Small Business Credit and Business Opportunity Enhancement Act of 1992
PL 102-366 (H.R.4111), enacted 09/04/1992

106 STAT. 986 
PUBLIC LAW 102-366—SEPT. 4, 1992 
Public Law 102-366 
102d Congress 
An Act 
Sept. 4, 1992 
[H.R. 4111] 
Small Business 
Credit and 
Business 
Opportunity 
Enhancement 
Act of 1992. 
15 u s e 631 note. 
To amend the Small Business Act and related Acts to provide loan assistance 
to small business concerns, to extend certain demonstration programs relating 
to small business participation in Federal procurement, to modify certain Small 
Business Administration programs, to assist small firms to adjust to reductions 
in Defense-related business, to improve the management of certain program activi-
ties of the Small Business Administration, to provide for the undertaking of 
certain studies, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of 
America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the "Small Business 
Credit and Business Opportunity Enhancement Act of 1992". 
(b) TABLE OF CONTENTS.—The table of contents for this Act shall 
be as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—IMPROVED ACCESS TO CREDIT 
Subtitle A—Section 7(a) Guaranteed Loan Program 
Sec. 101. Short title. 
Sec. 102. Authorizations. 
Sec. 103. Buy American preference. 
Sec. 104. State limitations on interest rates. 
Subtitle B—^Microloan Demonstration Program Amendments 
Sec. 111. Short title. 
Sec. 112. Findings. 
Sec. 113. Microloan demonstration program amendments. 
Sec. 114. Regulations. 
Sec. 115. Authorization of appropriations. 
TITLE II—AMENDMENTS TO THE SMALL BUSINESS ACT AND RELATED 
ACTS 
Subtitle A—Small Business Competitiveness Demonstration Program 
Sec. 201. Extension of demonstration programs. 
Sec. 202. Management improvements to the small business competitiveness dem-
onstration program. 
Sec. 203. Amendments to the dredging demonstration program. 
Subtitle B—Defense Economic Transition Assistance 
Sec. 211. Section 7(a) loan program. 
Sec. 212. Small business development center program. 
Subtitle C—Small Business Administration Management 
Sec. 221. Disadvantaged small business status decisions. 
Sec. 222. Establishment of size standards. 
Sec. 223. Management of Small Business Development Center Program. 
Sec. 224. National Seminar on Small Business Exports. 
Sec. 225. Co-sponsored training. 
Sec. 226. Viability of secondary markets. 
Subtitle D—^Technical Amendments and Repealers 
Sec. 231. Commission on minority business development. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 987 
TITLE III—STUDIES AND RESOLUTIONS 
Subtitle A—^Access to Surety Bonding 
Sec. 301. Short title. 
Sec. 302. Survey. 
Sec. 303. Report. 
Sec. 304. Deiinitions. 
Subtitle B—Small Business Loan Secondary Market Study 
Sec. 311. Secondary market for loans to small businesses. 
Subtitle C—Contract Bundling Study 
Sec. 321. Contract bundling study. 
Subtitle D—Resolution Regarding Small Business Access to Capital 
Sec. 331. Sense of the Congress. 
TITLE IV—SMALL BUSINESS INVESTMENT ACT AMENDMENTS 
Sec. 401. Short title. 
Sec. 402. Leverage (matching funds) formula. 
Sec. 403. Participating securities. 
Sec. 404. Pooling. 
Sec. 405. Authorizations. 
Sec. 406. Safety and soundness. 
Sec. 407. Examinations. 
Sec. 408. Non-financed SBICs. 
Sec. 409. Minimum capital. 
Sec. 410. Definitions. 
Sec. 411. Interest rate ceiling. 
Sec. 412. Preferred partnership interests. 
Sec. 413. Indirect funds from State or local governments. 
Sec. 414. SBIC approvals. 
Sec. 415. Implementation. 
Sec. 416. Buy America. 
Sec. 417. Studies and reports. 
Sec. 418. No effect on securities laws. 
TITLE I—IMPROVED ACCESS TO CREDIT 
Subtitle A—Section 7(a) Guaranteed Loan c
r
e
d
i
t c
r
u
n
c
T 
Program 
Relief Act of 
1992. 
SEC. 101. SHORT TITLE. 
15 USC 631 note. 
This subtitle may be cited as the "Small Business Credit Crunch 
Relief Act of 1992". 
SEC. 102. AUTHORIZATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended— 
(1) in subsection (a), by adding at the end the following 
new paragraph: 
"(4) Except as may be otherwise specificgdly provided by 
law, the amount of deferred participation loans authorized in 
this section— 
"(A) shall mean the net amount of the loan principal 
guaranteed by the Small Business Administration (and 
does not include any amount which is not guaremteed); 
and 
"(B) shall be available for a national program, except 
that the Administration may use not more than an amount 
equal to 10 percent of the amount authorized each year 
for any special or pilot program directed to identified sec-
106 STAT. 988 
PUBLIC LAW 102-366—SEPT. 4, 1992 
tors of the small business community or to specific 
geographic regions of the United States."; 
(2) by amending subsection (e)(2) to read as follows: 
"(2) For the programs authorized by this Act, the Admin-
istration is authorized to make $5,978,000,000 in deferred 
participation loans and other financing. Of such sum, the 
Administration is authorized to make— 
"(A) $5,200,000,000 in general business loans, as provided 
in section 7(a); 
"(B) $53,000,000 in loans, as provided in section 
7(aX12XB); and 
"(C) $725,000,000 in financings, as provided in section 
7(aX13) and section 504 of the Small Business Investment 
Act of 1958."; 
(3) amending subsection (gX2) to read as follows: 
"(2) For the programs authorized by this Act, the Adminis-
tration is authorized to make $7,030,000,000 in deferred partici-
pation loans and other financings. Of such sum, the Administra-
tion is authorized to make— 
"(A) $6,200,000,000 in general business loans as provided 
in section 7(a); 
"(B) $55,000,000 in loans, as provided in 
section 
7(aX12XB); and 
"(C) $775,000,000 in financings, as provided in section 
7(aX13) and section 504 of the Small Business Investment 
Act of 1958."; and 
(4) by amending subsection (i)(2) to read as follows: 
"(2) For the programs authorized by this Act, the Admin-
istration is authorized to make $8,083,000,000 in deferred 
participation loans and other financings. Of such sum, the 
Administration is authorized to make— 
"(A) $7,200,000,000 in general business loans, as provided 
in section 7(a); 
"(B) $58,000,000 in loans, as provided in section 
7(aX12XB); and 
"(C) $825,000,000 in financings, as provided in section 
7(aX13) and section 504 of the Small Business Investment 
Act of 1958.". 
15 use 631 note. SEC. 103. BUY AMERICAN PREFERENCE. 
In providing financial assistance with amounts appropriated 
pursuant to the amendments made by this Act, the Administrator 
of the Small Business Administration shall, when practicable, 
accord preference to small business concerns which use or purchase 
equipment and supplies produced in the United States. The 
Administrator shall also encourage small business concerns receiv-
ing such assistance to purchase such equipment and supplies. 
SEC. 104. STATE LIMITATIONS ON INTEREST RATES. 
Section 7(aX4) of the Small Business Act (15 U.S.C. 636(aX4)) 
is amended by striking "The rate of interest on financings made 
on a deferred basis shall be legal and reasonable but" and inserting 
the following: "Notwithstanding the provisions of the constitution 
of any State or the laws of any State limiting the rate or amount 
of interest which may be charged, taken, received, or reserved, 
the maximum legal rate of interest on any financing made on 
a deferred basis pursuant to this subsection". 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 989 
Subtitle B—^Microloan Demonstration 
Program Amendments 
SEC. 111. SHORT TITLE. 
This subtitle may be cited as the '^icrolending Expansion Act 
of 1992". 
SEC. 112. FINDINGS. 
The Congress finds that— 
(1) nationwide, there are many individuals who possess skills 
that, with certain short-term assistance, could enable them 
to become successfully self-employed; 
(2) many talented and skilled individuals who are employed 
in low-wage occupations could, with sufficient opportunity, start 
their own small business concerns, which could provide them 
with an improved standard of living; 
(3) most such individuals have little or no savings, a nonexist-
ent or poor credit history, and no access to credit or capital 
with wmch to start a business venture; 
(4) women, minorities, and individuals residing in areas of 
high unemployment and high levels of poverty have particular 
difficulty obtaining access to credit or capital; 
(5) providing such individuals with sm£ill-scale, short-term 
financial assistance in the form of microloans, together with 
intensive marketing, management, and technical assistance, 
could enable them to start or maintain small businesses, to 
become self-sufficient, and to raise their standard of Uving; 
(6) banking institutions £U'e reluctant to provide such assist-
ance because of the administrative costs associated with 
processing and servicing the loans and because they lack experi-
ence in providing the type of marketing, meuiagement, and 
technical assistance needed by such borrowers; 
(7) many organizations that have had successful experiences 
in providing microloans and marketing, management, and tech-
nical assistance to such borrowers exist throughout the Nation; 
and 
(8) loans from the Federal Grovemment to intermediaries 
for the purpose of relending to start-up, newly established 
and growing small business concerns are an important catalyst 
to attract private sector participation in microlending. 
SEC. 113. MICROLOAN DEMONSTRATION PROGRAM AMENDMENTS. 
(a) IN GENERAL.—Section 7(m) of the Small Business Act (15 
U.S.C. 636(m)) is amended— 
(1) in paragraph (IXA)— 
(A) by amending clause (i) to read as follows: 
"(i) to assist women, low-income, and minority entre-
preneurs and business owners and other such individuals 
possessing the capability to operate successful business 
concerns; and 
(B) in clause (iiiXD, by inserting ", particularly loans 
in amounts averaging not more than $7,500," after "small-
scale loans"; 
(2) in paragraph (3XA)— 
(A) by striking "As part or and inserting the following: 
"(i) IN GENERAL.—As part of; 
Microlending 
Expansion Act of 
1992. 
15 u s e 631 note. 
15 u s e 636 note. 
Women. 
Disadvantaged. 
Minorities. 
106 STAT. 990 
PUBLIC LAW 102-366—SEPT. 4, 1992 
(B) by redesignating clauses (i) through (viii) as 
subclauses (I) through (VIII), respectively; 
(C) in subclause (III), as redesignated, by striking "eco-
nomic and luiemployment" and inserting "economic, pov-
erty, and unemplo3rment*'; 
(D) by amending subclause (VIII), as redesignated, to 
read as follows: 
"(VIII) any plan to involve other technical assist-
ance providers (such as counselors from the Service 
Corps of Retired Executives or small business 
development centers) or private sector lenders in 
assisting selected business concerns."; and 
(E) by adding at the end the following: 
"(ii) SELECTION OF INTERMEDIARIES.—In selecting 
intermediaries to participate in the program estab-
lished under this subsection, the Administration shall 
give priority to those applicants that provide loeins 
in amounts averaging not more thsm $7,500."; 
(3) by amending paragraph (3)(F) to read as follows: 
"(F) LOAN DURATION; INTEREST RATES.— 
"(i) LOAN DURATION.—Loans made by the Adminis-
tration under this subsection shall be for a term of 
10 years. 
"(ii) APPLICABLE INTEREST RATES.—Except as pro-
vided in clause (iii), loans made by the Administration 
under this subsection to an intermediary shall bear 
an interest rate equal to 1.25 percentage points below 
the rate determined by the Secretary of the Treasury 
for obligations of the United States with a period of 
maturity of 5 years, adjusted to the nearest one-eighth 
of 1 percent. 
"(iii) RATES APPLICABLE TO CERTAIN SMALL LOANS.— 
Loans made by the Administration to an intermediary 
that makes loans to small business concerns £ind entre-
preneurs averaging not more than $7,500, shall bear 
an interest rate that is 2 percentage points below the 
rate determined by the Secretary of the Treasury for 
obUgations of the United States with a period of matu-
rity of 5 years, adjusted to the nearest one-eighth 
of 1 percent. 
"(iv) 
RATES APPLICABLE TO MULTIPLE SITES OR 
OFFICES.—^The interest rate prescribed in clause (ii) 
or (iii) shall apply to each separate loan-making site 
or office of 1 intermediary only if such site or office 
meets the requirements of that clause. 
"(v) RATE BASIS.—^The applicable rate of interest 
under this paragraph shall— 
"(I) be applied retroactively for the first year 
of an intermediary's participation in the program, 
based upon the actual lending practices of the 
intermediary as determined by the Administration 
prior to the end of such year; and 
"(II) be based in the second and subsequent 
years of an intermediary's participation in the pro-
gram, upon the actual lending practices of the 
intermediary during the term of the intermediary's 
participation in the program. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 991 
"(vii) COVERED INTERMEDIARIES.—The interest rates 
prescribed in this subparagraph shall apply to all logins 
made to intermediaries under this subsection on or 
after October 28,1991."; 
(4) in paragraph (4)— 
(A) in subparagraph (A), by striking "Subject to" and 
inserting "Except as otherwise provided in subparagraph 
(C) and subject to"; and 
(B) by striking subparagraph (A) and inserting in lieu 
thereof: 
"(A) GRANT AMOUNTS.—Except as otherwise provided in 
subparagraph (C) and subject to subparagraph (B), each 
intermediary that receives a loan under subparagraph (B)(i) 
of paragraph (1) shall be eligible to receive a grant to 
provide marketing, management, and technical assistance 
to small business concerns that are borrowers under this 
subsection. Except as provided in subparagraph (C), each 
intermediary meeting the requirements of subparagraph 
(B) may receive a grant of not more them 25 percent of 
the total outstanding balance of loans made to it under 
this subsection."; 
(C) in subparagraph (B), by striking "an amount equal 
to one-half of the amount of the grant" and inserting in 
lieu thereof "an amount equal to 25 percent of the amount 
of the grant"; 
(D) by adding at the end the following: 
"(C) ADDITIONAL TECHNICAL ASSISTANCE GRANTS FOR MAK-
ING CERTAIN LOANS.— 
"(i) IN GENERAL.—Each intermediary that has a port-
folio of loans made under this subsection that averages 
not more than $7,500 during the period of the 
intermediar^s participation in the program shall be 
eligible to receive a grant equal to 5 percent of the 
total outstanding balance of loans made to the 
intermediary under this subsection, in addition to 
grants made under subparagraph (A). 
"(ii) PURPOSES.—^A grant awarded imder clause (i) 
may be used to provide marketing, management, and 
technical assistance to small business concerns that 
are borrowers under this subsection. 
"(iii) CONTRIBUTION 
EXCEPTION.—The contribution 
requirements in subparagraph (B) do not apply to 
grants made under this subparagraph. 
"(D) ELIGIBILITY FOR MULTIPLE SITES OR OFFICES.—The 
ehgibilif^ for a grant described in subparagraph (A), or 
(C) shall be determined separately for each loan-making 
site or office of 1 intermediary."; 
(5) in paragraph (5XA), by striking "2 grants" and inserting 
"6 grants"; 
(6) in paragraph (6), by amending subparagraph (C) to read 
as follows: 
"(C) INTEREST LIMIT.—^Notwithstanding any provision of 
the laws of any State or the constitution of any State 
pertaining to the rate or amoimt of interest that may 
be charged, taken, received, or reserved on a loan, the 
maximum rate of interest to be charged on a microloan 
funded under this subsection shall not exceed tiie rate 
106 STAT. 992 
PUBLIC LAW 102-366—SEPT. 4, 1992 
of interest applicable to a loan made to an intermediary 
by the Administration— 
"(i) in the case of a loan of more than $7,500 made 
by the intermediary to a small business concern or 
entrepreneur by more than 7.75 percentage points; 
and 
"(ii) in the case of a loan of not more than $7,500 
made by the intermediary to a small business concern 
or entrepreneur by more than 8.5 percentage points."; 
(7) in paragraph (7)— 
(A) in subparagraph (A), by striking "35 microloan pro-
grams" and inserting "60 microlo£in programs"; 
(B) in subparagraph (B), by striking "25 additional" and 
inserting "50 additional"; 
(C) by amending subparagraph (C)(i) to read as follows: 
"(i) be awarded more than 4 microloan programs 
in the first 2 years of the demonstration program nor 
more than 2 microloan programs in any year there-
after;"; 
(D) in subparagraph (C)(ii), by striking "$1,000,000" and 
inserting "$1,500,000"; and 
(E) in subparagraph (C)(iii), by striking "$1,500,000" and 
inserting "$2,500,000"; 
(8) by redesignating paragraphs (9) and (10) as paragraphs 
(10) and (11), respectively; 
(9) by inserting after paragraph (8) the following: 
"(9) TECHNICAL ASSISTANCE FOR INTERMEDIARIES.— 
"(A) IN GENERAL.—^The Administration may procure tech-
nical assistance for intermediaries participating in the 
MicroloEin Demonstration Program to ensure that such 
intermediaries have the knowledge, skills, and understand-
ing of microlending practices necessary to operate success-
ful microloan programs. 
"(B) ASSISTANCE AMOUNT.—The Administration shall 
tr£insfer 3 percent of its annual appropriation for loans 
under this subsection to the Administration's Salaries and 
Expense Account for the specific purpose of providing 1 
or more 
technical 
assistance 
grants 
to 
experienced 
microlending organizations to achieve the purpose set forth 
in subparagraph (A)."; and 
(10) in paragraph (11), as redesignated— 
(A) by amending subparagraph (A) to read as follows: 
"(A) the term 'intermediary* means— 
"(i) a private, nonprofit entity; 
"(ii) a nonprofit community development corporation; 
"(iii) a consortium of private, nonprofit organizations 
or nonprofit community development corporations; or 
"(iv) a quasi-governmental economic development 
entity (such as a planning and development district), 
other than a State, county, municipal government, or 
any agency thereof, if— 
"(I) no application is received from an eligible 
nonprofit organization; or 
"(II) the Administration determines that the 
needs of a region or geographic area are not ade-
quately served by an existing, eligible nonprofit 
organization that has submitted an application. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 993 
that seeks to borrow or has borrowed funds from the 
Administration to make microloans to small business con-
cerns under this subsection;", 
(b) EFFECTIVE DATES.—^The amendments made by paragraphs 15 use 636 note. 
(4) and (5) of subsection (a) shall become effective on October 
1,1992. 
SEC. 114. REGULATIONS. 
15 USC 636 note. 
Not later than 45 days after the date of enactment of this Act, 
the Small Business Administration shall promulgate interim final 
regulations to implement the amendments made by this subtitle. 
SEC. 115. AUTHORIZATION OF APPROPRIATIONS. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 20 of the Small 
Business Act (15 U.S.C. 631 note) is amended by adding at the 
end the following new subsection: 
"(k) AUTHORIZATION OF APPROPRIATIONS.—TO carry out the pro-
gram established imder section 7(m), there are authorized to be 
appropriated to the Small Business Administration— 
"(1) for fiscal year 1992— 
"(A) $45,000,000, to be used for the provision of loans; 
and 
"(B) $10,000,000, to be used for the provision of grants; 
"(2) for fiscal year 1993— 
"(A) $80,000,000, to be used for the provision of loans; 
and 
"(B) $25,000,000, to be used for the provision of grants; 
and 
"(3) for fiscal year 1994— 
"(A) $60,000,000, to be used for the provision of loans; 
and 
"(B) $35,000,000, to be used for the provision of grants.". 
(b) REPEAL OF EXISTING PROVISION.—Section 609 of PubUc Law 
102-140 (105 Stat. 831) is amended by striking subsection (1). 
TITLE II—AMENDMENTS TO THE SMALL 
BUSINESS ACT AND RELATED ACTS 
Subtitle A—Small Business 
Competitiveness Demonstration Program 
SEC. 201. EXTENSION OF DEMONSTRATION PROGRAMS. 
(a) SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PRO-
GRAM.—Section 711(C) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note, 102 Stat. 
3889) is amended to read as follows: 
"(c) PROGRAM TERM.—^The Program shall commence on January Effective date. 
1,1989, and terminate on September 30,1996.". 
Termination 
(b) ALTERNATIVE PROGRAM F
O
R CLOTHING A
N
D TEXTILES.—Section '*^^-
721(c) of the Small Business Competitiveness Demonstration Pro-
gram Act of 1988 (15 U.S.C. 644 note, 102 Stat. 3895) is amended 
by striking "September 30, 1992" and inserting "September 30, 
1996". 
106 STAT. 994 
PUBLIC LAW 102-366—SEPT. 4, 1992 
(c) EXPANDING SMALL BUSINESS PARTICIPATION IN DREDGING.— 
Section 722(a) of the Small Business Competitiveness Demonstra-
tion Program Act of 1988 (15 U.S.C. 644 note) is amended— 
(1) by striking "During fiscal years 1989, 1990, 1991, and 
1992, the" and inserting "The"; and 
Effective date. 
(2) by inserting before the period at the end ", commencing 
JlJ^ination 
on October 1, 1989 and terminating on September 30, 1996". 
SEC. 202. MANAGEMENT IMPROVEMENTS TO THE SMALL BUSINESS 
COMPETITIVENESS DEMONSTRATION PROGRAM. 
(a) IMPLEMENTATION ON A FISCAL YEAR BASIS.—Section 712(d) 
of the Small Business Competitiveness Demonstration Program Act 
of 1988 (15 U.S.C. 644 note, 102 Stat. 3890) is amended— 
(1) in paragraph (1), by striking "4 quarters" in the third 
sentence and inserting "4 nscal year quarters"; and 
(2) in paragraph (3), by inserting "fiscal year" before "quar-
ter". 
(b) TARGETED APPLICATION OF REMEDIAL MEASURES.—Section 
713(b) of the Small Business Competitiveness Demonstration Pro-
gram Act of 1988 (15 U.S.C. 644 note, 102 Stat. 3892) is amended— 
(1) in the first sentence, by striking "to the extent necessary 
for such agency to attain its goal" and inserting "only at those 
buying activities of the participating agency that failed to attain 
the small business participation goal required by section 
. 
712(a)"; 
(2) by striking the third sentence; and 
(3) by inserting after the first sentence, the following new 
sentence: "Upon determining that its contract aweirds to small 
business concerns again meet the goals required by section 
712(a), a participating agency shall promptly resume the use 
of unrestricted solicitations pursuant to subsection (a).". 
(c) RELATIONSHIP TO RELATED LAW.—Section 713 of the Small 
Business Competitiveness Demonstration Program Act of 1988 (15 
U.S.C. 644 note, 102 Stat. 3892), as amended by subsection (b), 
is further amended by adding at the end the following new sub-
section: 
"(d) RELATIONSHIP TO OTHER APPLICABLE LAW.—Solicitations for 
the award of contracts for architectural and engineering services 
(including surveying and mapping) issued by a Military Department 
or a Defense agency shall comply with the requirements of sub-
sections (a) eind (b) of section 2855 of title 10, United States Code.". 
(d) SUBCONTRACTING ACTIVITY.—Section 714 of the Small Busi-
ness Competitiveness Demonstration Program Act of 1988 (15 
U.S.C. 644 note, 102 Stat. 3892) is amended— 
(1) by redesignating subsection (b) as subsection (c); and 
(2) by inserting after subsection (a) the following new sub-
section: 
"(b) SUBCONTRACTING ACTIVITY.— 
"(1) SIMPLIFIED DATA COLLECTION SYSTEM.—The Adminis-
trator for Federal Procurement Policy shall develop and imple-
ment a simplified system to collect data on the participation 
of small business concerns (including small business concerns 
owned and controlled by socially and economically disadvan-
taged individuals) as other than prime contractors. 
^(2) PARTICIPATING INDUSTRIES.—The system established 
.. under paragraph (1) shall be used to collect data regarding 
contracts for architectural and engineering services (including 
date. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 995 
surveying and mapping). The Administrator for Federal 
Procurement Policy may expand such system to collect data 
regarding such other designated industry groups as deemed 
appropriate. 
"(3) PARTICIPATING AGENCIES.—As part of the system estab-
Ushed under paragraph (1) data shall be collected from— 
"(A) the Environmental Protection Agency; 
"(B) the National Aeronautics and Space Administration; 
"(C) the United States Army Corps of Engineers (Civil 
Works); and 
"(D) the Department of Energy. 
The Administrator for Federal Procurement Policy may require 
the participation of additional departments or agencies from 
the list of participating agencies designated in section 718. 
"(4) DETERMINING SMALL BUSINESS PARTICIPATION RATES.— 
The value of other than prime contract awards to small business 
concerns furnishing architectural and engineering services 
(including surveying.and mapping) (or other services provided 
by small business concerns in other designated industry groups 
as may be designated for participation by the Administrator 
for Federal Procurement) shall be counted towards determining 
whether the small business participation goal required by sec-
tion 712(a) has been attained. 
"(5) DURATION.—^The system described in subsection (a) shall Effective date. 
be established not later than October 1, 1992 (or as soon Termination 
as practicable thereafter on the first day of a subsequent quar-
ter of fiscal year 1993), and shall terminate on September 
30,1996.". 
(e) STATUS OF SMALL BUSINESS CONCERNS.—Section 714(c) of 
the Small Business Competitiveness Demonstration Program Act 
of 1988 (15 U.S.C. 644 note, 102 Stat. 3892) (as redesignated 
by subsection (d)) is amended— 
(1) in the subsection heading, by inserting "
A
N
D STATUS" 
after "SIZE"; 
(2) by inserting "and the status of the small business concern 
(as a small business concern owned and controlled by socially 
and economically disadvantaged individuals)" after "size of the 
small business concern". 
(f) REPORTS TO CONGRESS.—Section 716 of the Small Business 
Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 
644 note, 102 Stat. 3893) is amended— 
(1) in the section heading, by striking "REPORT" and inserting 
"REPORTS"; 
(2) in the first sentence of subsection (a), by striking "fiscal 
year 1991 data is" and inserting "data for fiscal year 1991 
and 1995 are"; and 
(3) in subsection (c), by striking "report" and inserting "report 
to be submitted during calendar year 1996". 
(g) IMPROVING ACCURACY OF DATA PERTAINING TO A - E SERV-
ICES.—Section 717(d) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note, 102 Stat. 
3894) is amended by inserting before the period at the end the 
following: ", and such contract was awarded under the qualification-
based selection procedures required by title IX of the Federal Prop-
erty and Administrative Services Act of 1949 (40 U.S.C. 541 et 
seq.)". 
106 STAT. 996 
PUBLIC LAW 102-366—SEPT. 4, 1992 
15 use 644 note. 
(h) PROCUREMENT PROCEDURES.—Restricted competitions pursu-
ant to section 713(b) of the Small Business Competitiveness Dem-
onstration Program Act of 1988 (15 U.S.C. 644 note, 102 Stat. 
3892) shall not be imposed with respect to the designated industry 
group of architectural and engineering services if the rate of small 
business participation exceeds 35 percent, imtil the improvements 
to the collection of data regarding prime contract awards (as 
required by subsection (g)) and the system for collecting data regard-
ing other than prime contract awards (as required by subsection 
(d)) have been implemented, as determined by the Administrator 
for Federal Procurement Policy. 
15 use 644 note. 
(i) TEST PLAN AND PoucY DIRECTION.—The Administrator for 
Federal Procurement Policy shall issue appropriate modifications 
to the test plan and policy direction issued pursuant to section 
715 of the Small Business Competitiveness Demonstration Program 
Act of 1988, to conform to the amendments made by this section 
and section 201(a). 
SEC. 203. AMENDMENTS TO THE DREDGING DEMONSTRATION PRO-
GRAM. 
(a) MODIFICATION OF THE SMALL BUSINESS PARTICIPATION 
GOALS.—^The first sentence of section 722(b) of the Small Business 
Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 
644 note, 102 Stat. 3895) is amended— 
(1) by striking "and" at the end of paragraph (3); 
(2) by striking the period at the end of paragraph (4) and 
inserting "; and"; and 
(3) by adding at the end the following new pgiragraph: 
"(5) not less than 20 percent during fiscal year 1993, and 
each subsequent year during the term of the program, including 
not less than 5 percent of the dollar value of suitable contracts 
that shall be reserved for emerging small business concerns.". 
(b) EXCLUSION OF CERTAIN CONTRACTS.—Section 722(b) of the 
Small Business Competitiveness Demonstration Program Act of 
1988 (15 U.S.C. 644 note, 102 Stat. 3896) is further amended— 
(1) by striking "total dollar value of contracts" and inserting 
"aggregate value of all suitable contracts"; and 
(2) by striking the last sentence and inserting the following: 
"The total value of contracts to be performed exclusively 
through the use of so-called dustpan dredges or seagoing hopper 
dredges is deemed to be generally unsuitable for performance 
by small business concerns and is to be excluded in calculating 
whether the rates of small business participation specified in 
subsection (b) have been attained.". 
(c) QUALIFIED SMALL BUSINESS COMPETITORS.—Section 722(c) of 
the Small Business Competitiveness Demonstration Program Act 
of 1988 (15 U.S.C. 644 note, 102 Stat. 3896) is amended— 
(1) by redesignating paragraphs (2) and (3) as paragraphs 
(3) and (4), respectively; and 
(2) by inserting after paragraph (1) the following new para-
graph: 
"(2) Prior to making a determination to restrict a solicitation 
for the performance of a dredging contract for exclusive competition 
among 2 or more eligible small business concerns in accordance 
with section 19.5 of the Govemmentwide Federal Procurement 
Regulation (48 C.F.R. 19.5, or £iny successor thereto), the contracting 
officer shall make a determination that each anticipated offeror 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 997 
is a responsible source (as defined under section 4(7) of the Office 
of Federal Procurement Policy Act (41 U.S.C. 403(7)) and has (or 
can demonstrate the capabiUty to obtain) the specialized dredging 
equipment deemed necessary to perform the work to be required 
in accordance with the schedule to be specified in the solicitation.". 
(d) CONTRACT AWARD PROCEDURES.—Section 722(c) of the Small 
Business Competitiveness Demonstration Program Act of 1988 (15 
U.S.C. 644 note, 102 Stat. 3896) is further amended— 
(1) in the first sentence of paragraph (1), by striking "in 
psiragraphs (2) and (3)" and inserting "in paragraphs (3) and 
(4)"; and 
(2) in paragraph (4) (as redesignated by subsection (c)), by 
striking "attaining" and inserting "exceeding". 
(e) REPORTS.—Section 722(f) of the Small Business Competitive-
ness Demonstration Program Act of 1988 (15 U.S.C. 644 note, 
102 Stat. 3896) is amended— 
(1) in paragraph (1), by striking "September 30, 1992" and 
inserting "September 30,1995"; and 
(2) in paragraph (2), by striking "of the fiscal years 1989, 
1990, and 1991" and inserting "fiscal year during the term 
of the program esteblished under subsection (a)". 
Subtitle B—Defense Economic Transition 
Assistance 
SEC. 211. SECTION 7(a) LOAN PROGRAM. 
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
amended by adding at the end the following new paragraph: 
"(21XA) The Administration may make loans under the authority 
of this subsection— 
"(i) to a small business concern that has been (or can reason-
ably be expected to be) detrimentally affected by— 
"(I) the closure (or substantial reduction) of a Department 
of Defense installation; or 
"(II) the termination (or substantial reduction) of a 
Department of Defense program on which such small busi-
ness was a prime contractor or subcontractor (or suppUer) 
at any tier; or 
"(ii) to a qualified individual seeking to esteblish (or acquire) 
and operate a small business concern. 
"(B) Recognizing that greater risk mav be associated with a 
loan to a small business concern described in subparagraph (AXi), 
any reasonable doubts concerning the firm's proposed business plan 
for transition to nondefense-related markets shall be resolved in 
favor of the loan applicant when making any determination regard-
ing the sound value of the proposed loan in accordance with para-
graph (6). 
"(C) Loans pursuant to this paragraph shall be authorized in 
such amoimts as provided in advance in appropriation Acts for 
the puiposes of loans under this paragraph. 
"(D) For purposes of this paragraph a qualified individual is— 
"(i) a member of the Armed Forces of the United States, 
honorably discharged from active duty involuntarily or pursu-
ant to a program providing bonuses or other inducements to 
encourage voluntary separation or early retirement; 
106 STAT. 998 
PUBLIC LAW 102-366—SEPT. 4, 1992 
"(ii) a civilian employee of the Department of Defense involim-
tarily separated from Federal service or retired pursuant to 
a program ofTering inducements to encourage early retirement; 
or 
"(iii) an employee of a prime contractor, subcontractor, or 
supplier at any tier of a Department of Defense program whose 
employment is involuntarily terminated (or voluntarily termi-
nated pursuant to a program offering inducements to encourage 
I voluntary separation or early retirement) due to the 
termination 
(or substantial reduction) of a Department of Defense pro-
gram.". 
SEC. 212. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM. 
Section 21(c)(3) of the Small Business Act (15 U.S.C. 648(cX3)) 
is amended— 
(1) by striking subparagraph (D); 
(2) by redesignating subparagraphs (E), (F), and (G) as sub-
paragraphs (D), (E), and (F), respectively; and 
(3) by inserting before subparagraph (H) the following new 
subparagraph: 
"(G) assisting small businesses to develop and implement 
r, 
strategic business plans to timely and effectively respond 
to the planned closure (or reduction) of a Department of 
Defense facility within the community, or actual or pro-
jected reductions in such firms' business base due to the 
actual or projected termination (or reduction) of a Depart-
ment of Defense program or a contract in support of such 
program— 
"(i) by developing broad economic assessments of 
the adverse impacts of— 
"(I) the closure (or reduction) of the Department 
of Defense facility on the small business concerns 
providing goods or services to such facility or to 
the military and civilian personnel currently sta-
tioned or working at such facility; and 
"(II) the termination (or reduction) of a Depart-
ment of Defense program (or contracts under such 
program) on the small business concerns partici-
pating in such program as a prime contractor, 
subcontractor or supplier at any tier; 
"(ii) by developing, in conjunction with appropriate 
Federal, State, and local governmental entities and 
other private sector organizations, the parameters of 
a transition adjustment program adaptable to the 
needs of individual small business concerns; 
"(iii) by conducting appropriate programs to inform 
the affected small business community regarding the 
anticipated adverse impacts identified under clause (i) 
and the economic adjustment assistance available to 
such firms; and 
"(iv) by assisting small business concerns to develop 
£ind implement an individualized transition business 
plan.". 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 999 
Subtitle C—Small Business Administration 
Management 
SEC. 221. DISADVANTAGED SMALL BUSINESS STATUS DECISIONS. 
15 USC 636 note. 
(a) PUBLICATION OF DECISIONS.—^A decision issued pursuant to 
section 7(jXllXFXvii) of the Small Business Act (15 U.S.C. 
636(j)(ll)(F)(vii)) shall— 
(1) be made available to the protestor, the protested party, 
the contracting officer (if not the protestor), and all other parties 
to the proceeding, and published in full text; and 
(2) include findings of fact £uid conclusions of law, with spe-
cific reasons supporting such findings or conclusions, upon each 
material issue of fact and law of decisional significance regard-
ing the disposition of the protest. 
(b) PRECEDENTIAL VALUE OF PRIOR DECISIONS.^A decision issued 
under section 70*)(ll)(F)(vii) of the Small Business Act that is 
issued prior to the date of enactment of this Act shall not have 
value as precedent in deciding any subsequent protest until such 
time as the decision is published in full text. 
SEC. 222. ESTABLISHMENT OF SIZE STANDARDS. 
(a) IN GENERAL.—Section 3(a) of the Small Business Act (15 
U.S.C. 632(a)) is amended by striking "In addition" and all that 
follows through the end period and by adding at the end the 
following new paragraphs: 
"(2) In addition to the criteria specified in paragraph (1), the 
Administrator may specify detailed definitions or standards (by 
number of employees or dollar volume of business) by which a 
business concern is to be recognized as a small business concern 
for the purposes of this Act or any other Act. Unless specifically 
authorized by statute, the Secretary of a department or the head 
of a Federal agency may not prescribe for the use of such depart-
ment or agency a size standard for categorizing a business concern 
as a small business concern, unless such proposed size standard— 
"(A) is being proposed after an opportunity for public notice 
and comment; 
"(B) provides for determining, over a period of not less than 
3 years— 
"(i) the size of a manufacturing concern on the basis 
of the number of its employees dfuring that period; and 
"(ii) the size of a concern providing services on basis 
of the average gross receipts of the concern during that 
period; and 
"(C) is approved by the Administrator. 
"(3) When establishing or approving emy size standard pursuant 
to paragraph (2), the Administrator shall ensure that the size 
standard varies from industry to industry to the extent necessary 
to reflect the differing characteristics of the various industries £uid 
consider other factors deemed to be relevant by the Administrator.". 
(b) REGULATIONS.— 
is use 632 note. 
(1) IN GENERAL.—Not later than 180 days after the date 
of enactment of this Act, the Administrator of the Small Busi-
ness Administration shall issue proposed regulations to imple-
ment the amendments made by subsection (a). Final regulations 
shall be issued not later than 270 days after such date of 
enactment. 
106 STAT. 1000 
PUBLIC LAW 102-366—SEPT. 4, 1992 
(2) LISTING OF ADDITIONAL SIZE STANDARDS.—The regulations 
required by paragraph (1) shall include a listing of all small 
business size standards prescribed by statute or by individual 
Federal departments and agencies, identifying the programs 
or purposes to which such size standards apply. 
SEC. 223. MANAGEMENT OF SMALL BUSINESS DEVELOPMENT CENTER 
PROGRAM. 
(a) Section 21(aX3) of the Small Business Act (15 U.S.C. 648) 
is amended by adding the following at the end thereof: 
"(A) Smedl business development centers are authorized to form 
an association to pursue matters of common concern. If more than 
a majority of the small business development centers which are 
operating pursuant to agreements with the Administration are 
members of such an association, the Administration is authorized 
and directed to recognize the existence and activities of such an 
association and to consult with it and develop documents (i) 
announcing the annual scope of activities pursuant to this section, 
(ii) requesting proposals to deliver assistance as provided in this 
section and (iii) governing the general operations and administra-
tion of the Small Business Development Center Program, specifi-
cally including the development of regulations and a imiform nego-
tiated cooperative agreement for use on an annual basis when 
entering into individual negotiated agreements with small business 
development centers. 
"(B) Provisions governing audits, cost principles and administra-
tive requirements for Federal grants, contracts and cooperative 
agreements which are included in uniiform requirements of Office 
of Management and Budget (0MB) Circulars shall be incorporated 
by reference and shall not be set forth in summary or other form 
in regulations.". 
I^gulations. 
(b) Not later than 180 days after the date of enactment of this 
15 Ubc b48 note. ^^.^^ ^j^^ Administrator of the Small Business Administration shall 
submit to the Committees on Small Business and the Committees 
on Appropriations of the Senate and the House of Representatives, 
proposed regulations for the Small Business Development Center 
Program authorized by section 21 of the Small Business Act (15 
U.S.C. 648). Such proposed regulations shall not be published in 
the Federal Register. 
New York. 
SEC. 224. NATIONAL SEMINAR ON SMALL BUSINESS EXPORTS. 
(a) SEMINAR.—^The Administration shall conduct a National Semi-
nar on Small Business Exports in Buffalo, New York, in connection 
with the World University Games Buffalo '93 during July, 1993, 
in order to develop recommendations designed to stimulate exports 
from small companies. The Seminar shall build upon the informa-
tion collected by the Administration through previously conducted 
regional small business trade conferences gmd the prior conference 
in the State of Washington. 
(b) ASSISTANCE BY EXPERTS.—For the purpose of ascertaining 
facts and developing policy recommendations concerning the expan-
sion of United States exports from small companies, the Seminar 
shall bring together individuals who are experts in the fields of 
international trade and small business development and representa-
tives of small businesses, associations, the labor community, aca-
demic institutions, and Federal, State and local governments. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1001 
(c) RECOMMENDATIONS CONCERNING UTILITY OF INTERNATIONAL 
CONFERENCE.—The Seminar shall specifically consider the utility 
of, and make recommendations regeirding, a subsequent Inter-
national Conference on Small Business and Trade that would— 
(1) help establish linkages between United States small busi-
ness owners and small business owners in foreign countries; 
(2) enable United States small business owners to learn 
how others organize themselves for exporting; and 
(3) foster greater consideration of small business concerns 
in the GATT and other international trade agreements to which 
the United States is a signatory. 
SEC. 225. CO-SPONSORED TRAINING. 
Section 7(b) of the Small Business Computer Security and Edu-
cation Act of 1984 (15 U.S.C. 633 note) is amended by striking 
"October 1, 1992" in the first sentence and inserting in lieu thereof 
"October 1,1994". 
SEC. 226. VIABILITY OF SECONDARY MARKETS. 
15 USC 634 note. 
The Administrator of the Small Business Administration is 
authorized and directed to take such actions in the awarding of 
contracts as is deemed necessary to assure the continued long-
term viability of the secondary markets in loans, debentures or 
other securities guaranteed by tne Administration. 
Subtitle D—^Technical Amendments 
SEC. 231. COMMISSION ON MINORITY BUSINESS DEVELOPMENT. 
(a) TERMINATION.—Section 505(f) of the Business Opportunity 
Development Reform Act of 1988 (15 U.S.C. 636 note; 102 Stat. 
3887) is amended by inserting before the period at the end "or 
September 30,1992, whichever is later". 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 15 use 636 note. 
shall apply as if it were included in the Business Opportunity 
Development Reform Act of 1988 (15 U.S.C. 636 note). 
SEC. 232. TECHNICAL CORRECTIONS. 
(a) AMENDMENTS TO SECTION 8.—Section 8 of the Small Business 
Act (15 U.S.C. 837) is amended— 
15 use 637. 
(1) in subsection (a)(1)(B), by striking the period and inserting 
a semicolon; 
(2) in subsection (a)(1)(C), by striking the period and inserting 
";and"; 
(3) in subsection (a)(6)(C)(i), by striking "to (A)" and inserting 
"to subparagraph (A)"; 
(4) in subsection (a)(6)(C)(ii), by striking "70')(10)(H)" and 
inserting "7Cj)(10)(G)"; 
(5) in subsection (a)(12)(E), by striking "to (D)" and inserting 
"to subparagraph (D)"; 
(6) by redesignating subsections (c) through (i) as subsections 
(d) through (j), respectively; 
(7) by inserting after subsection (b) the following: 
"(c) [Reserved]."; 
(8) in subsection (d)(4)(F)(ii) (as redesignated by paragraph 
(6) of this subsection), by striking "impositon" and inserting 
"imposition"; and 
106 STAT. 1002 
PUBLIC LAW 102-366—SEPT. 4, 1992 
(9) in subsection (h)(2) (as redesignated by paragraph (6) 
of this subsection), by striking "Administration" and inserting 
"Administrative", 
(b) AMENDMENTS TO SECTION 15.—Section 15 of the Small Busi-
ness Act (15 U.S.C. 644) is amended— 
(1) in subsection (c)(2)(B), by striking "Blindmade" and insert-
ing "Blind-made"; 
(2) in paragraphs (3) and (5) of subsection (k), by striking 
the semicolon and inserting a comma; 
(3) in subsection (1)(6), oy adding a period at the end; and 
(4) in subsection (m)(2)(B), by striking "requirement" and 
inserting "requirements". 
TITLE III—STUDIES AND RESOLUTIONS 
iSertoturlty 
Subtitlc A—AccBss to Surcty Bonding 
Bonding Survey 
^tP T T°<L^ cn^Vu 
SEC. 301. SHORT TITLE. 
15 UoC Dy4D 
note. 
This subtitle may be cited as the "Small Business Access to 
Surety Bonding Survey Act of 1992". 
SEC. 302. SURVEY. 
(a) IN GENERAL.—^The Comptroller General shall conduct a com-
prehensive survey of business firms, including using a questionngdre 
described in subsection (b), to obtain data on the experiences of 
such firms, and especially the experiences of small business con-
cerns, in obtaining surety bonds from corporate surety firms. 
(b) CONTENT OF SURVEY QUESTIONNAIRE.—In addition to such 
other questions as the Comptroller General deems appropriate to 
ensure a comprehensive survey under subsection (a), the question-
naire used by the Comptroller General shall include questions to 
obtain information from a surveyed business on— 
(1) the frequency with which the firm was requested to pro-
vide a corporate surety bond in fiscal year 1992; 
(2) whether the frequency with which the firm was requested 
to provide a corporate surety bond increased or decreased in 
fiscal years 1990, 1991, and 1992 and the reason for any 
increase or decrease, if known; 
(3) the frequency with which the firm provided a corporate 
surety bond in fiscal year 1992; 
(4) whether the frequency with which the firm provided a 
corporate surety bond increased or decreased in fiscal years 
1990, 1991, and 1992 and the reason for any increase or 
- 
decrease, if known; 
(5) the average size of corporate surety bonds provided by 
the firm in fiscal year 1992; 
(6) whether the average size of the corporate surety bonds 
provided by the firm increased or decreased during fiscal years 
1990, 1991, and 1992 and the reason for any increase or 
• decrease, if known; 
(7) the dollar amount of the largest corporate surety bond 
provided by the firm in fiscal year 1992; 
(8) whether the dollar amount of the largest corporate surety 
bond provided by the firm increased or decreased in fiscal 
years 1990, 1991, and 1992 and the reason for any increase 
or decrease, if known; 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1003 
(9) the dollar amount of work performed by the firm by 
type of construction owner, including the Federal Government, 
State and local governments, other public entities, and private 
entities, in each of fiscal years 1990,1991, and 1992; 
(10) the dollar amoimt of such work bonded by a corporate 
surety company for the firm by type of construction owner, 
including construction owners referred to in paragraph (9), 
for each of fiscal years 1990,1991, and 1992; 
(11) whether the firm purchased its corporate surety bonds 
through an insurance agent or directly firom a surety company; 
(12) the means used by the firm to identify its source for 
the purchase of corporate surety bonds; 
(13) the average corporate surety bond premium (expressed 
as a percentage of contract amount) paid by the firm in fiscal 
year 1992; 
(14) any increase or decrease in the average corporate surety 
bond premium (expressed as a percentage of the contract 
amount) paid by the firm in fiscal years 1990, 1991, and 1992 
and the reason for any increase or decrease, if known; 
(15) whether or not the underwriting requirements (including 
state of accounts receivable, financial procedures, need for per-
sonal indemnification, £uid requirements for collateral) changed 
in fiscal year 1990,1991, or 1992; 
(16) the nature of any changes in underwriting requirements 
experienced by the firm in fiscal years 1990, 1991, and 1992 
and the reason for any such chemiges, if known; 
(17) whether or not the source of surety bonds (a surety 
agent or company) provided reasons for such changes in under-
writing requirements and whether these reasons were provided 
orally or in writing; 
(18) whether or not the bonding capacity (total dollar amount 
and number of bonds) for the firm changed in fiscal year 1990, 
1991, or 1992; 
(19) whether or not the source of surety bonds (a surety 
agent or company) provided reasons for any changes in bonding 
capacity and whether these reasons were provided orally or 
in writing; 
(20) the services provided and advice given by the firm's 
source of corporate surety bonds in fiscal years 1990, 1991, 
and 1992; 
(21) whether or not the firm obtained a corporate surety 
bond with the assistance of a Federal program (such as the 
surety bond guarantee program of the Small Business Adminis-
tration and the bonding assistance program of the Department 
of Transportation) or a State or local program in fiscal year 
1990,1991, or 1992; 
(22) whether or not the firm used any alternative to corporate 
surety bonds (such as individual surety bonds, letters of credit, 
certificates of deposit, and government securities) in fiscal year 
1990,1991, or 1992; 
(23) if the firm has not provided any corporate surety bonds 
in fiscal year 1990, 1991, or 1992, the reasons the firm has 
not done so; 
(24) the number of times the firm has had an appUcation 
for a corporate surety bond denied in fiscal years 1990, 1991, 
and 1992, and the reason for any such denial, if known; 
106 STAT. 1004 
PUBLIC LAW 102-366—SEPT. 4, 1992 
(25) whether or not the proposed source for the corporate 
surety bond (a surety agent oi' company) provided the reasons 
for its denial of that application and wnetner that explanation 
was provided orally or in writing; 
(26) the length of time the firm has been in business; 
(27) the number of years of construction experience of the 
fiirn's officers (if a corporation), partners, or owner (if a sole 
proprietorship), and those responsible for managing the execu-
tion of the firm's construction operations, and how many years 
of such experience is in the type of construction that provides 
the majority of the firm's annual sales volume; 
(28) the approximate annual sales volume of the firm in 
fiscal years 1990,1991, and 1992; 
(29) the net worth (total assets less total Uabilities) of the 
firm at the close of the firm's most recent fiscal year; 
(30) tiie working capital (current assets less current liabil-
ities) of the firm at tne close of the firm's most recent fiscal 
year; 
(31) the average age of the firm's accounts receivable (the 
average number of days required to collect payments due); 
(32) whether the firm made a profit in fiscal year 1990, 
1991, or 1992; 
(33) the form and firequency of such firm's financial state-
ments (statements audited and certified by an independent 
certified public accountant, statements reviewed by such a cer-
tified public accountant, compilation financial statements, or 
other forms of financial statements), and whether such state-
ments were furnished with applications for bonding, if 
requested; and 
(34) the 4-digit standard industrial classification code in 
which the firm performs the majority of its work. 
(c) FIRMS TO BE SURVEYED.—The Comptroller General shall 
develop a statistically valid sample of business firms from the 
most recent list of construction firms maintained by the Dun and 
Bradstreet Company (identified as the "DUN Market Identifier" 
file) for which data regarding sales is available. 
SEC. 303. REPORT. 
(a) IN GENERAL.—Not later than 18 months after the date of 
enactment of this Act, the Comptroller (jreneral, in consultation 
with the Small Business Administration, shall conduct an assess-
ment of the data obtained in the survey conducted pursuant to 
section 302 and submit to the Committees on Small Business of 
the Senate and the House of Representatives a report on the results 
of such assessment. 
(b) CONTENTS OF THE REPORT.— 
(1) IN GENERAL.—The report required by subsection (a) shall 
contain— 
(A) a summary of responses of business firms to the 
survey conducted pursuant to section 302; and 
(B) a description of any trends found by the Comptroller 
General in such responses. 
(2) INFORMATION ON SMALL BUSINESS CONCERNS.—In present-
ing summaries of responses and descriptions of trends pursuant 
to p£U'agraph (1), the Comptroller (xeneral shall provide specific 
information on the responses and trends of small business 
concerns, small business concerns owned and controlled by 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1005 
women, and small business concerns owned and controlled by 
socially and economically disadvantaged individuals. 
SEC. 304. DEFINITIONS. 
For purposes of this subtitle— 
(1) the term "fiscal year" means the fiscal year of the business 
firm being surveyed; 
(2) the term "small business concern" has the same meaning 
as in section 3 of the Small Business Act (15 U.S.C. 632); 
(3) the term "small business concern owned and controlled 
by socially and economically disadvantaged individuals" has 
the same meaning as in section 8(dX3XC) of the Smedl Business 
Act (15 U.S.C. 637(d)(3XC)) (as redesignated by section 232(aX6) 
ofthis Act); and 
(4) the term "small business concern owned and controlled 
by women" has the same meaning as in section 127(d) of 
the Small Business Administration Reauthorization and 
Amendment Act of 1988 (15 U.S.C. 637 note). 
Subtitle B—Small Business Loan 
Secondary Market Study 
SEC. 311. SECONDARY AfARKET FOR LOANS TO SMALL BUSINESSES. 15 USC 634 note. 
(a) STUDY.—^The Secretary of the Treasury, the Director of the 
Congressional Budget Office, and the Chairman of the Securities 
and Exchange Commission, in consultation with the Administrator 
of the Small Business Administration, shall conduct a study of 
the potential benefits of, and legal, regulatory, and market-based 
barriers to, developing a secondetry market for loans to small 
businesses. The study shall include consideration o
f
— 
(1) market perceptions and the reasons for the slow develop-
ment of a secondary m£irket for loans to small businesses; 
(2) any means to standardize loan documents and underwrit-
ing for loans to small businesses relating to retail and office 
space; 
(3) the probable effects of the development of a secondary 
market for loans to small businesses on financial institutions 
and intermediaries, borrowers, lenders, real estate markets, 
and the credit markets generally; 
(4) legal and regulatory barriers that may be impeding the 
development of a secondary market for loans to small 
businesses; and 
(5) the risks posed by investments in loans to small 
businesses. 
(b) REPORT.—^Not later than 1 year after the date of enactment 
of this Act, the Secretary of the Treasury, the Director of the 
Congressional Budget Office, and the Chairman of tiie Securities 
and Exchange Commission shall transmit to the Congress a report 
on the results of the study under paragraph (1). Tlie report shall 
include recommendations for legislation to facilitate the develop-
ment of a secondary market for loans to small businesses. 
106 STAT. 1006 
PUBLIC LAW 102-366—SEPT. 4, 1992 
Subtitle C—Contract Bundling Study 
15 use 644 note. SEC. 321. CONTRACT BUNDLING STUDY. 
(a) IN GENERAL.—^The Administrator of the Small Business 
Administration, acting through the Associate Administrator for 
Procurement Assistance, shall conduct a study regarding the impact 
of the practice known as "contract bundling^' on the participation 
of small business concerns in the Federal procurement process. 
(b) PURPOSE.—In addition to such other matters as the Associate 
Administrator for Procurement Assistance deems appropriate to 
assure the conduct of a comprehensive study and the development 
of practical recommendations, the study required by subsection 
(a) shall— 
(1) identify the benefits and adverse effects of contract bim-
dling to the procuring agencies; 
(2) identify the benefits and adverse effects of contract bun-
dling on small business concerns; 
(3) examine the adequacy of the policy direction to agency 
procurement officials 
regarding the bundling of contract 
requirements; 
(4) examine the extent to which agencies have been combining 
their requirements for the procurement of goods and services 
(including construction) into solicitations requiring an offeror 
to be able to perform increasingly larger contracts covering 
' multiple and diverse elements of performance; 
(5) consider the appropriateness of the explanatory state-
ments submitted by the procuring agencies pursuant to section 
15(a) of the Small Business Act regarding bundling of contract 
requirements; and 
(6) determine whether procurement center representatives, 
small business specialists, or other agency procurement officials 
can, under existing guidance £ind authority, have the necessary 
policy direction and effective authority to make an independent 
assessment regarding a proposed bundling of contract require-
ments. 
(c) PARTICIPATION.— 
(1) IN GENERAL.—In conducting the study described in sub-
section (b), the Associate Administrator for Procurement Assist-
ance shall provide for participation by representatives of— 
(A) the Office of the Chief Counsel for Advocacy; 
(B) the Office of Federal Procurement Policy; and 
(C) the 10 Federal departments or agencies having the 
greatest dollar value of procurement awards during fiscal 
year 1991. 
(2) ADDITIONAL CONSULTATION.—In conducting the study, the 
1 Associate Administrator for Procurement Assistance shall con-
sult with representatives of orgeinizations representing small 
business government contractors and such other public and 
private entities as may be appropriate. 
Federal 
(d) SCHEDULE.—Not later than 90 days after the date of enact-
^Wication 
^^^^^ of this Act, the Associate Administrator for Procurement 
Assistance shall publish in the Federal Register a plan for the 
study required by this section. The study shall be completed not 
later than March 31,1993. 
(e) REPORT.—^Not later than May 15, 1993, the Administrator 
of the Small Business Administration shall submit a report to 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1007 
the Committees on Small Business of the Senate and the House 
of Representatives. The report shall contain the results of the 
study required by subsection (a), together with reconmiendations 
for legislative and regulatory changes to maintain small business 
participation in the Federal procurement process, as the Adminis-
trator deems appropriate. 
(f) DEFINITION.—For purposes of this section, the term "contract-
ing bundling^ or "bundling of contract requirements'* refers to the 
practice of consolidating into a single large contract sohcitation 
multiple procurement requirements that were previously solicited 
and awarded as separate smaller contracts, generally resulting 
in a contract opportunity unsuitable for award to a small business 
concern due to the diversity and size of the elements of performance 
specified and the aggregate dollar value of the anticipated award. 
Subtitle D—Resolution Regarding Small 
Business Access to Capital 
SEC. 331. SENSE OF THE CONGRESS. 
(a) FINDINGS.—The Congress finds that^-
(1) small business concerns remain a thriving and vital part 
of the economy, accounting for the majority of new jobs, new 
products, and new services created in the United States; 
(2) adequate access to either debt or equity capital is a 
critical component of smedl business formation, expansion, and 
success; 
(3) small business concerns, which represent higher degrees 
of risk in financial markets than do large businesses, are experi-
encing increased difficulties in obtaining credit; 
(4) minority-owned business enterprises have found extraor-
dinary difficulties in obtaining credit; and 
(5) demand for credit under the lo£m guareintee program 
contained in section 7(a) of the Small Business Act is insuffi-
cient to meet current demands. 
(b) SENSE OF THE CONGRESS.—It is the sense of the Congress 
that— 
(1) financial institutions should expand their efforts to pro-
vide credit to small business concerns, with special emphasis 
on minority-owned small business concerns; 
(2) legislation and regulations considered by the Congress 
should be carefully examined to ensure that small business 
concerns are not negatively impacted; and 
(3) legislation and regulations that enhance the viability of 
small business concerns, including changes in tax and health 
care policy, should be given a priority for passage by the Con-
gress. 
TITLE IV—SMALL BUSINESS 
INVESTMENT ACT AMENDMENTS 
SECTION 401. SHORT TITLE. 
This Act may be cited as the "Small Business Equity Enhance-
ment Act of 1992". 
Small Business 
Equity 
Enhancement 
Act of 1992. 
Securities. 
15 u s e 661 note. 
106 STAT. 1008 
PUBLIC LAW 102-366—SEPT. 4, 1992 
SEC. 402. LEVERAGE (MATCHING FUNDS) FORMULA. 
Section 303 of the Small Business Investment Act of 1958 (15 
U.S.C. 683) is amended— 
(1) by inserting after the word "debentures" in the first and 
sixth sentences of subsection (b) the following: "or participating 
securities"; 
(2) by striking paragraphs (1) through (3) of subsection (b) 
and inserting in lieu thereof the following: 
"(1) The total amount of debentures and participating securi-
ties that may be guaranteed by the Administration and 
outstanding from a company licensed under section 301(c) of 
this Act shall not exceed 300 per centum of the private capital 
of such company: Provided, That nothing in this paragraph 
shall require any such company that on March 31, 1993, has 
outstanding debentures in excess of 300 per centum of its 
private capital to prepay such excess: And provided 
further, 
That any such company may apply for an additional debenture 
guarantee or participating security guarantee with the proceeds 
to be used solely to pay the amount due on such maturing 
debenture, but the maturity of the new debenture or security 
shall be not later than September 30, 2002. 
"(2) After March 31, 1993, the maximum amount of outstand-
ing leverage made available to a company licensed under section 
301(c) of this Act shall be determined by the amount of such 
company's private capital— 
"(A) if the company has private capital of not more than 
$15,000,000, the total amount of leverage shall not exceed 
300 per centum of private capital; 
"(B) if the company has private capital of more than 
$15,000,000 but not more than $30,000,000, the total 
amount of leverage shall not exceed $45,000,000 plus 200 
per centum of the amount of private capital 
over 
$15,000,000; and 
"(C) if the company has private capital of more than 
$30,000,000, the total amount of leverage shall not exceed 
$75,000,000 plus 100 per centum of the amount of private 
capital over $30,000,000 but not to exceed an additional 
$15,000,000. 
"(3) Subject to the foregoing dollar and percentage limits, 
a company licensed under section 301(c) of this Act may issue 
and have outstanding both guaranteed debentures and partici-
pating securities: Provided, That the total amount of participat-
ing securities outstanding shall not exceed 200 per centum 
of private capital. 
"(4) In no event shall the aggregate amount of outstanding 
leverage of £my such company or comp£mies which are com-
monly controlled as determined by the Administration exceed 
$90,000,000, unless the Administration determines on a case 
by case basis to permit a higher amount for compsinies under 
common control and imposes such additional terms and condi-
tions as it determines appropriate to minimize the risk of 
loss to the Administration in the event of default."; 
(3) by inserting before the period at the end of subsection 
(c)(6) the following: ", except as provided in paragraph (7)"; 
and 
(4) by adding the following at the end of subsection (c): 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1009 
"(7) The Administration may guarantee debentures or may 
guarantee the pajnnent of the redemption price and prioritized 
pajnnents on participating securities under subsection (g) from 
a company operating under section 301(d) of this Act in 
amoimts above $35,000,000 but not to exceed the maximum 
amounts specified in section 303(b) subject to the following: 
"(A) The interest rate on debentures and the rate of 
prioritized payments on peirticipating securities shall be 
that specified in subsection 303(gX2) without any reduc-
tions. 
"(B) Any outstanding assistance under paragraphs (1) 
to (6) of this subsection shall be subtracted from such 
company's eligibility under section 303(bX2XA).*'. 
SEC. 403. PARTICIPATING SECURITIES. 
Section 303 of the Small Business Investment Act of 1958 (15 
U.S.C. 683) is fiirther amended by adding, the following new sub-
sections: 
"(g) In order to encourage small business investment companies 
to provide equity capital to small businesses, the Administration 
is authorized to guaremtee the payment of the redemption price 
and prioritized pa3mients on participating securities issued by such 
companies which are Ucensed pursuant to section 301(c) of this 
Act, and a trust or a pool acting on behalf of the Administration 
is authorized to purchsise such securities. Such guarsuitees and Regulations, 
purchases shall be made on such terms and conditions as the 
Administration shall establish by regulation. For purposes of this 
section, (A) the term 'participating securities' includes preferred 
stock, a preferred Umited partnership interest or a similar 
instrument, including debentures under the terms of which interest 
is payable only to the extent of earnings and (B) the term 'prioritized 
payments' includes dividends on stock, interest on qualifying deben-
tures, or priority returns on preferred limited partnership interests 
which are paid only to the extent of earnings. Participating securi-
ties guaranteed under this subsection shall be subject to the follow-
ing restrictions and limitations, in addition to such other restrictions 
and limitations as the Administration may determine: 
"(1) Participating securities shall be redeemed not later than 
15 years after their date of issuance for an amount equed 
to 100 per centum of the original issue price plus the amount 
of any accrued prioritized payment: Provided, That if, at the 
time the securities sure redeemed, whether as scheduled or 
in advance, the issuing company (A) has not paid all accrued 
prioritized payments in full as provided in paragraph (2) below 
and (B) has not sold or otherwise disposed of all investments 
subject to profit distributions pursuant to paragraph (11), the 
company's obligation to pay accrued and unpaid prioritized 
payments shall continue and payment shall be made from 
the realized gain, if any, on the disposition of such investments, 
but if on disposition there is no realized gain, the obligation 
to pay accrued and unpaid prioritized payments shall be extin-
guished: Provided further. That in the interim, the company 
shall not make any in-kind distributions of such investments 
unless it pays to the Administration such sums, up to the 
amount of the unrealized appreciation on such investments, 
as may be necessary to pay in fiiU the accrued prioritized 
payments. 
59-194 O—93 
5:QL3(Pt. 2) 
106 STAT. 1010 
PUBLIC LAW 102-366—SEPT. 4, 1992 
"(2) Prioritized payments on participating securities shall 
be preferred and cumulative and payable out of the retained 
earnings available for distribution, as defined by the Adminis-
tration, of the issuing company at a rate determined by the 
Secretary of the Treasury taking into consideration the current 
average market yield on outstanding marketable obligations 
of the United States with remaining periods to maturity com-
parable to the average maturities on such securities, adjusted 
to the nearest one-eighth of 1 per centum, plus, at the time 
the guarantee is issued, such additional charge, if any, toward 
covering other costs of the program as the Administration may 
determine to be consistent with its purposes, but not to exceed 
2 per centum. 
"(3) In the event of liquidation of the company, participating 
securities shall be senior in priority for all purposes to all 
other equity interests in the issuing company, whenever cre-
ated. 
"(4) Any company issuing a participating security under this 
subsection shall commit to invest or shall invest and maintain 
an amount equal to the outstanding face value of such security 
solely in equity capital. As used in this subsection, 'equity 
capital' means common or preferred stock or a similar 
instrument, including subordinated debt with equity features 
which is not amortized and which provides for interest pay-
ments contingent upon and limited to the extent of earnings. 
"(5) The only debt (other than leverage obtained in accordance 
with this title) which any companv issuing a participating 
security under this subsection may have outstanding shall be 
temporary debt in amounts limited to not more than 50 per 
centum of private capital. 
"(6) The Administration may permit the proceeds of a partici-
pating security to be used to pay the principal amount due 
on outstanding debentures guareuiteed by the Administration, 
if (A) the company has outstanding equity capital invested 
in an amount equal to the amount of the debentures being 
refinanced and (B) the Administration receives profit participa-
tion on such terms and conditions as it may determine, but 
not to exceed the per centums specified in paragraph (11). 
"(7) For purposes of computing profit participation under 
paragraph (11), except as otherwise determined by the Adminis-
tration, the management expenses of any company which issues 
participating securities shall not be greater than 2.5 per centum 
per annum of the combined capital of the company, plus 
$125,000 if the company's combined capital is less man 
$20,000,000. For purposes of this paragraph, (A) the term 'com-
bined capital' means the aggregate amount of private capital 
and outstanding leverage and (B) the term 'management 
expenses' includes salaries, office expenses, travel, business 
development, office and equipment rental, bookkeeping and 
the development, investigation and monitoring of investments, 
but does not include the cost of services provided by specialized 
outside consultants, outside lawyers and outside auditors, who 
perform services not generally expected of a venture capital 
company nor does such term include the cost of services pro-
vided by any affiliate of the company which are not part of 
the normal process of making and monitoring venture capital 
investments. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1011 
"(8) Notwithstanding paragraph (9), if a company is operating 
as a limited partnership or as a subchapter s corporation or 
an equivalent pass-through entity for tax purposes and if there 
are no accumulated and unpsud prioritized payments, the com-
pany may make annual distributions to the partners or share-
holders in amounts not greater them each partner's or share-
holder's maximum tax liability. For purposes of this paragraph, 
the term 'maximum tax liability means the amount of income 
allocated to each partner or shareholder (including an allocation 
to the Administration as if it were a taxpayer) for Federal 
income tax purposes in the income tax return filed or to be 
filed by the company with respect to the fiscal year of the 
company immediately preceding such distribution, multipUed 
by the highest combined marginal Federal and State income 
tax rates for corporations or individuals, whichever is higher, 
on each type of income included in such return. For purposes 
of this paragraph, the term 'State income tax' means the income 
tax of the State where the compan/s principal place of business 
is located. 
"(9) After making any distributions as provided in paragraph 
(8), a company with participating securities outstanding may 
distribute the balance of income to its investors, specifically 
including the Administration, in the per centums specified in 
paragraph (11), if there are no accumulated and unpaid 
prioritized payments and if all amounts due the Administration 
pursuant to paragraph (11) have been paid in full, subject 
to the following conditions: 
"(A) As of the date of the proposed distribution, if the 
amount of leverage outstanding is more than 200 per cen-
tum of the amount of private capital, any amounts distrib-
uted shall be made to private investors sind to the Adminis-
tration in the ratio of leverage to private capital. 
"(B) As of the date of the proposed distribution, if the 
amount of leverage outstanding is more than 100 per cen-
tum but not more than 200 per centum of the amount 
of private capital, 50 per centum of any amounts distributed 
shall be made to the Administration and 50 per centum 
shall be made to the private investors. 
"(C) If the amount of leverage outstanding is 100 per 
centum, or less, of the amount of private capital, the ratio 
shall be that for distribution of profits as provided in para-
graph (11). 
"(D) Any amounts received by the Administration under 
subparagraph (A) or (B) shall be applied first as profit 
participation as provided in paragraph (11) and any 
remainder shall be applied as a prepayment of the principal 
amount of the participating securities or debentures. 
"(10) After making £uiy distributions pursuant to paragraph 
(8), a company with participating securities outstanding may 
return capital to its investors, specifically including the 
Administration, if there are no accumulated and unpaid 
prioritized pa3anents and if all amoimts due the Administration 
pursuant to paragraph (11) have been paid in full. Any distribu-
tions under this psiragraph shall be made to private investors 
and to the Administration in the ratio of private capital to 
leverage as of the date of the proposed distribution: Provided, 
That if the amount of leverage outstanding is less than 50 
106 STAT. 1012 
PUBLIC LAW 102-366—SEPT. 4,1992 
per centum of the amount of private capital or $10,000,000, 
whichever is less, no distribution shall be required to be made 
to the Administration unless the Administration determines, 
on a case by case basis, to require distributions to the Adminis-
tration to reduce the amount of outstanding leverage to an 
amount less than $10,000,000. 
"(IIXA) A company which issues participating securities shall 
agree to allocate to the Administration a share of its profits 
determined by the relationship of its private capital to the 
amount of participating securities guaranteed by me Adminis-
tration in accordance with the following: 
"(i) If tiie total amoimt of participating securities is 100 
per centum of private capital or less, the company shall 
allocate to the Administration a per centum share com-
puted as follows: the amount of participating securities 
divided by private capital times 9 per centum. 
"(ii) If the total amount of participating securities is 
more than 100 per centum but not greater than 200 per 
centum of private capital, the company shall allocate to 
the Administration a per centum share computed as fol-
lows: 
"(I) 9 per centum, plus 
"(11) 3 per centum of the amount of participating 
securities minus private capital divided by private cap-
ital. 
"(B) Notwithstanding any other provision of this paragraph— 
"(i) in no event shall the total per centum required by 
this paragraph exceed 12 per centum, unless required 
pursuant to the provisions of (ii) below, 
"(ii) if, on the date the participating securities are mar-
keted, the interest rate on Treasury bonds with a maturity 
of 10 years is a rate other than 8 per centum, the Adminis-
tration shall adjust the rate specified in paragraph (A) 
above, either higher or lower, by the same per centum 
by which the Treasury bond rate is higher or lower than 
8 per centum, and 
"(iii) this paragraph shall not be construed to create 
any ownership interest of the Administration in the com-
pany. 
''(12) A company may elect to make an in-kind distribution 
of securities only if such securities are pubhcly traded and 
m£irketable. The company shall deposit the Administration's 
share of such securities for disposition with a trustee designated 
by the Administration or, at its option and with the agreement 
of the company, the Administration may direct the company 
to retain the Administration's share. If the company retains 
the Administration's share, it shall sell the Administration's 
share and promptly remit the proceeds to the Administration. 
As used in this paragraph, the term trustee' means a person 
who is knowledgeable about and proficient in the marketing 
of thinly traded securities, 
"(h) The computation of amounts due the Administration under 
participating securities shall be subject to the following terms and 
conditions: 
"(1) The formula in subsection (gXll) shall be computed 
annually and the Administration shall receive distributions 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1013 
of its profit participation at the same time as other investors 
in the company. 
"(2) The formula shall not be modified due to an increase 
in the private capital unless the increase is provided for in 
a proposed business plan submitted to and approved by the 
A(uninistration. 
"(3) Afi^er distributions have been made, the Administration's 
share of such distributions shall not be recomputed or reduced. 
"(4) If the company prepays or repays the participating securi-
ties, the Administration shall receive the requisite participation 
upon the distribution of profits due to any investments held 
by the company on the date of the repajnnent or prepayment. 
"(5) If a company is Ucensed on or before March 31, 1993, 
it may elect to exclude froza profit participation all investments 
held on that date and in such case the Administration shall 
determine the amount of the future expenses attributable to 
such prior investment: Provided, That if the company issues 
participating securities to refinance debentures as authorized 
m subsection (gX6), it may not elect to exclude profits on 
existing investments under this paragraph.". 
SEC. 404. POOLING. 
Section 321 of the Small Business Investment Act of 1958 (15 
U.S.C. 6871) is amended to read as follows: 
"SEC. 321. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES. 
"(a) The Administration is authorized to issue trust certificates 
representing ownership of all or a firactional part of debentures 
issued by small business investment companies, including compa-
nies operating under the authority of section 301(d), and guaranteed 
by the Administration under this Act, or participating securities 
which are issued by such companies and purchased and guaranteed 
pursuant to section 303(g): Provided, That such trust certificates 
shall be based on and backed by a trust or pool approved by 
the Administration and composed solely of guaranteed debentures 
or guaranteed participating securities. 
"(b) The Administration is authorized, upon such terms and condi-
tions as are deemed appropriate, to guarantee the timely payment 
of the principal of and interest on trust certificates issued by the 
Administration or its agent for purposes of this section. Such 
guarantee shall be limited to the extent of principal and interest 
on the guaranteed debentures or the redemption price of and prior-
ity pa3mients on the participating securities, which compose the 
trust or pool. In the event that a debenture in such trust or 
pool is prepaid, or peirticipating securities are redeemed, either 
voluntarily or involuntarily, or in the event of default of a debenture 
or voluntary or involuntary redemption of a participating security, 
the guarantee of timely pajnnent of principal and interest on the 
trust certificates shall be reduced in proportion to the amount 
of principal and interest such prepaid debenture or redeemed 
participating security and priority payments represent in the trust 
or pool. Interest on prepaid or defaulted debentures, or priority 
payments on participating securities, shall accrue and be guaran-
teed by the Administration only through the date of payment on 
the guarantee. During the term of the trust certificate, it may 
be csdled for redemption due to prepajnoient or default of all deben-
tures or redemption, whether voluntary or involuntary, of all partici-
pating securities residing in the pool. 
106 STAT. 1014 
PUBLIC LAW 102-366—SEPT. 4, 1992 
**(c) The full faith and credit of the United States is pledged 
to the payment of all amounts which may be required to be paid 
under any guarantee of such trust certificates issued by the 
Administration or its agent pursuant to this section. 
"(d) The Administration shall not collect a fee for any guarantee 
under this section: Provided, That nothing herein shall preclude 
any agent of the Administration from collecting a fee approved 
by the Administration for the functions described in subsection 
(1X2) of this section. 
"(eXD In the event the Administration pays a claim under a 
guarantee issued under this section, it shall be subrogated fully 
to the rights satisfied by such payment. 
"(2) No State or local law, and no Federal law, shall preclude 
or limit the exercise by the Administration of its ownership rights 
in the debentures or participating securities residing in a trust 
or pool against which trust certificates are issued. 
(fXD The Administration shall provide for a central registration 
of all trust certificates sold pursuant to this section. Such central 
registration shall include with respect to each sale— 
"(A) identification of each small business investment com-
pany; 
"(B) the interest rate or prioritized pajrment rate paid by 
the small business investment company; 
"(C) commissions, fees, or discounts paid to brokers and 
dealers in trust certificates; 
"(D) identification of each purchaser of the trust certificate; 
"(E) the price paid by the purchaser for the trust certificate; 
"(F) the interest rate on the trust certificate; 
"(G) the fee of any agent for carrying out the functions 
described in paragraph (2); and 
"(H) such other information as the Administration deems 
appropriate. 
"(2) The Administrator shall contract with an agent or agents 
to carry out on behalf of the Administration the pooling and the 
central registration functions of this section including, notwith-
standing any other provision of law, maintenance on behalf of 
and under the direction of the Administration, such commercial 
bank accounts as may be necessary to facilitate trusts or pools 
backed by debentures or participating securities guaranteed under 
this Act, and the issuance of trust certificates to facilitate such 
poolings. Such agent or agents shall provide a fidelity bond or 
insureuice in such amoiuits as the Administration determines to 
be necessary to fully protect the interests of the Government. 
"(3) Prior to any sale, the Administrator shall require the seller 
to (Usclose to a purchaser of a trust certificate issued pursuant 
to this section, information on the terms, conditions, and yield 
of such instrument. 
"(4) The Administrator is authorized to regulate brokers and 
dealers in trust certificates sold pursuant to this section.". 
SEC. 40S. AUTHORIZATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended— 
(1) by striking in subsection (gX3) "stock and $221,000,000 
in guarantees of debentures" and inserting in lieu thereof the 
following: "securities, $221,000,000 in guarantees of debentures, 
of which $40,000,000 is authorized in guarantees of debentures 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1015 
from companies operating pursuant to section 301(d) of such 
Act, and $100,000,000 in guarantees of participating securities"; 
(2) by striking in subsection (iX3) '^stock and $232,000,000 
in guarantees of debentures" and inserting in lieu thereof the 
foUoAwing: "securities, $232,000,000 in guarantees of debentures, 
of which $42,000,000 is authorized in guarantees of debentures 
from companies operating pursuant to section 301(d) of such 
Act, and $250,000,000 in guarantees of participating securities"; 
and 
(3) by adding the following new subsections at the end 
thereof: 
"(k) The following program levels are authorized for fiscal year 
1995: 
"(1) For the programs authorized by title III of the Small 
Business Investment Act of 1958, the Administration is author-
ized to make $23,000,000 in purchases of preferred securities, 
$244,000,000 in guarantees of debentures, of which $44,000,000 
is authorized in guarantees of debentures from companies 
operating pursuant to section 301(d) of such Act, and 
$400,000,000 in guaremtees of participating securities. 
"(1) There are authorized to be appropriated to the Administration 
for fiscal year 1995 such sums as may be necessary to carry out 
subsection (k), including salaries and expenses of the Administra-
tion. 
"(m) The following program levels are authorized for fiscal year 
1996: 
"(1) For the programs authorized by title III of the Small 
Business Investment Act of 1958, the Administration is author-
ized to make $24,000,000 in purchases of preferred securities, 
$256,000,000 in guarantees of^debentures, of which $46,000,000 
is authorized in guarantees of debentures from companies 
operating pursuant to section 301(d) of such Act, and 
$550,000,000 in guarantees of participating securities, 
"(n) There are authorized to be appropriated to the Administration 
for fiscal year 1996 such sums as may be necessary to carry out 
subsection (m), including salaries and expenses of the Administra-
tion. 
"(o) The following program levels are authorized for fiscal year 
1997: 
"(1) For the programs authorized by title III of the Small 
Business Investment Act of 1958, the Administration is author-
ized to make $25,000,000 in purchases of preferred securities, 
$268,000,000 in guarantees of debentures, of which $48,000,000 
is authorized in guarantees of debentures from companies 
operating pursuant to section 301(d) of such Act, and 
$700,000,000 in guareuitees of participating securities, 
"(p) There are authorized to be appropriated to the Administration 
for fiscal year 1997 such sums as may be necessary to carry out 
subsection (o), including salaries and expenses of the Administra-
tion.". 
SEC. 406. SAFETY AND SOUNDNESS. 
(a) FINANCIAL VIABILITY DETERMINED.—Section 302 of the Small 
Business Investment Act of 1958 (15 U.S.C. 682) is amended by 
adding the following at the end of subsection (a): 'The Administra-
tion shall also determine the ability of the company, both prior 
to Ucensing and prior to approving any request for financing, to 
106 STAT. 1016 
PUBLIC LAW 102-366—SEPT. 4, 1992 
make periodic pa)Tnents on any debt of the company which is 
interest bearing and shedl take into consideration the income which 
the company anticipates on its contemplated investments, the 
experience of the company's owners and managers, the history 
of the company as an entity, if any, and the company's financial 
resources.". 
(b) VALUATION GUIDELINES AND RESPONSIBILITY.—-Section 310 of 
the Small Business Investment Act of 1958 (15 U.S.C. 687b) is 
amended by adding at the end thereof the following new subsection: 
"(d) Each small business investment company shall adopt written 
guidelines for determination of the value of investments made by 
such company. The bo£ird of directors of corporations and the gen-
eral partners of partnerships shall have the sole responsibility 
for making a good faith determination of the fair market value 
of the investments made by such company. Determinations shall 
be made and reported to the Administration not less than semiannu-
ally or at more frequent intervals as the Administration determines 
appropriate: Provided, That any company which does not have 
outstanding financial assistance under the provisions of this title 
shall be required to make such determinations and reports to the 
Administration annually, unless the Administration, in its discre-
tion, determines otherwise.". 
SEC. 407. EXAMINATIONS. 
(a) EXAMINATION BY INVESTMENT DIVISION.—Section 310 of the 
Small Business Investment Act of 1958 (15 U.S.C. 687b) is amended 
by striking from subsection (b) "Administration by examiners 
selected or approved by" and by inserting in lieu thereof the follow-
ing: "Investment Division of. 
Effective date. 
(b) TRANSFER OF RESOURCES.—Effective October 1, 1992, the 
iLY^ ^^^ 
personnel, assets, liabilities, contracts, property, records, and unex-
pended balances of appropriations, authorizations, and other funds 
employed, held, used, arising from, available or to be made avail-
able, which are related to the examination function provided by 
section 310 of the Small Business Investment Act of 1958 shall 
be transferred by the Inspector General of the Small Business 
Administration to the Investment Division of the Small Business 
Administration. 
SEC. 408. NON-FINANCED SBICS. 
(a) INVESTMENT LIMITATION.—Section 306(a) of the Small Busi-
ness Investment Act of 1958 (15 U.S.C. 686(a)) is amended to 
read as follows: 
"(a) If any small business investment company has obtained 
financing fi:om the Administration and such financing remains 
outstanmng, the aggregate amount of obligations and securities 
acquired and for which commitments may be issued by such com-
pany under the provisions of this title for any single enterprise 
shall not exceed 20 per centum of the private capital of such 
compgmy, without the approval of the Administration.". 
(b) CONFORMING AMENDMENT.—Section 310 of the Small Business 
Investment Act of 1958 (15 U.S.C. 687b) is amended by inserting 
before the semicolon at the end of subsection (c)(5) the following: 
", if such restriction is applicable". 
(c) TEMPORARY INVESTMENT OF FUNDS.—Section 308(b) of the 
Small Business Investment Act of 1958 (15 U.S.C. 687(b)) 
is amended by inserting after "Such companies" in the third sen-
tence the following: "with outstanding finemcings". 
note. 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1017 
(d) REGULATORY REVIEW.—Not later than 90 days after the effec- 15 use 681 
tive date of this Act, the Small Business Administration shall ^°^-
complete a review of those regulations intended to provide for 
the safety and soundness of those small business investment compa-
nies which obtain financing from the Administration under the 
provisions of the Small Business Investment Act of 1958. The 
Administration is directed to exempt from such regulations, or 
to separately regulate, those companies which do not obtain financ-
ing from the Administration. 
(e) REPORT TO CONGRESS.—The Administration, within 180 days is use 681 
after the efFective date of this Act, shall report on actions taken ^°*** 
pursuant to section 8(d) of this Act to the Committees on Smedl 
Business of the Senate and the House of Representatives, including 
the rationale for its actions. 
SEC. 409. MIMMUM CAPITAL. 
Section 302 of the Smedl Business Investment Act of 1958 (15 
U.S.C. 682) is amended by striking from subsection (a) "1979 pursu-
ant to sections 301(c) and (d) of this Act shall be not less than 
$500,000" and inserting in lieu thereof the following: "1992 pursuant 
to section 301(c) of this title shall be not less than $2,500,000 
and pursuant to section 301(d) of this title shall be not less than 
$1,500,000". 
SEC. 410. DEFINITIONS. 
Section 103 of the Small Business Investment Act of 1958 (15 
U.S.C. 662) is amended as follows: 
(1) by striking "and" at the end of paragraph (7); 
(2) by striking the period at the end of p£u-agraph (8) and 
inserting in heu thereof a semicolon; and 
(3) by adding at the end the following new paragraphs: 
"(9) notwithstanding any other provision of law, the term 
'private capital' means the private paid-in capital and paid-
in surplus of a corporate licensee, or the private partnership 
capital of an unincorporate licensee, inclusive of (A) any funds 
invested in the Ucensee by a public or private pension fund, 
(B) any fiinds invested in the licensee by State or local govern-
ment entities, to the extent that such investment does not 
exceed 33 percent of a Ucensee's total private capital and other-
wise meets criteria established by the Administration, and (C) 
unfunded commitments from institutional investors that meet 
criteria estabUshed by the Administration, but it excludes any 
funds which are borrowed by the licensee from any source 
or which are obtained or derived, directly or indirectly, from 
any Federed source, including the Administration: Provided, 
That no unfunded commitment from an institutional investor 
may be used for the purpose of meeting the minimum amount 
of private capital required by this Act or as the basis for 
the Administration to issue obligations to provide financing; 
and 
"(10) the term leverage' includes debentures purchased or 
guaranteed by the Administration, participating securities pur-
chased or guaranteed by the Administration, or preferred secu-
rities issued by companies licensed under section 301(d) of 
this Act and which have been purchased by the Administra-
tion.". 
106 STAT. 1018 
PUBLIC LAW 102-366—SEPT. 4, 1992 
Federal 
Renter, 
publication. 
Regulations. 
15 use 661 
note. 
SEC. 411. INTEREST RATE CEILING. 
Section 305 of the Small Business Investment Act of 1958 (15 
U.S.C. 685) is amended by striking the period at the end of sub-
section (c) and by inserting in lieu thereof the following: ": Provided, 
That the Administration also shall permit those companies which 
have issued debentures pursuant to this Act to charge a maximum 
rate of interest based upon the coupon rate of interest on the 
outstanding debentures, determined on an annual basis, plus such 
other expenses of the company as may be approved by the Adminis-
tration.". 
SEC. 412. PREFERRED PARTNERSHIP INTERESTS. 
Section 303(c) of the Small Business Investment Act of 1958 
(15 U.S.C. 683(c)) is amended— 
(1) by striking from the first sentence the word "preferred"; 
(2) by inserting after the second sentence the following: "As 
used in this subsection, the term 'securities' means shares 
of nonvoting stock or other corporate securities or limited part-
nership interests which have similar characteristics."; and 
(3) by striking from paragraph (1) "shares of nonvoting stock 
(or other corporate securities having similar characteristics)" 
and inserting in Ueu thereof "such securities". 
SEC. 413. INDIRECT FUNDS FROM STATE OR LOCAL GOVERNMENTS. 
Section 303(e) of the Small Business Investment Act of 1958 
(15 U.S.C. 683(e)) is amended— 
(1) by inserting after the word "company" the following: 
"Ucensed under section 301(d) and notwithstanding section 
103(9)"; and 
(2) by striking "prior" and all that follows through the period 
at tiie end and inserting "to November 21, 1989: Provided, 
That such companies may include in private capital for any 
purpose funds indirectly obtained from State or local govern-
ments. As used in this subsection, the term 'capital indirectly 
obtained' includes income^ generated by a State financing 
authority or similar State institution or agency or from the 
investment of State or local money or amounts originally pro-
vided to nonprofit institutions or corporations which such 
institutions or corporations, in their discretion, determine to 
invest in a company Ucensed under section 301(d).". 
SEC. 414. SBIC APPROVALS. 
Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended by adding the following at the end of subsection (a)(2): 
"Subject tb approval in appropriations Acts, amounts authorized 
for prefm-ed securities, debentures or participating securities under 
title III of the Small Business Investment Act of 1958 may be 
obligated in one fiscal year and disbursed or guaranteed in the 
following fiscal year.". 
SEC. 415. IMPLEMENTATION. 
Notwithstanding any law, rule, regulation or administrative 
moratorium, except as otherwise expressly provided in this Act, 
tiie Small Business Administration shall— 
(1) within 90 days after the date of enactment of this Act, 
pubUsh in Uie Federal Register proposed rules and regulations 
implementing this Act and the amendments made by this Act; 
and 
PUBLIC LAW 102-366—SEPT. 4, 1992 
106 STAT. 1019 
(2) within 180 days after the date of enactment of this Act, 
pubUsh in the Federal Register final rules and regulations 
implementing this Act, and enter such contracts as are nec-
essary to implement this Act and the amendments made by 
this Act. 
SEC. 416. BUY AMERICA. 
Section 102 of the Small Business Investment Act of 1958 (15 15 use 661. 
U.S.C. 1661) is amended by adding at the end the following: "It 
is the intention of the Congress mat in the award of financial 
assistance under this Act, when practicable, priority be accorded 
to small business concerns whicn lease or purchase equipment 
and suppUes which are produced in the United States ana that 
small business concerns receiving such assistance be encouraged 
to continue to lease or purchase such equipment and supplies.". 
SEC. 417. STUDIES AND REPORTS. 
(a) SBA A
N
h
f
U
A
L REPORT.—Section 308(g) of the Small Business 
Investment Act of 1958 (12 U.S.C. 687(g)) is amended by adding 15 use 687. 
at the end the following new paragraph: 
"(3) In its annual report for the year ending on December 31, 
1993, and in each succeeding annual report made pursuant to 
section 10(a) of the Small Business Act, tne Administration shall 
include a full and detailed description or account relating to— 
"(A) the number of small business investment companies 
the Administration licensed, the number of licensees that have 
been placed in liquidation, and the number of licensees that 
have surrendered their licenses in the previous year, identifying 
the amount of government leverage each has received and 
the type of leverage instruments each has used; 
"(B) the amount of government leverage that each licensee 
received in the previous year £md the types of leverage 
instruments each licensee used; 
"(C) for each type of finguicing instrument, the sizes, 
geographic locations, and other characteristics of the small 
business investment companies using them, including the 
extent to which the investment companies have used the lever-
age from each instrument to make small business loans, equity 
investments, or both; and 
"(D) the frequency with which each type of investment 
instrument has been used in the current year and a comparison 
of the current year with previous years.". 
(b) REPORT OF THE COMPTROLLER GENERAL.—Not later than 4 i5use68i 
years after the date of enactment of this Act, the Comptroller "
o
*
®
-
Genersd of the United States shall transmit to the Committees 
on Small Business of the House of Representatives and the Senate 
a report that reviews the Small Business Investment Company 
program (established under the Small Business Investment Act 
of 1958) for the 3-year period following the date of enactment 
of this Act, with respect to each item listed in section 308(gX3) 
of the Small Business Investment Act of 1958, as amended by 
subsection (a). 
SEC. 418. NO EFFECT ON SECURITIES LAWS. 
15 USC 661 
Nothing in this Act (and no amendment made by this Act) shall 
be construed to affect the applicability of the securities laws, as 
that term is defined in section 3(aX47) of the Securities Exch£uige 
Act of 1934, or any of the rules and regulations thereunder, or 
106 STAT. 1020 
PUBLIC LAW 102-366—SEPT. 4, 1992 
otherwise supersede or limit the jurisdiction of the Securities and 
Exchange Commission or the authority at any time conferred under 
the securities laws. 
Approved September 4, 1992. 
LEGISLATIVE HISTORY—H.R. 4111: 
HOUSE REPORTS: No. 102-492 (Comm. on Small Business). 
CONGRESSIONAL RE(X)RD, Vol. 138 (1992): 
May 14, considered and passed House. 
Aug. 6, considered and passed Senate, amended. 
Aug. 11, House concurred in Senate amendments with an amendment. 
Aug. 12, Senate concurred in House amendment. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 28 (1992): 
Sept. 4, Presidential statement.