AMENDMENTS. 
(a) TITLE 10, UNITED STATES CODE.—Section 2323 of title 10, 
United States Code, is amended— 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2633 
(1) in subsection (a)(1)(A), by inserting before the semicolon 
the following: ", and qualified HUBZone small business con-
cerns (as defined in section 3(p) of the Small Business Act)"; 
and 
(2) in subsection (f)(1), by inserting "or as a qualified 
HUBZone small business concern (as defined in section 3(p) 
of the Small Business Act)" after "(as described in subsection 
(a))". 
(b) FEDERAL HOME LOAN BANK ACT.—Section 21A(b)(13) of 
the Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(13)) is amend-
ed— 
(1) by striking "concerns and small" and inserting "con-
cerns, small"; and 
(2) by inserting ", and qualified HUBZone small business 
concerns (as defined in section 3(p) of the Small Business 
Act)" after "disadvantaged individuals". 
(c) SMALL BUSINESS ECONOMIC POLICY ACT OF 1980.—Section 
303(e) of the Small Business Economic PoHcy Act of 1980 (15 
U.S.C. 631b(e)) is amended— 
(1) in paragraph (1), by striking "and" at the end; 
(2) in paragraph (2), by striking the period at the end 
and inserting "; and"; and 
(3) by adding at the end the following: 
"(3) qualified HUBZone small business concern (as defined 
in section 3(p) of the Small Business Act).". 
(d) 
SMALL 
BUSINESS 
INVESTMENT ACT OF 1958.—Section 
411(c)(3)(B) of the Small Business Investment Act of 1958 (15 
U.S.C. 694b(c)(3)(B)) is amended by inserting before the semicolon 
the following: ", or to a qualified HUBZone small business concern 
(as defined in section 3(p) of the Small Business Act)". 
(e) TITLE 31, UNITED STATES CODE.— 
(1) CONTRACTS FOR COLLECTION SERVICES.—Section 3718(b) 
of title 31, United States Code, is amended— 
(A) in paragraph (1)(B), by inserting "and law firms 
that are qualified HUBZone small business concerns (as 
defined in section 3(p) of the Small Business Act)" after 
"disadvEintaged individuals"; and 
(B) in paragraph (3)— 
(i) in the first sentence, by inserting before the 
period "and law firms that are qualified HUBZone 
small business concerns"; 
(ii) in subparagraph (A), by striking "and" at the 
end; 
(iii) in subparagraph (B), by striking the period 
at the end and inserting "; and"; and 
(iv) by adding at the end the following: 
"(C) the term 'qualified HUBZone small business con-
cern' has the meaning given that term in section 3(p) 
of the Small Business Act.". 
(2) PAYMENTS TO LOCAL GOVERNMENTS.—Section 6701(f) 
of title 31, United States Code, is amended— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by striking "and" at the 
end; 
(ii) in subparagraph (B), by striking the period 
at the end and inserting "; and"; and 
(iii) by adding at the end the following: 
39-194 O - 97 - 18 : QL 3 Part 3 
I l l STAT. 2634 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(C) qualified HUBZone small business concerns."; and 
(B) in paragraph (3)— 
(i) in subparagraph (A), by striking "and" at the 
end; 
(ii) in subparagraph (B), by striking the period 
at the end and inserting "; and"; and 
(iii) by adding at the end the following: 
"(C) the term 'qualified HUBZone small business con-
cern' has the meaning given that term in section 3(p) 
of the Small Business Act (15 U.S.C. 632(o)).". 
(3) REGULATIONS.—Section 7505(c) of title 31, United States 
Code, is amended by striking "small business concerns and" 
and inserting "small business concerns, qualified HUBZone 
small business concerns, and". 
(f) OFFICE OF FEDERAL PROCUREMENT POLICY ACT.— 
(1) ENUMERATION OF INCLUDED FUNCTIONS.—Section 6(d) 
of the Office of Federal Procurement Policy Act (41 U.S.C. 
405(d)) is amended— 
(A) in paragraph (11), by inserting "qualified HUBZone 
small business concerns (as defined in section 3(p) of the 
Small Business Act)," after "small businesses,"; and 
(B) in paragraph (12), by inserting "qualified HUBZone 
small business concerns (as defined in section 3(p) of the 
Small Business Act (15 U.S.C. 632(o))," afl:er "small 
businesses,". 
(2) PROCUREMENT DATA.—Section 502 of the Women's Busi-
ness Ownership Act of 1988 (41 U.S.C. 417a) is amended— 
(A) in subsection (a)— 
(i) in the first sentence, by inserting "the number 
of qualified HUBZone small business concerns," after 
"Procurement Policy"; and 
(ii) by inserting a comma after "women"; and 
(B) in subsection (b), by inserting after "section 204 
of this Act" the following: ", and the term 'qualified 
HUBZone small business concern' has the meaning given 
that term in section 3(p) of the Small Business Act (15 
U.S.C. 632(o)).". 
(g) ENERGY POLICY ACT OF 1992.—Section 3021 of the Energy 
PoHcy Act of 1992 (42 U.S.C. 13556) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2), by striking "or"; 
(B) in paragraph (3), by striking the period and insert-
ing "; or"; Eind 
(C) by adding at the end the following: 
"(4) qualified HUBZone small business concerns."; and 
(2) in subsection (b), by adding at the end the following: 
"(3) The term 'qualified HUBZone small business concern' 
has the meaning given that term in section 3(p) of the Small 
Business Act (15 U.S.C. 632(o)).". 
(h) TITLE 49, UNITED STATES CODE.— 
(1) PROJECT GRANT APPLICATION APPROVAL CONDITIONED 
ON ASSURANCES ABOUT AIRPORT OPERATION.—Section 47107(e) 
of title 49, United States Code, is amended— 
(A) in paragraph (1), by inserting before the period 
"or qualified HUBZone small business concerns (as defined 
in section 3(p) of the Small Business Act)"; 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2635 
(B) in paragraph (4)(B), by inserting before the period 
"or as a qualified HUBZone small business concern (as 
defined in section 3(p) of the Small Business Act)"; and 
(C) in paragraph (6), by inserting "or a qualified 
HUBZone small business concern (as defined in section 
3(p) of the Small Business Act)" after "disadvantaged 
individual". 
(2) MINORITY AND DISADVANTAGED BUSINESS PARTICIPA-
TION.—Section 47113 of title 49, United States Code, is amend-
ed— 
(A) in subsection (a)— 
(i) in paragraph (1), by striking the period at the 
end and inserting a semicolon; 
(ii) in paragraph (2), by striking the period at 
the end and inserting "; and"; and 
(iii) by adding at the end the following: 
"(3) the term 'qualified HUBZone small business concern' 
has the meaning given that term in section 3(p) of the Small 
Business Act (15 U.S.C. 632(o))."; and 
(B) in subsection (b), by inserting before the period 
"or qualified HUBZone small business concerns". 
SEC, 605. REGULATIONS. 
Federal Register, 
(a) IN GENERAL.—^Not later than 180 days after the date of 
15 use 632 note, 
enactment of this Act, the Administrator shall publish in the Fed-
eral Register such final regulations as may be necessary to carry 
out this title and the amendments made by this title. 
(b) FEDERAL ACQUISITION REGULATION.—^Not later than 180 
days after the date on which final regulations are published under 
subsection (a), the Federal Acquisition Regulatory Council shall 
amend the Federal Acquisition Regulation in order to ensure 
consistency between the Federal Acquisition Regulation, this title 
and the amendments made by this title, and the final regulations 
published under subsection (a). 
SEC. 606. REPORT. 
15 USC 657a 
Not later than March 1, 2002, the Administrator shall submit 
to the Committees a report on the implementation of the HUBZone 
program established under section 31 of the Small Business Act 
(as added by section 602(b) of this title) and the degree to which 
the HUBZone program has resulted in increased emplojnnent 
opportunities and an increased level of investment in HUBZones 
(as defined in section 3(p) of the Small Business Act (15 U.S.C. 
632(p)), as added by section 602(a) of this title). 
SEC. 607. AUTHORIZATION OF APPROPRIATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 note) 
(as amended by section 101 of this Act) is amended— 
(1) in subsection (c), by adding at the end the following: 
"(3) HUBZONE PROGRAM.—There are authorized to be 
appropriated to the Administration to carry out the program 
under section 31, $5,000,000 for fiscal year 1998."; 
(2) in subsection (d), by adding at the end the following: 
"(3) HUBZONE PROGRAM.—There are authorized to be 
appropriated to the Administration to carry out the program 
under section 31, $5,000,000 for fiscal year 1999."; and 
(3) in subsection (e), by adding at the end the following: 
I l l STAT. 2636 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(3) HUBZONE PROGRAM.—^There are authorized to be 
appropriated to the Administration to carry out the program 
under section 31, $5,000,000 for fiscal year 2000.". 
TITLE VII—SERVICE DISABLED 
VETERANS 
15 u s e 631 note. 
SEC. 701. PURPOSES. 
The purposes of this title are— 
(1) to foster enhanced entrepreneurship among eligible vet-
erans by providing increased opportunities; 
(2) to vigorously promote the legitimate interests of small 
business concerns owned and controlled by eligible veterans; 
and 
(3) to ensure that those concerns receive fair consideration 
in purchases made by the Federal Government. 
15 u s e 631 note. 
SEC. 702. DEFINITIONS. 
In this title: 
(1) ELIGIBLE VETERAN.—^The term "eligible veteran" means 
a disabled veteran (as defined in section 4211(3) of title 38, 
United States Code). 
(2) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY 
ELIGIBLE VETERANS.—^The term "small business concern owned 
and controlled by eligible veterans" means a small business 
concern (as defined in section 3 of the Small Business Act)— 
(A) that is at least 51 percent owned by 1 or more 
eligible veterans, or in the case of a publicly owned busi-
ness, at least 51 percent of the stock of which is owned 
by 1 or more eligible veterans; and 
(B) whose management and daily business operations 
Eire controlled by eligible veterans. 
15 u s e 631 note. 
SEC. 703. REPORT BY SMALL BUSINESS ADMINISTRATION. 
(a) STUDY AND REPORT.— 
(1) IN GENERAL.—^Not later than 9 months after the date 
of enactment of this Act, the Administrator shall conduct a 
comprehensive study and submit to the Committees a final 
report containing 
findings 
and recommendations 
of the 
Administrator on— 
(A) the needs of small business concerns owned and 
controlled by eligible veterans; 
(B) the availability and utilization of Administration 
programs by small business concerns owned and controlled 
by eligible veterans; 
(C) the percentage, and dollar value, of Federal con-
tracts awarded to small business concerns owned and con-
trolled by eligible vetersins in the preceding 5 fiscal years; 
and 
(D) methods to improve Administration and other 
agency programs to serve the needs of small business con-
cerns owned and controlled by eligible veterans. 
(2) CONTENTS.—^The report under paragraph (1) shall include 
recommendations to Congress concerning the need for legislation 
and recommendations to the Office of Management and Budget, 
PUBLIC LAW 105-135—DEC. 2, 1997 
111 STAT. 2637 
relevant offices within the Administration, and the Department 
of Veterans Affairs. 
(b) CONDUCT OF STUDY.—In carrying out subsection (a), the 
Administrator— 
(1) may conduct surveys of small business concerns owned 
and controlled by eligible veterans and service disabled veter-
ans, including those who have sought financial assistance or 
other services from the Administration; 
(2) shall consult with the appropriate committees of Con-
gress, relevant groups and organizations in the nonprofit sector, 
and Federal or State government agencies; and 
(3) shall have access to any information within other Fed-
eral agencies that pertains to such veterans and their small 
businesses, unless such access is specifically prohibited by law. 
SEC. 704. INFORMATION COLLECTION. 
15 USC 631 note. 
After the date of issuance of the report required by section 
703(a), the Secretary of Veterans Affairs shall, in consultation with 
the Assistant Secretary for Veterans' Employment and Training 
and the Administrator, engage in efforts each fiscal year to identify 
small business concerns owned and controlled by eligible veterans 
in the United States. The Secretary shall inform each small business 
concern identified under this section that information on Federal 
procurement is available from the Administrator. 
SEC. 705. STATE OF SMALL BUSINESS REPORT. 
Section 303(b) of the Small Business Economic Policy Act of 
1980 (15 U.S.C. 631b(b)) is amended by striking "and female-owned 
businesses" and inserting ", female-owned, and veteran-owned 
businesses". 
SEC. 706. LOANS TO VETERANS. 
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
amended by inserting after paragraph (7) the following: 
"(8) The Administration may make loans under this sub-
section to small business concerns owned and controlled by 
disabled veterans (as defined in section 4211(3) of title 38, 
United States Code).". 
SEC. 707. ENTREPRENEURIAL TRAINING, COUNSELING, AND MANAGE- 
15 USC 631 note. 
MENT ASSISTANCE. 
The Administrator shall take such actions as may be necessary 
to ensure that small business concerns owned and controlled by 
eligible veterans have access to programs established under the 
Small Business Act that provide entrepreneurial training, business 
development assistance, counseling, and management assistance 
to small business concerns, including, among others, the Small 
Business Development Center program and the Service Corps of 
Retired Executives (SCORE) program. 
SEC. 708. GRANTS FOR ELIGIBLE VETERANS* OUTREACH PROGRAMS. 
Section 8(b) of the Small Business Act (15 U.S.C. 637(b)) is 
amended— 
(1) in paragraph (15), by striking "and" at the end; 
(2) in the first paragraph designated as paragraph (16), 
by striking the period at the end and inserting "; and"; and 
(3) by striking the second paragraph designated as para-
graph (16) and inserting the following: 
I l l STAT. 2638 
PUBLIC LAW 105-135—DEC. 2, 1997 
"(17) to make grants to, and enter into contracts and 
cooperative agreements with, educational institutions, private 
businesses, veterans' nonprofit community-based organizations, 
and Federal, State, and local departments and agencies for 
the establishment and implementation of outreach programs 
for disabled veterans (as defined in section 4211(3) of title 
38, United States Code).". 
15 u s e 631 note. 
SEC. 709. OUTREACH FOR ELIGIBLE VETERANS. 
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 out-
reach to assist eligible veterans, which progrsim shall include 
business training and management assistance, employment and 
relocation counseling, and dissemination of information on veterans' 
benefits and veterans' entitlements. 
Approved December 2, 1997. 
LEGISLATIVE HISTORY—S. 1139 (H.R. 2261): 
HOUSE REPORTS: No. 105-246 accompanying H.R. 2261 (Comm. on Small Busi-
ness). 
SENATE REPORTS: No. 105-62 (Comm. on Small Business). 
CONGRESSIONAL RECORD, Vol. 143 (1997): 
Sept. 9, considered and passed Senate. 
Sept. 29, considered and passed House, eimended, in lieu of H.R. 2261. 
Oct. 31, Senate concurred in House amendment with an amendment. 
Nov. 9, House concurred in Senate amendment.