Small Business Administration Reauthorization and Amendments Act of 1994
PL 103-403 (S.2060), enacted 10/22/1994

PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4175 
Public Law 103-403 
103d Congress 
An Act 
To amend the Small Business Act and the Small Business Investment Act of 
Oct. 22,1994 
1958, and for other purposes. 
[S. 2060] 
Be it enacted 
by the Senate 
and House 
of Representatives 
of 
the United States of America 
in Congress assembled. 
Small Business 
, 
• 
Administration 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
Reauthorization 
(a) SHORT TITLE.—^This Act may be cited as the "Small Business 
Amendments 
Administration Reauthorization and Amendments Act of 1994". 
Act of 1994. 
(b) TABLE OF CONTENTS.—The table of contents for this Act is use 631 note, 
is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—AUTHORIZATIONS 
Sec. 101. Authorizations. 
TITLE II—FINANCIAL ASSISTANCE PROGRAMS 
Sec. 201. Microloan financing pilot. 
Sec. 202. Eligibility of Native American Tribal Governments to be microloan 
intermediaries. 
Sec. 203. Microloan program extension. 
Sec. 204. Microloan program funding and State limitations. 
Sec. 205. Distribution of intermediaries. 
Sec. 206. Microloan intermediary loan limitation. 
Sec. 207. Microloan technical assistance to nonborrowers. 
Sec. 208. Microloan technical assistance grants for intermediaries serving economi-
cally distressed areas. 
Sec. 209. Loans to exporters. 
Sec. 210. Working capital international trade loans. 
Sec. 211. Guarantees on international trade loans. 
Sec. 212. Accredited lenders program. 
Sec. 213. Interest rate on certified development coinpany loans. 
Sec. 214. Certifications of eligibility for SBIC and SSBIC financing. 
Sec. 215. Participating securities for smaller SBICs. 
Sec. 216. Report on SBIC program. 
Sec. 217. Premier Certified Lenders Program. 
TITLE III—SIZE STANDARDS AND BOND GUARANTEES 
Sec. 301. Establishment of size standards. 
Sec. 302. Pilot preferred surety bond guarantee program extension. 
Sec. 303. Manufacturing contracts through manufacturing application and edu-
cation centers. 
Sec. 304. Pilot program for very small business concerns. 
Sec. 305. Handicapped workshop participation in small business set aside con-
tracts. 
TITLE IV—BUSINESS DEVELOPMENT ASSISTANCE 
Subtitle A—General Provisions 
Sec. 401. Sunset on cosponsored training. 
Sec. 402. Small business development center program level. 
108 STAT. 4176 
PUBLIC LAW 103-403—OCT. 22, 1994 
Grants. 
Contracts. 
Loans. 
Sec. 403. Federal contracts with small business development centers. 
Sec. 404. Small business development center program examination and certifi-
cation. 
Sec. 405. Central European small business development. 
Sec. 406. Mobile resource center pilot pro-am. 
Sec. 407. Information concerning franchising. 
Subtitle B—Development of Woman-Owned Businesses 
Sec. 411. Extension of authority for demonstration projects. 
Sec. 412. Establishment of Office of Women's Business Ownership. 
Sec. 413. Development of women's business enterprise. 
Sec. 414. Transition reimbursement. 
Sec. 415. Gift authority. 
Sec. 416. Conforming amendment. 
TITLE V—RELIEF FROM DEBENTURE PREPAYMENT PENALTIES 
Sec. 501. Short title. 
Sec. 502. Intention of Congress. 
Sec. 503. Prepayment of development company debentures. 
TITLE VI—MISCELLANEOUS AMENDMENTS 
Sec. 601. SB 
A interest payments to Treasury. 
Sec. 602. Imposition of Tees. 
Sec. 603. Job creation and community benefit. 
Sec. 604. Microloan program amendments. 
Sec. 605. Technical clarification. 
Sec. 606. Study and data base: guaranteed business loan program and development 
company program. 
Sec. 607. SBIR vendors. 
Sec. 608. Program extension. 
Sec. 609. Prohibition on the use of funds for individuals not lawfully within the 
United States. 
Sec. 610. Office of Advocacy employees. 
Sec. 611. Prohibition on the provision of assistance. 
Sec. 612. Certification of compliance with child support obligations. 
Sec. 613. Advocacy study of paperwork and tax impact. 
TITLE I—AUTHORIZATIONS 
SEC. 101. AUTHORIZATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 note) 
is amended by striking subsections (k) (as added by section 405(3) 
of the Small Business Credit and Business Opportunity Enhance-
ment Act of 1992) through (p) and inserting the following: 
"(1) The following program levels are authorized for fiscal year 
1995: 
"(1) For the programs authorized by this Act, the Adminis-
tration is authorized to make— 
"(A) $45,000,000 in technical assistance grants as pro-
vided in section 7(m); and 
"(B) $130,000,000 in direct and immediate participation 
loans, and of such sum, the Administration is authorized 
to make— 
"(i) not more than $10,000,000 in loans, as pro-
vided in section 7(a)(10); and 
"(ii) not more than $120,000,000 in loans, as pro-
vided in section 7(m). 
"(2) For the programs authorized by this Act, the Adminis-
tration is authorized to make $13,420,000,000 in deferred 
participation loans £uid other financings. Of such sum, the 
Administration is authorized to make— 
"(A) $9,150,000,000 in genergd business loans as pro-
vided in section 7(a); 
-y^l^:^' 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4177 
"(B) $2,250,000,000 in financings as provided in section 
7(a)(13) and section 504 of the Small Business Investment 
Act of 1958; 
"(C) $2,000,000,000 in loans as provided in section 
7(a)(21); and 
"(D) $20,000,000 in loans as provided in section 7(m). 
"(3) For the programs authorized by title III of the Small 
Business Investment Act of 1958, the Administration is author-
ized to make— 
"(A) $23,000,000 in purchases of preferred securities; 
"(B) $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 
"(C) $400,000,000 in guaremtees of participating securi-
ties. 
"(4) For the programs authorized by part B of title IV 
of the Small Business Investment Act of 1958, the Administra-
tion is authorized to enter into guarantees not to exceed 
$1,800,000,000, of which not more than $600,000,000 may be 
in bonds approved pursuant to the provisions of section 
411(a)(3) of such Act. 
"(5) The Administration is authorized to make grants or 
enter into cooperative agreements— 
"(A) for the Service Corps of Retired Executives pro-
gram authorized by section 8(b)(1), $3,500,000; 
"(B) for the Small Business Institute program author-
ized by section 8(b)(1), $3,000,000; and 
"(C) for activities of small business development cen-
ters pursuant to section 21(c)(3)(G), $5,000,000, to remain 
available until expended. 
"(m)(l) There are authorized to be appropriated to the Adminis- Appropriations 
tration for fiscal year 1995 such sums as may be necessary to authorization, 
carry out the provisions of this Act, including administrative 
expenses and necessary loan capital for disaster loans pursuant 
to section 7(b), and to carry out the provisions of the Small Business 
Investment Act of 1958, including salaries and expenses of the 
Administration. 
"(2) Notwithstanding paragraph (1), for fiscal year 1995— 
"(A) no funds are authorized to be provided to carry out 
the loan program authorized by section 7(a)(21) except by trans-
fer from another Federal department or agency to the Adminis-
tration, unless the program level authorized for general busi-
ness loans under subsection (1)(2)(A) is fully funded; and 
"(B) the Administration may not approve loans on behalf 
of the Administration or on behalf of any other department 
or agency, by contract or otherwise, under terms and conditions 
other than those specifically authorized under this Act or the 
Small Business Investment Act of 1958, except that it may 
approve loans under section 7(a)(21) of this Act in gross 
amounts of not more than $1,250,000. 
"(n) The following program levels are authorized for fiscal year 
1996: 
"(1) For the programs authorized by this Act, the Adminis-
tration is authorized to make— 
"(A) $65,000,000 in technical assistance grants as pro-
vided in section 7(m); and 
108 STAT. 4178 
PUBLIC LAW 103-403—(XJT. 22, 1994 
"(B) $191,000,000 in direct and immediate participation 
loans, and of such sum, the Administration is authorized 
to make— 
"(i) $11,000,000 in loans, as provided in section 
7(a)(10); and 
"(ii) $180,000,000 in loans, as provided in section 
7(m). 
"(2) For the programs authorized by this Act, the Adminis-
tration is authorized to make $15,680,000,000 in deferred 
participation loans and other financings. Of such sum, the 
Administration is authorized to make— 
"(A) $10,500,000,000 in general business loans as pro-
vided in section 7(a); 
"(B) $2,650,000,000 in financings as provided in section 
7(a)(13) and section 504 of the Small Business Investment 
Act of 1958; 
"(C) $2,500,000,000 in loans as provided in section 
7(a)(21); and 
"(D) $30,000,000 in loans as provided in section 7(m). 
"(3) For the programs authorized by title III of the Small 
Business Investment Act of 1958, the Administration is author-
ized to make— 
"(A) $24,000,000 in purchases of preferred securities; 
"(B) $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; £ind 
"(C) $650,000,000 in guarantees of participating securi-
ties. 
"(4) For the programs authorized by part B of title IV 
of the Small Business Investment Act of 1958, the Administra-
tion is authorized to enter into guarantees not to exceed 
$1,900,000,000, of which not more than $625,000,000 may be 
in bonds approved pursuant to the provisions of section 
411(a)(3) of such Act. 
"(5) The Administration is authorized to m£ike grants or 
enter cooperative agreements— 
"(A) for the Service Corps of Retired Executives pro-
gram authorized by section 8(b)(1), $3,700,000; 
"(B) for the Small Business Institute program author-
ized by section 8(b)(1), $3,200,000; and 
. "(C) for activities of small business development cen-
ters pursuant 
to section 21(c)(3)(G), not to exceed 
$10,000,000, to remain available until expended. 
Appropriations 
"(o)(l) There are authorized to be appropriated to the Adminis-
authorization. 
tration for fiscal year 1996 such sums as may be necessary to 
carry out the provisions of this Act, including administrative 
expenses and necessary loan capital for disaster loans pursuant 
to section 7(b), and to carry out the provisions of the Small Business 
Investment Act of 1958, including salaries and expenses of the 
Administration. 
"(2) Notwithstanding paragraph (1), for fiscal year 1996— 
"(A) no funds are authorized to be provided to carry out 
the loan program authorized by section 7(a)(21) except by trans-
fer from another Federal department or agency to the Adminis-
tration, unless the program level authorized for general busi-
ness loans under subsection (n)(2)(A) is fully funded; and 
;—«s,s-,-
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4179 
"(B) the Administration may not approve loans on behalf 
of the Administration or on behalf of any other department 
or agency, by contract or otherwise, under terms and conditions 
other than those specifically authorized under this Act or the 
Small Business Investment Act of 1958, except that it may 
approve loans under section 7(a)(21) of this Act in gross 
amounts of not more than $1,250,000. 
"(p) The following program levels are authorized for fiscal year 
1997: 
"(1) For the programs authorized by this Act, the Adminis-
tration is authorized to make— 
"(A) $98,000,000 in technical assistance grants as pro-
' 
vided in section 7(m); and 
"(B) $262,000,000 in direct and immediate participation 
loans, and of such sum, the Administration is authorized 
to make— 
"(i) $12,000,000 in loans, as provided in section 
7(a)(10);and 
"(ii) $250,000,000 in loans, as provided in section 
7(m). 
"(2) For the programs authorized by this Act, the Adminis-
tration is authorized to make $19,390,000,000 in deferred 
participation loans and other financings. Of such sum, the 
Administration is authorized to make— 
"(A) $13,100,000,000 in general business loans as pro-
vided in section 7(a); 
"(B) $3,250,000,000 in financings as provided in section 
7(a)(13) and section 504 of the Small Business Investment 
Act of 1958; 
"(C) $3,000,000,000 in loans as provided in section 
7(a)(21);and 
"(D) $40,000,000 in loans as provided in section 7(m). 
"(3) For the programs authorized by title III of the Small 
Business Investment Act of 1958, the Administration is author-
ized to make— 
"(A) $25,000,000 in purchases of preferred securities; 
"(B) $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 
"(C) $900,000,000 in guarantees of participating securi-
ties. 
"(4) For the programs authorized by part B of title IV 
of the Small Business Investment Act of 1958, the Administra-
i 
tion is authorized to enter into guarantees not to exceed 
$2,000,000,000, of which not more than $650,000,000 may be 
in bonds approved pursuant to the provisions of section 
411(a)(3) of such Act. 
"(5) The Administration is authorized to make grants or 
enter cooperative agreements— 
' (A) for the Service Corps of Retired Executives pro-
gram authorized by section 8(b)( 1), $3,900,000; 
"(B) for the Small Business Institute program author-
ized by section 8(b)(1), $3,400,000; and 
"(C) for activities of small business development cen-
ters 
pursuant 
to section 21(c)(3)(G), not to exceed 
$15,000,000, to remain available until expended. 
108 STAT. 4180 
PUBLIC LAW 103-403—OCT. 22, 1994 
"(q)(l) There are authorized to be appropriated to the Adminis-
tration for fiscal year 1997 such sums as may be necessary to 
carry out the provisions of this Act, including administrative 
expenses and necessary loan capital for disaster loans pursuant 
to section 7(b), and to carry out the provisions of the Small Business 
Investment Act of 1958, including salaries and expenses of the 
Administration. 
"(2) Notwithstanding paragraph (1), for fiscal year 1997— 
"(A) no funds are authorized to be provided to carry out 
the loan program authorized by section 7(a)(21) except by trans-
fer from another Federal department or agency to the Adminis-
tration, unless the program level authorized for general busi-
ness loans under subsection (p)(2)(A) is fully funded; and 
"(B) the Administration may not approve loans on behalf 
of the Administration or on behalf of any other department 
or agency, by contract or otherwise, under terms and conditions 
other than those specifically authorized under this Act or the 
Small Business Investment Act of 1958, except that it may 
approve loans under section 7(a)(21) of this Act in gross 
amounts of not more than $1,250,000.". 
TITLE II—FINANCIAL ASSISTANCE 
PROGRAMS 
SEC. 201. MICROLOAN FINANCING PILOT. 
Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
is amended by adding at the end the following new paragraph: 
"(12) DEFERRED PARTICIPATION LOAN PILOT.—In lieu of mak-
ing direct loans to intermediaries as authorized in paragraph 
(1)(B), during fiscal years 1995 through 1997, the Administra-
tion may, on a pilot program basis, participate on a deferred 
basis of not less than 90 percent and not more than 100 
percent on loans made to intermediaries by a for-profit or 
nonprofit entity or by alliances of such entities, subject to 
the following conditions: 
"(A) NUMBER OF LOANS.—In carrying out this para-
graph, the Administration shall not participate in providing 
financing 
on 
a 
deferred 
basis 
to 
more 
than 
10 
intermediaries 
in 
urban 
areas 
or 
more 
than 
10 
intermediaries in rural areas. 
"(B) TERM OF LOANS.—The term of each loan shall 
be 10 years. During the first year of the loan, the 
intermediary shall not be required to repay any interest 
or principal. During the second through fifth years of the 
loan, the intermediary shall be required to pay interest 
only. During the sixth through tenth years of the loan, 
the intermediary shall be required to make interest pay-
ments and fully amortize the principal. 
"(C) INTEREST RATE.—^The interest rate on each loan 
shall be the rate specified by paragraph (3)(F) for direct 
loans.". 
SEC. 202. ELIGIBILITY OF NATIVE AMERICAN TRIBAL GOVERNMENTS 
TO BE MICROLOAN INTERMEDIARIES. 
Section 7(m)(ll)(A) of the Small Business Act (15 U.S.C. 
636(mXllXA)) is amended— 
PUBLIC LAW 103-403—CK)T. 22, 1994 
108 STAT. 4181 
(1) in clause (iii), by striking "or" at the end; 
(2) in clause (iv), by striking the comma at the end and 
inserting "; or"; and 
(3) by adding at the end the following new clause: 
"(v) an agency of or nonprofit entity established 
by a Native American Tribal Government,'. 
SEC. 203. MICROLOAN PROGRAM EXTENSION. 
Section 609(j) of PubHc Law 102-140 (105 Stat. 831) is amended 
15 USC 636 note, 
by striking "5 years after the date of enactment of this Act", and 
inserting "on October 1, 1997". 
SEC. 204. MICROLOAN PROGRAM FUNDING AND STATE LIMITATIONS. 
Section 7(m)(7) of the Small Business Act (15 U.S.C. 636(m)(7)) 
is amended to read as follows: 
"(7) PROGRAM FUNDING FOR MICROLOANS.— 
"(A) NUMBER OF PARTICIPANTS.—During the dem-
onstration program authorized by this subsection, the 
Administration may fund, on a competitive basis, not more 
than 200 microloan programs. 
"(B) STATE LIMITATIONS.—During any fiscal year, a 
State shall not receive new loan funds from the Administra-
tion that exceed 125 percent of the State's pro rata share 
of the microloan program authorization during such fiscal 
year, such share to be based on the population of the 
State, as compared to the total population of the United 
States.". 
SEC. 205. DISTRIBUTION OF INTERMEDIARIES. 
Section 7(m)(8) of the Small Business Act (15 U.S.C. 636(m)(8)) 
is amended to read as follows: 
"(8) 
EQUITABLE 
DISTRIBUTION 
OF 
INTERMEDIARIES.—In 
Urban areas, 
approving microloan program applicants under this subsection. Rural areas, 
the Administration shall select such intermediaries as will 
ensure appropriate availability of loans for small businesses 
in all industries located throughout each State, particularly 
those located in urban and in rural areas.". 
SEC. 206. MICROLOAN INTERMEDIARY LOAN LIMITATION. 
Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
636(m)(3)(C)) is amended by striking "$1,250,000" and inserting 
"$2, 500,000". 
SEC. 207. MICROLOAN TECHNICAL ASSISTANCE TO NONBORROWERS. 
Section 7(m)(4) of the Small Business Act (15 U.S.C. 636(m)(4)) 
is amended by adding at the end the following new subparagraph: 
"(E) ASSISTANCE TO CERTAIN SMALL BUSINESS CON-
CERNS.—Each intermediary may expend an amount not 
to exceed 15 percent of the grant funds received under 
paragraph (l)(B)(ii) to provide information and technical 
assistance to small business concerns that are prospective 
borrowers under this subsection.". 
SEC. 208. MICROLOAN 
TECHNICAL 
ASSISTANCE 
GRANTS FOR 
INTERMEDIARIES SERVING ECONOMICALLY DISTRESSED 
AREAS. 
(a) GRANT ELIGIBILITY.—Section 7(m)(4) of the Small Business 
Act (15 U.S.C. 636(m)(4)) is amended— 
108 STAT. 4182 
PUBLIC LAW 103-403—(XT. 22, 1994 
(1) in subparagraph (B), by inserting "except for a grant 
made to an intermediary that provides not less than 50 percent 
of its loans to small business concerns located in or owned 
by one or more residents of an economically distressed area," 
after "under subparagraph (A),"; and 
(2) in subparagraph (C), by striking clause (i) and inserting 
the following: 
"(i) IN GENERAL.—In addition to grants made under 
subparagraph (A), each intermediary 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 if— 
"(I) the intermediary provides not less than 
25 percent of its loans to small business concerns 
located in or owned by one or more residents of 
an economically distressed area; or 
"(II) the intermediary has a portfolio of loans 
made under this subsection that averages not more 
than $7,500 during the period of the intermediary's 
participation in the program.". 
(b) DEFINITION.—Section 7(m)(ll) of the Small Business Act 
(15 U.S.C. 636(m)(ll)) is amended— 
(1) in subparagraph (C), by striking the period at the 
end £ind inserting "; £ina"; and 
(2) by adding at the end the following new subparagraph: 
"(D) the term 'economically distressed area', as used 
in paragraph (4), means a county or equivalent division 
of local government of a State in which the small business 
concern is located, in which, according to the most recent 
data available from the Bureau of the Census, Department 
of Commerce, not less than 40 percent of residents have 
an annual income that is at or below the poverty level.". 
15 use 636 note. 
(c) TERMINATION.—The amendments made by this section shall 
remain in effect during the period beginning on the date of enact-
ment of this Act and ending on October 1, 1997. 
SEC. 209. LOANS TO EXPORTERS. 
Section 7(a)(14)(A) of the Small Business Act (15 U.S.C. 
636(a)(14)(A)) is amended to read as follows: 
"(14)(A) The Administration may provide extensions of 
credit, standby letters of credit, revolving lines of credit for 
export purposes, and other financing to enable small business 
concerns, including small business export trading companies 
and small business export management companies, to develop 
foreign markets. A bank or participating lending institution 
may establish the rate of interest on such financings as may 
be legal and reasonable.". 
SEC. 210. WORKING CAPITAL INTERNATIONAL TRADE LOANS. 
Section 7(a)(3)(B) of the Small Business Act (15 U.S.C. 
636(a)(3)(B)) is amended to read as follows: 
"(B) if the total amount outstanding and committed 
(on a deferred basis) solely for the purposes provided in 
paragraph (16) to the borrower from the business loan 
and investment fund established by this Act would exceed 
$1,250,000, of which not more than $750,000 may be used 
for working capital, supplies, or financings under section 
7(a)(14) for export purposes; and". 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4183 
SEC. 211. GUARANTEES ON INTERNATIONAL TRADE LOANS. 
Section 7(a)(2)(B)(iv) of the Small Business Act (15 U.S.C. 
636(a)(2)(B)(iv)) is amended to read as follows: 
"(iv) not less than 85 percent nor more than 90 
percent of the financing outstanding at the time of 
disbursement if such financing is a loan under para-
graph (14) or (16).". 
SEC. 212. ACCREDITED LENDERS PROGRAM. 
(a) ESTABLISHMENT.—^Title V of the Small Business Investment 
Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at 
the end the following new section: 
"SEC. 507. ACCREDITED LENDERS PROGRAM. 
15 USC 697d. 
"(a) ESTABLISHMENT.—The Administration is authorized to 
establish an Accredited Lenders Program for qualified State and 
local development companies that meet the requirements of sub-
section (b). 
"(b) REQUIREMENTS.—^The Administration may designate a 
qualified State or local development company as an accredited 
lender if such company— 
"(1) has been an active participant in the Development 
Company Program authorized by sections 502, 503, and 504 
for not less than the preceding 12 months; 
"(2) has well-trained, 
qualified 
personnel who are 
knowledgeable in the Administration's lending policies and 
procedures for such Development Company Program; 
"(3) has the ability to process, close, and service financing 
for plant and equipment under such Development Company 
Program; 
"(4) has a loss rate on the compan/s debentures that 
is reasonable and acceptable to the Administration; 
"(5) has a history of submitting to the Administration com-
plete and accurate debenture guaranty application packages; 
and 
"(6) has demonstrated the ability to serve small business 
credit needs for financing plant and equipment through the 
Development Company Program. 
"(c) EXPEDITED 
PROCESSING OF LOAN 
APPLICATIONS.—The 
Administration shall develop an expedited procedure for processing 
a loan application or servicing action submitted by a qualified 
State or local development company that has been designated as 
an accredited lender in accordance with subsection (b). 
"(d) SUSPENSION OR REVOCATION OF DESIGNATION.— 
"(1) IN GENERAL.—^The designation of a quEdified State or 
local development company as an accredited lender may be 
suspended or revoked if the Administration determines that— 
"(A) the development company has not continued to 
meet the criteria for eligibility under subsection (b); or 
"(B) the development company has failed to adhere 
to the Administration's rules and regulations or is violating 
any other applicable provision of law. 
"(2) EFFECT.—^A suspension or revocation under paragraph 
(1) shall not siffect any outstanding debenture guarantee. 
"(e) DEFINITION.—For purposes of this section, the term 'quali-
fied State or local development company* has the same meaning 
as in section 503(e).". 
note. 
108 STAT. 4184 
PUBLIC LAW 103-403—OCT. 22,1994 
15 use 697d 
(b) REGULATIONS.—Not later than 120 days after the date of 
"°*®- 
enactment of this Act, the Administration shall promulgate final 
regulations to carry out this section. 
l5USC697d 
(c) REPORT.—Not later than 1 year after the effective date 
^°*®- 
of regulations promulgated under subsection (b), and biennially 
thereafter, the Administration shall report to the Committees on 
Small Business of the Senate and the House of Representatives 
on the implementation of this section. Such report shall include 
data on the number of development companies designated as accred-
ited lenders, their debenture guarantee volume, their loss rates, 
the average processing time on their guarantee applications, and 
such other information as the Administration deems appropriate. 
SEC. 213. INTEREST RATE ON CERTIFIED DEVELOPMENT COMPANY 
LOANS. 
Section 112(c) of the Small Business Administration Reauthor-
ization and Amendment Act of 1988 (102 Stat. 2996) is amended— 
15 use 697. 
(1) in paragraph (1), by striking "(1) IN GENERAL.—Section 
503" and inserting "Section 503"; and 
15 use 697d 
(2) by striking paragraph (2). 
SEC. 214. CERTIFICATIONS OF EUGmiLITY FOR SBIC AND SSBIC 
FINANCING. 
Section 308 of the Small Business Investment Act of 1958 
(15 U.S.C. 687) is amended by adding at the end the following 
new subsection: 
"(h) CERTIFICATIONS OF ELIGIBILITY.— 
"(1) CERTIFICATION BY SMALL BUSINESS CONCERN.—Prior 
to receiving financial assistance from a company licensed pursu-
ant to subsection (c) or (d) of section 301, a small business 
concern shall certify in writing that it meets the eligibility 
requirements of the Small Business Investment Company Pro-
gram or the Specialized Small Business Investment Company 
Program, as applicable. 
"(2) CERTIFICATION BY COMPANY.—Prior to providing finan-
cial assistance to a small business concern under this Act, 
a company licensed pursuant to subsection (c) or (d) of section 
301 shall certify in writing that it has reviewed the application 
for assistance of the small business concern and that all docu-
mentation and other information supports the eligibility of the 
applicant. 
"(3) RETENTION OF CERTIFICATIONS.—Certificates made 
pursuant to paragraphs (1) and (2) shall be retained by the 
company licensed pursuant to subsection (c) or (d) of section 
301 for the duration of the financial assistance.", 
SEC. 215. PARTICIPATING SECURITIES FOR SMALLER SBICS. 
Section 303(g) of the Small Business Investment Act of 1958 
(15 U.S.C. 683(g)) is amended by adding at the end the following 
new paragraph: 
"(13) PARTICIPATING SECURITIES FOR SMALLER SMALL BUSI-
NESS INVESTMENT COMPANIES.— 
"(A) IN GENERAL.—Subject to the provisions of subpara-
graph (B), of the amount of the annual program level 
of participating securities approved in appropriations Acts, 
50 percent shall be reserved for funding small business 
investment companies with private capital of not more 
than $20,000,000. 
PUBLIC LAW 103-403—OCT. 22,1994 
108 STAT. 4185 
"(B) EXCEPTION.—During the last quarter of each fiscal 
year, if the Administrator determines that there is a lack 
of qualified applicants with private capital of not more 
than $20,000,000, the Administrator may utilize all or any 
part of the program level for securities reserved under 
subparagraph (A) for qualified appUcants with private cap-
ital of more than $20,000,000.". 
SEC. 216. REPORT ON SBIC PROGRAM. 
Not later than May 15, 1995, the Small Business Administra-
tion shall submit to the Committees on Small Business of the 
House of Representatives and the Senate a comprehensive report 
on— 
(1) the status and disposition of all small business invest-
ment companies participating in the Small Business Investment 
Company Program under subsections (c) and (d) of section 
301 of the Small Business Investment Act of 1958, whether 
active or in liquidation; 
(2) a complete accounting of the assets in and the basis 
of the portfolios of such companies; 
(3) the projected and actual loss rates for all portfolios 
in liquidation or active; and 
(4) a detailed accounting of valuation of the Small Business 
Investment Company Program's investments. 
SEC. 217. PREMIER CERTIFIED LENDERS PROGRAM. 
(a) IN GENERAL.—^Title V of the Small Business Investment 
Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at 
the end the following new section: 
"SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM. 
15 USC 697e. 
"(a) ESTABLISHMENT,—On a pilot program basis, the Adminis-
tration may establish a Premier Certified Lenders Program for 
not more than 15 certified development companies that meet the 
requirements of subsection (b). 
"(b) REQUIREMENTS.— 
"(1) APPLICATION.—^To be ehgible to participate in the Pre-
mier Certified Lenders Program established under subsection 
(a), a certified development company shall prepare and submit 
to the Administration an application at such time, in such 
manner, and containing such information as the Administration 
may require. 
"(2) DESIGNATION.—^The Administration may designate a 
certified development company as a premier certified lender 
if such company— 
"(A) has been an active participant in the accredited 
lenders program during the 12-month period preceding the 
date on which the company submits an application under 
paragraph (1), except tnat, prior to January 1, 1996, the 
Administration may waive this requirement if the company 
is qualified to participate in the accredited lenders program; 
"(B) has a history of submitting to the Administration 
adequately analyzed debenture guarantee application pack-
ages; and 
"(C) agrees to assume and to reimburse the Adminis-
tration for 10 percent of any loss sustained by the Adminis-
tration as a result of default by the company in the pay-
ment of principal or interest on a debenture issued by 
108 STAT. 4186 
PUBLIC LAW 103-403—OCT. 22, 1994 
such company and guaranteed by the Administration under 
this section. 
"(c) Loss RESERVE.— 
"(1) ESTABLISHMENT.—^A company designated as a premier 
certified lender shall establish a loss reserve for finsuicings 
approved pursuant to this section. 
"(2) AMOUNT.—^The amount of the loss reserve shall be 
based upon the greater of— 
"(A) the historic loss rate on debentures issued by 
such company; or 
"(B) 10 percent of the amount of the company's expo-
sure as determined under subsection (b)(2)(C). 
"(3) ASSETS.—^The loss reserve shall be comprised of seg-
regated assets of the company which shall be securitized in 
favor of the Administration. 
"(4) CONTRIBUTIONS.—The company shall make contribu-
tions to the loss reserve in the following amounts and at the 
following intervals: 
"(A) 50 percent when a debenture is closed. 
"(B) 25 percent not later than 1 year after a debenture 
is closed. 
"(C) 25 percent not later than 2 years after a debenture 
is closed. 
"(d) LOAN APPROVAL AUTHORITY.— 
"(1) IN GENERAL.—Notwithstanding section 503(b)(6), and 
subject to such terms and conditions as the Administration 
may establish, the Administration may permit a company des-
ignated as a premier certified lender under this section to 
approve loans that are funded with the proceeds of a debenture 
issued by such company and may authorize the guarantee 
of such debenture. 
"(2) SCOPE OF REVIEW.—The approval of a loan by a premier 
certified lender shall be subject to final approval as to eligibility 
of any guarantee by the Administration pursuant to section 
503(a), but such final approval shall not include review of 
decisions by the lender involving creditworthiness, loan closing, 
or compliance with legal requirements imposed by law or regu-
lation. 
"(e) REVIEW.—^After the issuance and sale of debentures under 
this section, the Administration, at intervals not greater than 12 
months, shall review the financings made by each premier certified 
lender. The review shall include the lender's credit decisions suid 
general compliance with the eligibility requirements for each financ-
ing approved under the program authorized under this section. 
The Administration shall consider the findings of the review in 
carrying out its responsibilities under subsection (f), but such review 
shall not affect any outstanding debenture guarantee. 
"(f) SUSPENSION OR REVOCATION.—The designation of a State 
or local development company as a premier certified lender may 
be suspended or revoked if the Administration determines that 
the company— 
"(1) has not continued to meet the criteria for ehgibility 
under subsection (b); 
"(2) has not established or maintained the loss reserve 
required under subsection (c); 
"(3) is failing to adhere to the Administration's rules and 
regulations; or 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4187 
"(4) is violating any other applicable provision of law. 
"(g) EFFECT OF SUSPENSION OR DESIGNATION.—A suspension 
or revocation under subsection (f) shall not affect any outstanding 
debenture guarantee. 
"(h) REGULATIONS.—Not later than 180 days after the date 
of enactment of this section, the Administration shall promulgate 
regulations to carry out this section. 
"(i) REPORT.—Not later than 1 year after the date of enactment 
of this Act, and annually thereafter, the Administration shall report 
to the Committees on Small Business of the Senate and the House 
of Representatives on the implementation of this section. Each 
report shall include— 
"(1) the number of certified development companies des-
ignated as premier certified lenders; 
"(2) the debenture guarantee volume of such companies; 
"(3) a comparison of the loss rate for premier certified 
lenders to the loss rate for accredited and other lenders; and 
"(4) such other information as the Administration deems 
appropriate.". 
(b) REPEAL.—Effective on October 1, 1997, section 508 of the Effective date. 
Small Business Investment Act of 1958, as added by subsection 
l5USC697e. 
(a), is repealed. 
TITLE III—SIZE STANDARDS AND BOND 
GUARANTEES 
SEC. 301. ESTABLISHMENT OF SIZE STANDARDS. 
Section 3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2)) 
is amended to read as follows: 
"(2) ESTABLISHMENT OF SIZE STANDARDS.— 
"(A) IN GENERAL.—In addition to the criteria specified 
in paragraph (1), the Administrator may specify detailed 
definitions or standards by which a business concern may 
be determined to be a small business concern for the pur-
poses of this Act or any other Act. 
"(B) ADDITIONAL CRITERIA.—The standards described 
in paragraph (1) may utilize number of employees, dollar 
volume of business, net worth, net income, a combination 
thereof, or other appropriate factors. 
"(C) REQUIREMENTS.—^Unless specifically authorized by 
statute, no Federal department or agency may prescribe 
a size standard for categorizing a business concern as a 
small 
business 
concern, 
unless 
such 
proposed 
size 
standard— 
"(i) is proposed after an opportunity for public 
notice and comment; 
"(ii) provides for determining— 
'(I) the size of a manufacturing concern as 
measured by the manufacturing concern's average 
employment based upon employment during each 
of the manufacturing concern's pay periods for the 
preceding 12 months; 
"(II) the size of a business concern providing 
services on the basis of the annual average gross 
receipts of the business concern over a period of 
not less than 3 years; 
108 STAT. 4188 
PUBLIC LAW 103-403—OCT. 22, 1994 
"(HI) the size of other business concerns on 
the basis of data over a period of not less than 
3 years; or 
"(IV) other appropriate factors; and 
"(iii) is approved by the Administrator.". 
SEC. 302. PILOT PREFERRED SURETY BOND GUARANTEE PROGRAM 
EXTENSION. 
Section 207 of the Small Business Administration Reauthoriza-
tion and Amendment Act of 1988 (15 U.S.C. 694b note) is amended 
by striking "September 30, 1994" and inserting "September 30, 
1995". 
15 use 644 note. SEC. 303. MANUFACTURING CONTRACTS THROUGH MANUFACTURING 
APPUCATION AND EDUCATION CENTERS. 
(a) IN GENERAL.—The Small Business Administration shall pro-
mote the award of Federal manufacturing contracts to small busi-
ness concerns that participate in manufacturing application and 
education centers by working with the Department of Commerce 
and other agencies to identify components and subsystems that 
are both critical and currently foreign-sourced. 
(b) QUALIFICATIONS.—In order to qualify as a manufacturing 
application and education center under this section, an entity shall 
have the capacity to assist smsJl business concerns in a shared-
use production environment and to offer the following services: 
(1) Technology demonstration. 
(2) Technology education, 
(3) Technology application support. 
(4) Technology advancement support. 
(c) INAPPLICABILITY OF CERTAIN REQUIREMENTS.—The require-
ments of section 15(o)(l)(B) of the Small Business Act shall not 
apply with respect to any manufacturing contract carried out by 
a small business concern in conjunction with a manufacturing 
application and education center under this section. 
(d) REGULATIONS.—Not later than 180 days after the date of 
enactment of this Act, the Administrator of the Small Business 
Administration shall promulgate final regulations to carry out this 
section. 
(e) TERMINATION OF AUTHORITY.—The authority of the Small 
Business Administration under this section shall terminate on 
September 30,1997. 
(f) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated to the Small Business Administration, such 
sums as may be necessary to carry out this section. 
15 use 644 note. SEC. 304. PILOT PROGRAM FOR VERY SMALL BUSINESS CONCERNS. 
(a) ESTABLISHMENT.—The Administrator shall establish and 
carry out a pilot program in accordance with the requirements 
of this section to provide improved access to Federal contract 
opportunities for very small business concerns. 
(b) PROCUREMENT CONTRACTS.— 
(1) IN GENERAL.—In carrying out subsection (a), the 
Administrator shall identify procurement contracts of Federal 
agencies for award under the program. 
(2) CONTRACT AWARDS.—Under the program established 
pursuant to this section, the award of a procurement contract 
of a Federal agency identified by the Administration pursuant 
to paragraph (1) shall be made by the agency to an eUgible 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4189 
program participant selected, and determined to be responsible, 
by the agency. 
(3) COMPETITION.—^All contract opportunities offered for 
award under the program shall be awarded on the basis of 
competition among eligible very small business concerns. 
(c) ELIGIBILITY.—^Only a very small business concern shall be 
eligible to compete for a contract to be awarded under the program. 
A contracting officer may rely in good faith on a written certification 
that a small business concern is a very small business concern. 
(d) DELEGATION OF AUTHORITY.—The authority of the Adminis-
trator under subsections (b)(1) and (c) shall be delegated to not 
less than 5 and not more than 10 districts of the Administration 
to promote the award of contracts that can be performed by very 
small business concerns. 
(e) FINANCIAL ASSISTANCE.—In order to assist very small busi-
ness concerns receiving contract awards under the program, the 
Administrator shall establish a preauthorization program for such 
concerns for the purpose of receiving financial assistance under 
section 7(a) of the Small Business Act. 
(f) ATTAINMENT OF CONTRACT GOALS.—^All contract awards 
made under the program shall be counted toward the att£unment 
of the goals specified in section 15(g) of the Small Business Act. 
(g) REGULATIONS.—The Administrator shall— 
(1) issue proposed regulations to carry out this section 
not later than 180 days after the date of enactment of this 
Act; and 
(2) issue final regulations to carry out this section not 
later than 270 days after the date of enactment of this Act. 
(h) REPORT TO CONGRESS.—Not later than April 30, 1997, the 
Administrator shall transmit to the Congress a report on the results 
of the program, together with such recommendations as the 
Administrator deems appropriate. 
(i) PROGRAM TERM.—Implementation of the program shall begin 
not later than August 30, 1995. The program authorized by this 
section shall expire on September 30,1998. 
(j) DEFINITIONS.—For purposes of this section, the following 
definitions shall apply: 
(1) ADMINISTRATION.—The term "Administration" means 
the Small Business Administration. 
(2) ADMINISTRATOR.—The term "Administrator" means the 
Administrator of the Small Business Administration. 
(3) PROGRAM.—The term "program" means a program 
established pursuant to subsection (a). 
(4) VERY SMALL BUSINESS CONCERN.—The term "very small 
business concern" means a small business concern that— 
(A) has not more than 15 employees; and 
(B) has average annual receipts that total not more 
' 
than $1,000,000. 
SEC. 305. HANDICAPPED WORKSHOP PARTICIPATION IN SMALL BUSI-
NESS SET ASIDE CONTRACTS. 
Section 15(c) of the Small Business Act (15 U.S.C. 644(c)) 
is amended— 
\ 
(1) by amending paragraph (2)(A) to read as follows: 
"(2)(A) During fiscal year 1995, public or private organizations 
for the hsuidicapped shall be eligible to participate in programs 
108 STAT. 4190 
PUBLIC LAW 103-403—OCT. 22, 1994 
authorized under this section in an aggregate amount not to exceed 
$40,000,000."; and 
(2) by adding at the end the following new paragraph: 
"(7) Agencies awarding one or more contracts to such an 
organization pursuant to the provisions of this subsection may 
use multiyear contracts, if appropriate.". 
TITLE IV—BUSINESS DEVELOPMENT 
ASSISTANCE 
Subtitle A—General Provisions 
SEC. 401. SUNSET ON COSPONSORED TRAINING. 
15 use 637 note. 
(a) IN GENERAL.— 
(1) REPEAL.—The amendments made by section 5(a) of 
Small Business Computer Security and Education Act of 1984 
(15 U.S.C. 633 note) are hereby repealed. 
(2) EFFECTIVE DATE.—Paragraph (1) shall take effect on 
September 30, 1997. 
(b) CONFORMING AMENDMENT.—Section 7(b) of the Small Busi-
ness Computer Security and Education Act of 1984 (15 U.S.C. 
633 note) is amended in the second sentence by striking "and 
the amendments made to section 8(b)(1)(A) of the Small Business 
Act by section 5(a)(2) of this Act are" and inserting "is". 
SEC. 402. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL. 
Section 21(a)(4) of the Small Business Act (15 U.S.C. 648(a)(4)) 
is amended to read as follows: 
"(4) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.— 
"(A) IN GENERAL.—^The Administration shall require as a 
condition of any grant (or amendment or modification thereof) 
made to an applicant under this section, that a matching 
amount (excluding any fees collected from recipients of such 
assistance) equal to the amount of such grant be provided 
from sources other than the Federal Grovernment, to be com-
prised of not less than 50 percent cash and not more than 
50 percent of indirect costs and in-kind contributions. 
"(B) RESTRICTION.—The matching amount described in 
subparagraph (A) shall not include any indirect costs or in-
kind contributions derived from any Federal program. 
"(C) NATIONAL PROGRAM.— 
"(i) IN GENERAL.—Except as provided in clause (ii), 
no State receiving funds under this section shall receive 
a grant that exceeds— 
"(I) for fiscal year 1995, the sum of such State's 
pro rata share of a national program based upon the 
population of the State as compared to the total popu-
lation in the United States, and $125,000; or 
"(II) in each succeeding fiscal year, the sum of 
such State's pro rata share of a national program based 
upon the population of the State as compared to the 
total population in the United States, and $200,000. 
"(ii) EXCEPTION.—Grants provided to a small business 
development center by the Administration or another 
agency to carry out the provisions of subsection (c)(3)(G) 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4191 
shall not be included in the calculation of maximum fund-
ing of a small business development center. 
"(iii) AMOUNT.—The amount of the national program 
shall be— 
"(I) $70,000,000 through September 30,1996; 
> 
"(II) $77,500,000 from October 1, 1996 through 
September 30, 1997; and 
"(III) $85,000,000 beginning October 1,1997. 
The amount for which a small business development center 
is eligible under this paragraph shall be based upon the 
amount of the national program in effect as- of the date 
for commencement of performance of the small business 
development center's grant.". 
SEC. 403. FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOP-
MENT CENTERS. 
Section 21(a)(5) of the Small Business Act (15 U.S.C. 648(a)(5)) 
is amended to read as follows: 
"(5) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT 
CENTERS.— 
"(A) IN GENERAL.—Subject to the conditions set forth in 
subparagraph (B), a small business development center may 
enter into a contract with a Federal department or agency 
to provide specific assistance to small business concerns. 
"(B) CONTRACT PREREQUISITES.—Before bidding on a con-
tract described in subparagraph (A), a small business develop-
ment center shall receive approval from the Associate Adminis-
trator of the small business development center program of 
the subject and general scope of the contract. Each approval 
under subparagraph (A) shall be based upon a determination 
that the contract will provide assistance to small business 
concerns and that performance of the contract will not hinder 
the small business development center in canying out the 
terms of the grant received by the small business development 
center from the Administration. 
"(C) EXEMPTION FROM MATCHING REQUIREMENT.—^A con-
tract under this paragraph shall not be subject to the matching 
funds or eligibility requirements of paragraph (4). 
"(D) ADDITIONAL PROVISION.—Notwithstanding any other 
provision of law, a contract for assistance under this paragraph 
shall not be applied to any Federal department or agency's 
small business, woman-owned 
business, or socially 
and 
economicedly disadvantaged business contracting goal under 
section 15(g).". 
SEC. 404. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM EXAM-
INATION AND CERTIFICATION. 
Section 21(k) of the Small Business Act (15 U.S.C. 648(k)) 
is amended to read as follows: 
"(k) PROGRAM EXAMINATION AND CERTIFICATION.— 
"(1) EXAMINATION.—Not later than 180 days after the date 
of enactment of this subsection, the Administration shall 
develop and implement a biennial programmatic and financial 
examination of each small business development center estab-
lished pursuant to this section. 
"(2) CERTIFICATION.—The Administration may provide 
financial support, by .contract or otherwise, to the association 
108 STAT. 4192 
PUBLIC LAW 103-403—OCT. 22, 1994 
authorized by subsection (a)(3)(A) for the purpose of developing 
a small business development center ceri;ification program. 
"(3) EXTENSION OR RENEWAL OF COOPERATIVE 
AGREE-
MENTS.—In extending or renewing a cooperative agreement 
of a small business development center, the Administration 
shall consider the results of the examination and certification 
program conducted pursuant to paragraphs (1) and (2).". 
SEC. 405. CENTRAL EUROPEAN SMALL BUSINESS DEVELOPMENT. 
Section 25(i) of the Small Business Act (15 U.S.C. 652(i)) is 
amended by striking "and $2,000,000 for each of fiscal years 1993 
and 1994" and inserting ", $2,000,000 for each of fiscal years 1993 
and 1994, and $1,000,000 for fiscal year 1995". 
15 use 637 note. 
SEC. 406. MOBILE RESOURCE CENTER PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Administrator of the Small Business 
Administration may establish and carry out in each of fiscal years 
1995, 1996, and 1997 a mobile resource pilot program (hereafl;er 
in this section referred to as the "program") in accordance with 
the requirements of this section. 
(b) MOBILE RESOURCE CENTER VEHICLES.—Under the program, 
the Administration may use mobile resource center vehicles to 
provide technical assistance, information, and other services avail-
able from the Small Business Administration to traditionally under-
served populations. Two of such vehicles should be utilized in rural 
areas and 2 of such vehicles should be utilized in urban areas. 
(c) REPORT TO CONGRESS.—If the Administrator conducts the 
program authorized in this section, the Administrator shall, not 
later than December 31, 1996, transmit to the Congress a report 
containing the results of such program, together with recommenda-
tions for appropriate legislative and administrative action. 
(d) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated to carry out this section $900,000 for each 
of fiscal years 1995, 1996, and 1997, such sums to remain available 
until expended. Of such sums— 
(1) $800,000 may be made available for the purchase or 
lease of mobile resource center vehicles and operating expenses; 
and 
(2) $100,000 may be made available for studies, startup 
expenses, and other administrative expenses. 
SEC. 407. INFORMATION CONCERNING FRANCHISING. 
Section 8(b)(1)(A) of the Small Business Act (15 U.S.C. 
637(b)(1)(A)) is amended by inserting "including information on 
the benefits and risks of franchising," after "small-business enter-
prises,". 
Subtitle B—^Development of Woman-Owned 
Businesses 
SEC. 
411. EXTENSION 
OF AUTHORITY 
FOR 
DEMONSTRATION 
PROJECTS. 
The Small Business Act (15 U.S.C. 631 et seq.) is amended— 
15 use 656. 
(1) by redesignating section 28 (as added by section 2 
of the Women's Business Development Act of 1991) as section 
29; and 
PUBLIC LAW 103-403-OCT. 22, 1994 
108 STAT. 4193 
(2) in section 29(g), as redesignated, by striking "1995" 15USC656. 
and inserting "1997". 
SEC. 412. ESTABLISHMENT OF OFFICE OF WOMEN'S BUSINESS OWNER-
SHIP. 
Section 29 of the Small Business Act (15 U.S.C. 656), as redesig-
nated by section 411 of this Act, is amended by adding at the 
end the following new subsection: 
"(h) 
OFFICE OF WOMEN'S BUSINESS OWNERSHIP.—There 
is 
hereby established within the Administration an Office of Women's 
Business Ownership, which shall be responsible for the administra-
tion of the Administration's programs for the development of wom-
en's business enterprises, as such term is defined in section 408 
of the Women's Business Ownership Act of 1988. The Office of 
Women's Business Ownership shall be administered by an Assistemit 
Administrator, who shall be appointed by the Administrator.". 
SEC. 413. DEVELOPMENT OF WOMEN'S BUSINESS ENTERPRISE. 
Title IV of the Women's Business Ownership Act of 1988 (15 
U.S.C. 631 note) is amended to read as follows: 
"TITLE IV—DEVELOPMENT OF WOMEN'S 
BUSINESS ENTERPRISE 
"SEC. 401. ESTABLISHMENT OF THE INTERAGENCY COMMITTEE. 
"There is established an interagency committee to be known 
as the Interagency Committee on Women's Business Enterprise. 
"SEC. 402. DUTIES OF THE INTERAGENCY COMMITTEE. 
"(a) IN GENERAL.—^The Interagency Committee shall— 
"(1) monitor, coordinate, and promote the plans, programs, 
and operations of the departments and agencies of the Federal 
Grovernment that may contribute to the establishment and 
growth of women's business enterprise; 
"(2) develop and promote new public sector initiatives, poli-
cies, programs, and plans designed to foster women's business 
enterprise; 
"(3) review, monitor, and coordinate plans and programs, 
developed in the public sector, which affect the ability of 
women-owned businesses to obtain capital and credit; 
"(4) promote and assist, as appropriate, in the development 
of surveys of women-owned business; and 
"(5) design a comprehensive plan for a joint public-private 
sector effort to facilitate growth and development of women's 
business enterprise, which plan shall, not later than 1 year 
after the effective date of the Small Business Administration 
Reauthorization and Amendments Act of 1994, be submitted 
to the President for review. 
"(b) MEETINGS.—The Interagency Committee shall meet not 
less than biannually at such times as the Interagency Committee 
determines to be necessary to perform the duties under subsection 
(a). A majority of the members of the Committee shall constitute 
a quorum for the approval of recommendations or reports issued 
pursuant to this section. 
"(c) INTERACTION WITH COUNCIL.—In performing its duties 
under subsection (a), the Interagency Committee shall consult with 
108 STAT. 4194 
PUBLIC LAW 103-403—OCT. 22, 1994 
the Council. The Interagency Committee may meet jointly with 
the Council at the discretion of the chairperson of the Interagency 
Committee and the chairperson of the Council, but not less fre-
quently than twice annually. The chairperson of the Interagency 
Committee shall serve as chairperson of any joint meetings of 
the Interagency Committee and the Coimcil. 
'<SEC. 403. MEMBERSHIP OF THE INTERAGENCY COMMITTEE. 
"(a) IN GENERAL.— 
"(1) PARTICIPANTS.—^The Interagency Committee shall be 
composed of 1 representative from each of the following: 
"(A) The Department of Commerce. 
"(B) The Department of Defense. 
"(C) The Department of Health and Human Services. 
"(D) The Department of Labor. 
"(E) The Small Business Administration. 
"(F) The Department of Transportation. 
"(G) The Department of the Treasury. 
"(H) The General Services Administration. 
"(I) The Board of Governors of the Federal Reserve. 
"(J) The Executive staff of the President engaged in 
policymaking activities. 
(2) APPOINTMENTS.— 
"(A) IN GENERAL.—Except as provided in subparagraph 
(B), the head of each department and agency listed in 
paragraph (1) shall, not later than 45 days after the date 
of enactment of the Small Business 
Administration 
Reauthorization and Amendments Act of 1994, designate 
a representative who shall be a polic3nnaking official within 
the department or agency. 
"(B) SMALL BUSINESS ADMINISTRATION.—With respect 
to the Small Business Administration, the representative 
shall be the Assistant Administrator of the Office of Wom-
en's Business Ownership, who also shall serve as the vice 
chairperson of the Interagency Committee. 
"(3) OTHER PARTICIPATION.—Other representatives of the 
Federal Grovemment not listed in paragraph (1) may participate 
in the meetings and functions of the Interagency Committee 
on a temporary basis as needed to carry out specific Interagency 
Committee goals. 
"(b) APPOINTMENT OF CHAIRPERSON.—Not later than 45 days 
after enactment of the Small Business Administration Reauthoriza-
tion and Amendments Act of 1994, the President, in consultation 
with the Administrator of the Small Business Administration, shall 
appoint 1 of the members of the Interagency Committee to serve 
as chairperson. 
"(c) NONCOMPENSATION.—The members of the Interagency 
Committee shall serve without additional pay for such membership. 
"(d) DETAIL OF FEDERAL EMPLOYEES.—Upon request by the 
chairperson of the Interagency Committee, the head of any Federal 
department or agency may detail any of the personnel of such 
agency to assist the Interagency Committee in carrying out its 
duties under this title without regard to section 3341 of title 5, 
United States Code. 
"SEC. 404. REPORTS FROM THE INTERAGENCY COMMITTEE. 
"Not later than September 30, 1995, and annually thereafter, 
the Interagency Committee shall transmit to the President and 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4195 
to the Committees on Small Business of the Senate and the House 
of Representatives, a report containing— 
"(1) any recommendations of the Council and £uiy comments 
of the Interagency Committee thereon; 
"(2) a detailed description of the activities of the Inter-
agency Committee; 
"(3) the findings and conclusions of the Interagency 
Committee; and 
"(4) the Interagency Committee's recommendations for such 
legislation and administrative actions as the Interagency 
Committee considers appropriate to promote the development 
of small business concerns owned and controlled by women. 
"SEC. 405. ESTABLISHMENT OF THE NATIONAL WOMEN'S BUSINESS 
COUNCIL. 
"There is established a council to be known as the National 
Women's Business Council, which shall serve as an independent 
source of advice and policy recommendations to the Interagency 
Committee, to the Administrator through the Assistant Adminis-
trator of the Office of Women's Business Ownership, to the Con-
gress, and to the President. 
"SEC. 406. DUTIES OF THE COUNCIL. 
"(a) IN GENERAL.—The Council shall advise and consult with 
the Interagency Committee on matters relating to the activities, 
functions, and policies of the Interagency Committee, as provided 
in this title. The Council shall meet jointly with the Interagency 
Committee at the discretion of the chairperson of the Council and 
the chairperson of the Interagency Committee, but not less than 
biannually. 
"(b) MEETINGS.—^The Council shall meet separately at such 
times as the Council deems necessary. A majority of the members 
of the Council shall constitute a quorum for the approval of rec-
ommendations or reports issued pursuant to this section. 
"(c) RECOMMENDATIONS.—The Council shall make annual rec-
ommendations for consideration by the Interagency Committee. The 
Council shall also provide reports and make such other rec-
ommendations as it deems appropriate to the Interagency Commit-
tee, to the President, to the Administrator, and to the Committees 
on Small Business of the Senate and the House of Representatives. 
"(d) OTHER DUTIES.—The Council shall— 
"(1) review, coordinate, and monitor plans and programs 
developed in the public and private sectors, which affect the 
ability of women-owned business enterprises to obtain capital 
and credit; 
"(2) promote and assist in the development of a women's 
business census and other surveys of women-owned businesses; 
"(3) monitor and promote the plans, programs, and oper-
ations of the departments and agencies of the Federal Govern-
ment which may contribute to the establishment and growth 
of women's business enterprise; 
"(4) develop and promote new initiatives, policies, pro-
grams, and plans designed to foster women's business enter-
prise; and 
"(5) advise and consult with the Interagency Committee 
in the design of a comprehensive plan for a joint public-private 
sector effort to facilitate growth and development of women's 
business enterprise. 
79-194 O—95—23 : QL 3 Part 5 
108 STAT. 4196 
PUBLIC LAW 103-403—OCT. 22, 1994 
"SEC. 407. MEMBERSHIP OF THE COUNCIL. 
President. 
«(a) CHAIRPERSON.—Not later than 45 days after the date of 
enactment of the Small Business Administration Reauthorization 
and Amendments Act of 1994, the President shall appoint an 
individual to serve as chairperson of the Council, in consultation 
with the Administrator. The chairperson of the Council shall be 
a prominent business woman who is qualified to head the Council 
by virtue of her education, training, and experience. 
"(b) OTHER MEMBERS.—Not later than 60 days after the date 
of enactment of the Small Business Administration Reauthorization 
and Amendments Act of 1994, the Administrator shall appoint, 
in consultation with the Assistant Administrator of the Office of 
Women's Business Ownership and the chairperson of the Council 
appointed under subsection (a), 9 members of the Council, of 
whom— 
"(1) 2 shall be— 
"(A) owners of small businesses, as such term is defined 
in section 3 of the Small Business Act; and 
"(B) members of the same political party as the Presi-
dent; 
"(2) 2 shall— 
"(A) be owners of small businesses, as such term is 
defined in section 3 of the Small Business Act; and 
"(B) not be members of the same political party as 
the President; and 
"(3) 5 shall be representatives of national women's business 
organizations. 
"(c) DIVERSITY.—In appointing members of the Council, the 
Administrator shall, to the extent possible, ensure that the members 
appointed reflect geographic, racial, economic, and sectoral diver-
sity. 
"(d) SERVICE TERM.—The term of service of the members of 
the Council shall be 3 years. 
"(e) OTHER FEDERAL SERVICE.—If any member of the Council 
subsequently becomes an officer or employee of the Federal Govern-
ment or of the Congress, such individual may continue as a member 
of the Council for not longer than the 30-day period beginning 
on the date on which such individual becomes such an officer 
or employee. 
"(f) VACANCIES.—^A vacancy on the Council shall, not later 
than 30 days after the date on which the vacancy occurs, be filled 
in the same manner in which the original appointment was made. 
"(g) REIMBURSEMENTS.—^Members of the Council shall serve 
without pay for such membership, except that members shsdl be 
entitled to reimbursement for travel, subsistence, and other nec-
essary expenses incurred by them in carrying out the functions 
of the Council, in the same manner as persons serving on advisory 
boards pursuant to section 8(b) of the Small Business Act. 
"(h) EXECUTIVE DIRECTOR.—Not later than 60 days after the 
date of enactment of the Small Business Administration Reauthor-
ization Act of 1994, the Administrator, in consultation with the 
; 
chairperson of the Council, shall appoint an executive director of 
the Council. Upon the recommendation by the executive director, 
the chairperson of the Council may appoint and fix the pay of 
4 additional employees of the Council, at a rate of pay not to 
exceed the maximiun rate of pay payable for a position at GS-
PUBLIC LAW 103-403—OCT. 22, 1994' 
108 STAT. 4197 
15 of the General Schedule. All such appointments shall be subject 
to the appropriation of funds. 
"(i) RATES OF PAY.—The executive director and staff of the 
Council may be appointed without regard to the provisions of title 
5, United States Code, governing appointments in the competitive 
service, and except as provided in subsection (e), may be paid 
without regard to the provisions of chapter 51 and subchapter 
III of chapter 53 of such title relating to classification and General 
Schedule pay rates, except that the executive director may not 
receive pay in excess of the annual rate of basic pay payable 
for a position at ES-3 of the Senior Executive Pay Schedule under 
section 5832 of title 5, United States Code. 
"SEC. 408. DEFINITIONS. 
"For purposes of this title— 
"(1) the term 'Administration' means the Small Business 
Administration; 
"(2) the term Administrator' means the Administrator of 
the Small Business Administration; 
"(3) the term 'control' means exercising the power to make 
policy decisions concerning a business; 
"(4) the term 'Council' means the National Women's Busi-
ness Council, established under section 405; 
"(5) the term 'Interagency Committee' means the Inter-
agency Committee on Women's Business Enterprise, estab-
lished under section 401; 
"(6) the term 'operate' means being actively involved in 
the day-to-day management of a business; 
"(7) the term 'women's business enterprise' means— 
"(A) a business or businesses owned by a woman or 
a group of women; or 
"(B) the establishment, maintenance, or development 
of a business or businesses by a woman or a group of 
women; and 
"(8) the term 'women-owned business' means a small busi-
ness which a woman or a group of women— 
"(A) control and operate; and 
"(B) own not less than 51 percent of the business. 
"SEC. 409. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated for each of fiscal 
years 1995 through 1997, to carry out this title, $350,000.". 
SEC. 414. TRANSITION REIMBURSEMENT. 
15 USC 631 note. 
(a) IN GENERAL.—Subject to the limitation contained in sub-
section (b), in order to provide continuity in the development of 
women-owned business, the Administration may approve reasonable 
amounts made available to carry out title IV of the Women's Busi-
ness Ownership Act of 1988 to be used to pay the salaries, if 
any, and expenses of the members and staff of the National Wom-
en's Business Council that are appointed on or before the date 
of enactment of this Act. 
(b) TIME PERIOD.—No payments shall be made under subsection 
(a) afl;er the expiration of the 90-day period beginning on the 
date of enactment of this Act. 
108 STAT. 4198 
PUBLIC LAW 103-403-OCT. 22, 1994 
SEC. 415. GIFT AUTHORITY. 
Section 8(b)(1)(G) of the Small Business Act (15 U.S.C. 
637(b)(1)(G)) is amended by striking "section 8(b)(1) of this Act" 
and by inserting "this Act and to cany out the activities authorized 
by title IV of the Women's Business Ownership Act of 1988", 
SEC. 416. CONFORMING AMENDMENT. 
The table of contents for the Women's Business Ownership 
Act of 1988 (15 U.S.C. 631 note) is amended by striking the items 
relating to title IV and inserting the following: 
"TITLE IV—DEVELOPMENT OF WOMEN'S BUSINESS ENTERPRISE 
"Sec. 401. Establishment of the Interagency Committee. 
"Sec. 402. Duties of the Interagency Committee. 
"Sec. 403. Membership of the Interagency Committee. 
"Sec. 404. Reports from the Interagency Committee. 
"Sec. 405. Establishment of the National Women's Business Council. 
"Sec. 406. Duties of the Council. 
"Sec. 407. Membership of the Council. 
"Sec. 408. Definitions. 
"Sec. 409. Authorization of Appropriations.". 
p
^
e
p
l
^
^
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S
"
^ 
TITLE V—RELIEF FROM DEBENTURE 
A^^of'im''' 
PREPAYMENT PENALTIES 
15 u s e 661 note. 
SEC. 501. SHORT TITLE. 
This title may be cited as the "Small Business Prepayment 
Penalty Relief Act of 1994". 
15 u s e 697f 
SEC. 502. INTENTION OF CONGRESS. 
(a) IN GENERAL.—The Small Business Administration shall 
fully utilize the $30,000,000 appropriated in Pubhc Law 103-317 
to reduce, in accordance with this title and the amendments made 
by this title, prepayment penalties imposed in connection with 
debentures issued under— 
(1) section 303 or 503 of the Small Business Investment 
Act of 1958, which have been purchased by the Federal Financ-
ing Bank; and 
(2) title III to companies operating under section 301(d) 
of such Act, which have been purchased by the Small Business 
C 
Administration. 
(b) EQUAL OPPORTUNITY.—In order to provide an equal oppor-
tunity to participate in the program authorized under this title, 
the Small Business Administration shall afford each borrower or 
issuer of a debenture subject to this title, not less than 45 days 
to elect to participate and to provide an earnest money deposit. 
The Administration shall subsequently allow a period of not less 
than 4 months, during which those borrowers or issuers that elect 
to participate shall be allowed to complete the prepajnnent process. 
(c) RESTRICTIONS ON PARTICIPATION.—In no event shall the 
Small Business Administration— 
(1) allow any borrower or issuer to participate in the pro-
gram if the borrower or issuer fails to— 
(A) make a timely election and provide the deposit 
on a timely basis; or 
(B) complete the prepayment process within the 
required time; or 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4199 
(2) allow any borrower or issuer to participate in the pro-
gram at a percentage rate other than the rate finally deter-
mined to be applicable to all other borrowers or issuers with 
similar terms of years. 
SEC. 503. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES. 
Title V of the Small Business Investment Act of 1958 (15 
U.S.C. 695 et seq.), as amended by section 217, is amended by 
adding at the end the following new section: 
-SEC. 509. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES. 
15 USC 697f. 
"(a) IN GENERAL.— 
"(1) PREPAYMENT AUTHORIZED.—Subject to the require-
ments set forth in subsection (b), an issuer of a debenture 
purchased by the Federal Financing Bank and guaranteed by 
the Administration under this Act may, at the election of the 
borrower (in the case of a loan under section 503) or the 
issuer (in the case of a small business investment company) 
and with the approval of the Administration, prepay such 
debenture in accordance with the provisions of this section. 
A small business investment company operating under the 
authority of section 301(d) that has issued a debenture that 
was purchased by and is held by the Administration, may, 
under the same terms and conditions, prepay such debenture, 
and the penalty as provided in this section, and shall thereafter 
be immediately eligible to apply for additional assistance from 
the Administration. 
"(2) PROCEDURE.— 
"(A) IN GENERAL.—In making a prepayment under 
paragraph (1)— 
"(i) the borrower (in the case of a loan under 
section 503) or the issuer (in the case of a small busi-
ness investment company) shall pay to the Federal 
Financing Bank an amount that is equal to the sum 
of the unpaid principal balance due on the debenture 
as of the date of the prepayment (plus accrued interest 
at the coupon rate on the debenture) and the amount 
of the repurchase premium described in subparagraph 
(B);and 
"(ii) the Administration shall pay to the Federal 
Financing Bank the difference between the repurchase 
premium paid by the borrower under this subsection 
and the repurchase premium that the Federal Financ-
ing Bank would otherwise have received. 
"(B) REPURCHASE PREMIUM.— 
"(i) IN GENERAL.—For purposes of subparagraph 
(A)(i), the repurchase premium is the amount equal 
to the product of— 
"(I) the unpaid principal balance due on the 
debenture on the date of prepayment; and 
"(II) the applicable percentage rate, as deter-
mined in accordance with clauses (ii) and (iii). 
"(ii) APPLICABLE PERCENTAGE RATE.—For purposes 
of clause (i)(II), the applicable percentage rate means— 
"(I) with respect to a 10-year term loan, 8.5 
percent; 
"(II) with respect to a 15-year term loan, 9.5 
• 
percent; 
108 STAT. 4200 
PUBLIC LAW 103-403—OCT. 22, 1994 
"(III) with respect to a 20-year term loan, 10.5 
percent; and 
"(IV) with respect to a 25-year term loan, 11.5 
percent. 
"(iii) ADJUSTMENTS TO APPLICABLE PERCENTAGE 
RATE.—^The percentage rates described in clause (ii) 
shall be increased or decreased by the Administration 
by a factor not to exceed one-third, if the same factor 
is applied in each case and if the Administration deter-
mines that an adjustment is necessary, based on the 
number of borrowers having given notice of their intent 
to participate, in order to make the program (including 
the amounts appropriated for this purpose under Pub-
lic Law 103-317) result in no substantial net gain 
or loss of revenue to the Federal Financing Bank or 
to the Administration. Amounts collected in excess of 
the amount necessary to ensure revenue neutrality 
shall be refunded to the borrowers. 
"(b) REQUIREMENTS.—For purposes of subsection (a), the 
requirements of this subsection are that— 
"(1) the debenture is outstanding and neither the loan 
that secures the debenture, if any, nor the debenture is in 
default on the date on which the prepayment is made; 
"(2) State, local, or personal funds, or the proceeds of a 
refinancing in accordance with subsection (d) of this section 
under the programs authorized by this title, are used to prepay 
or roll over the debenture; and 
"(3) with respect to a debenture issued under section 503, 
the issuer certifies that the benefits, net of fees and expenses 
authorized herein, associated with prepayment of the debenture 
are entirely passed through to the borrower. 
"(c) No PREPAYMENT FEES OR PENALTIES.—NO fees or penalties 
other than those specified in this section may be imposed on the 
issuer, the borrower, the Administration, or any fund or account 
administered by the Administration as the result of a prepayment 
under this section. 
"(d) REFINANCING LIMITATIONS.— 
"(1) IN GENERAL.—^The refinancing of a debenture under 
sections 504 and 505, in accordance with subsection (b)(2)— 
"(A) shall not exceed the amount necessary to prepay 
existing debentures, including all costs associated with the 
refinancing and any applicable prepayment penalty or 
repurchase premium; and 
"(B) except as provided in paragraphs (2) and (3), shall 
be subject to the provisions of sections 504 and 505 and 
the rules and regulations promulgated thereunder, includ-
ing rules and regulations governing pa)nnent of authorized 
expenses, commissions, fees, and discounts to brokers and 
dealers in trust certificates issued pursuant to section 505. 
"(2) JOB CREATION.—^An applicant for refinancing under 
section 504 of a loan made pursuant to section 503 shall not 
be required to demonstrate that a requisite number of jobs 
will be created with the proceeds of a refinancing. 
"(3) LOAN PROCESSING FEE.—^To cover the cost of loan pack-
aging, processing, and other administrative functions, a devel-
opment company that provides refinancing under subsection 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4201 
(b)(2) may impose a one-time loan processing fee, not to exceed 
0.5 percent of the principal amount of the loan. 
"(4) NEW DEBENTURES.—Issuers of debentures under title 
III may issue new debentures in accordance with such title 
in order to prepay existing debentures as authorized in this 
section. 
"(5) PRELIMINARY NOTICE.— 
"(A) IN GENERAL.—The Administration shall use cer-
tified mail and other reasonable means to notify each 
eligible borrower of the prepayment program provided in ? 
this title. Each preliminary notice shall specify the range 
and dollar amount of repurchase premiums which could 
be required of that borrower in order to participate in 
the program. In canying out this program, the Administra-
tion shall provide a period of not less than 45 days following 
the receipt of such notice by the borrower during which 
the borrower must notify the Administration of the borrow-
er's intent to participate in the program. The Administra-
tion shall require tnat a borrower who gives notice of 
its intent to participate to make an earnest money deposit 
of $1,000 which shall not be refundable but which shall 
be credited toward the final repurchase premium. 
"(B) DEFINITION.—For purposes of this paragraph, the 
term 'borrower', in the case of a small business investment 
company or a speciaUzed small business investment com-
pany, means 'issuer'. 
"(6) FINAL NOTICE.—Based upon the response to the 
preliminary notice under paragraph (5), the Administration 
shall make a final computation of the necessary prepa5anent 
premiums £uid shall notify each qualified respondent of the 
results of such computation. Each qualified respondent shall 
be afforded not less than 4 months to complete the prepayment. 
"(e) DEFINITIONS.—For purposes of this section— 
"(1) the term 'issuer' means— 
"(A) the qualified State or local development company 
that issued a debenture pursuant to section 503, which 
has been purchased by the Federal Financing Bank; and 
"(B) a small business investment company licensed 
pursuant to subsection (c) or (d) of section 301; or 
"(2) the term 'borrower' means a small business concern 
whose loan secures a debenture issued piu"suant to section 
503. 
"(f) REGULATIONS.—Not later than 30 days afl;er the date of 
enactment of this section, the Administration shall promulgate such 
regulations as may be necessary to carry out this section. 
"(g) AUTHORIZATION.—There are authorized to be appropriated 
$30,000,000 to carry out the provisions of The Small Business 
Prepayment Penalty Relief Act of 1994.". 
TITLE VI—MISCELLANEOUS 
AMENDMENTS 
SEC. 601. SBA INTEREST PAYMENTS TO TREASURY. 
Section 4(c)(5)(B)(ii) of the Small Business Act (15 U.S.C. 
633(c)(5)(B)(ii)) is amended to read as follows: 
108 STAT. 4202 
PUBLIC LAW 103-403—OCT. 22, 1994 
"(ii) Following the close of each fiscal year, the Administration 
shall pay into the miscellaneous receipts of the United States Treas-
ury the actual interest that the Administration collects during 
that fiscal year on all financings made under this Act.". 
SEC. 602. IMPOSITION OF FEES. 
Section 5(b) of the Small Business Act (15 U.S.C. 634(b)) is 
amended— 
(1) in paragraph (10), by striking "and" at the end; 
(2) in paragraph (11), by striking the period at the end 
and inserting a semicolon; and 
(3) by adding at the end the following new paragraphs: 
"(12) impose, retain, and use only those fees which are 
specifically authorized by law or which are in effect on Septem-
ber 30, 1994, and in the amounts and at the rates in effect 
on such date, except that the Administrator may, subject to 
approval in appropriations Acts, impose, retain, and utilize, 
additional fees— 
"(A) not to exceed $100 for each loan servicing action 
(other than a loan assumption) requested after disburse-
ment of the loan, including any substitution of collateral, 
release or substitution of a guarantor, reamortization, or 
similar action; 
"(B) not to exceed $300 for loan assumptions; 
"(C) not to exceed 1 percent of the amount of requested 
financings under title III of the Small Business Investment 
Act of 1958 for which the applicant requests a commitment 
from the Administration for funding during the following 
year; and 
. "(D) to recover the direct, incremental cost involved 
in the production and dissemination of compilations of 
information produced by the Administration under the 
authority of this Act and the Small Business Investment 
Act of 1958; and 
"(13) collect, retain and utilize, subject to approval in appro-
priations Acts, any amounts collected by fiscal transfer agents 
and not used by such agent as payment of the cost of loan 
pooling or debenture servicing operations, except that amounts 
collected under this paragraph and paragraph (12) shall be 
utilized solely to facilitate the administration of the program 
that generated the excess amounts.". 
SEC. 603. JOB CREATION AND COMMUNITY BENEFIT. 
Section 7(a)(21) of the Small Business Act (15 U.S.C. 636(a)(21)) 
is amended by adding at the end the following new subparagraph: 
"(E) 
JOB CREATION AND COMMUNITY 
BENEFIT.—In 
providing assistance under this paragraph, the Administra-
tion shall develop procedures to ensure, to the maximum 
extent practicable, that such assistance is used for projects 
that— 
"(i) have the greatest potential for— 
"(I) creating new jobs for individuals whose 
employment is involuntarily terminated due to 
reductions in Federal defense expenditures; or 
"(II) preventing the loss of jobs by employees 
of small business concerns described in subpara-
graph (A)(i); and 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4203 
"(ii) have substantial potential for stimulating new 
economic activity in communities most affected by 
reductions in Federal defense expenditures.". 
SEC. 604. MICROLOAN PROGRAM AMENDMENTS. 
Section 7(m)(9)(B) of the Small Business Act (15 U.S.C. 
636(m)(9)(B)) is amended— 
(1) Ijy inserting "and loan guarantees" after "for loans"; 
and 
(2) by inserting after "experienced microlending organiza-
tions" the following: "and national and regional nonprofit 
organizations that have demonstrated experience in providing 
training support for microenterprise development and financ-
mg. . 
SEC. 605. TECHNICAL CLARIFICATION. 
(a) DEFENSE CONVERSION.—Section 7(a)(21)(A) of the Small 
Business Act (15 U.S.C. 636(a)(21)(A)) is amended by striking 
"under the" and inserting "on a guaranteed basis under the". 
(b) ADDITIONAL TECHNICAL CLARIFICATION.—Section 204 of Pub-
He Law 94-305 (15 U.S.C. 634d) is amended by striking "section 
202" and inserting "this title". 
SEC. 
606. 
STUDY 
AND 
DATA 
BASE: 
GUARANTEED 
BUSINESS 
LOAN 
PRO-
GRAM 
AND 
DEVELOPMENT 
COMPANY 
PROGRAM. 
(a) STUDY AUTHORIZED.—^The Administration shall conduct a 
study o
f
—
• 
(1) the Guaranteed Business Loan program under section 
7(a) of the Small Business Act; and 
(2) the Development Company program under sections 502, 
503, and 504 of the Small Business Investment Act of 1958. 
(b) EVALUATION.—For purposes of the study conducted under 
subsection (a), the Administration shall evaluate the performance 
of the programs described in paragraphs (1) and (2) of subsection 
(a), using data from the most recent 4-year period. Such evaluation 
shall focus on the following factors: 
(1) The number, dollar amount, and average size of the 
loans or financings under each program. 
(2) The number, dollar amount, and average size of the 
loans or financings made to womsui-owned and minority-owned 
businesses under each program. 
(3) The geographic distribution of the loans or financings 
under each program. 
(4) The jobs created or maintained attributable to the loans 
or financings under each program. 
\ 
(5) The number, dollar amount, and average size of the 
\ 
loans or financings on which borrowers defaulted under each 
\\ 
program. 
\\ 
(6) The amounts recovered by the Administration after 
\ \ 
default, foreclosure, or otherwise under each program. 
\\ 
(7) The number of companies which are no longer in busi-
\ 
ness despite receiving the loans or financings under each pro-
gram. 
(8) The taxes paid by businesses which received the loans 
or financings under each program. 
(9) Such other information as the Administration deter-
mines to be appropriate for a complete evaluation of each 
program. 
W 
108 STAT. 4204 
PUBLIC LAW 103-403—OCT. 22, 1994 
(c) CONTRACTING WITH INDEPENDENT ENTITIES.—In carrying 
out subsections (a) and (b), the Administration may contract with 
an independent entity or entities— 
(1) to conduct the study pursuant to subsection (a); and 
(2) to develop a database of information to enable the 
Administration to maintain and access, on an ongoing basis, 
current information relating to the factors set forth in sub-
section (b). 
(d) DATE.—The study authorized by subsection (a) shall be 
completed not later than September 30,1995. 
SEC. 607. SBIR VENDORS. 
Section 9(q)(2) of the Small Business Act (15 U.S.C. 638(q)(2)) 
is amended to read as follows: 
"(2) VENDOR SELECTION,—Each agency may select a vendor 
to assist small business concerns to meet the goals listed in 
paragraph (1) for a term not to exceed 3 years. Such selection 
shall be competitive and shall utilize merit-based criteria.". 
SEC. 608. PROGRAM EXTENSION. 
Section 602(e) of the Business Opportunity Development 
Reform Act of 1988 (15 U.S.C. 637 note) is amended by striking 
"September 30, 1994", and inserting "September 30, 1997". 
SEC. 609. PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS 
NOT LAWFULLY WITHIN THE UNITED STATES. 
Section 2 of the Small Business Act (15 U.S.C. 631) is amended 
by adding at the end the following new subsection: 
"(i) PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS NOT 
LAWFULLY WITHIN THE UNITED STATES.—None of the funds made 
available pursuant to this Act may be used to provide any direct 
benefit or assistance to any individual in the United States if 
the Administrator or the official to which the funds are made 
available receives notification that the individual is not lawfully 
within the United States.". 
SEC. 
610. 
OFFICE 
OF 
ADVOCACY 
EMPLOYEES. 
Section 204 of Public Law 94-305 (15 U.S.C. 634d) is 
amended— 
(1) in the matter preceding paragraph (1), by striking "after 
consultation with and subject to the approval of the Adminis-
trator,"; and 
(2) in paragraph (1), by striking "ten" and inserting "14". 
SEC. 611. PROHIBITION ON THE PROVISION OF ASSISTANCE. 
Section 4 of the Small Business Act (15 U.S.C. 633) is amended 
by adding at the end the following new subsection: 
"(e) PROHIBITION ON THE PROVISION OF ASSISTANCE.—Notwith-
standing any other provision of law, the Administration is prohib-
ited from providing any financial or other assistance to any business 
concern or other person engaged in the production or distribution 
of any product or service that has been determined to be obscene 
by a court of competent jurisdiction.". 
SEC. 612. CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT 
OBLIGATIONS. 
Section 4 of the Small Business Act (15 U.S.C. 633), as amended 
by section 611, is amended by adding at the end the following 
new subsection: 
PUBLIC LAW 103-403—OCT. 22, 1994 
108 STAT. 4205 
"(f) 
CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT 
OBLIGATIONS.— 
"(1) IN GENERAL.—For financial assistance approved after 
the promulgation of final regulations to implement this section, 
each recipient of financial assistance under this Act, including 
a recipient of a direct loan or a loan guarantee, shall certify 
that the recipient is not more than 60 days delinquent under 
the terms of any— 
"(A) administrative order; 
"(B) court order; or 
"(C) repayment agreement entered into between the 
recipient and the custodial parent or State agency providing 
child support enforcement services, 
that requires the recipient to pay child support, as such term 
is defined in section 462(b) of the Social Security Act. 
"(2) ENFORCEMENT.—Not later than 6 months after the 
date of enactment of this subsection, the Administration shall 
promulgate such regulations as may be necessary to enforce 
compliance with the requirements of this subsection.". 
SEC. 613. ADVOCACY STUDY OF PAPERWORK AND TAX IMPACT. 
The Chief Counsel for Advocacy of the Small Business Adminis-
tration shall conduct a study of the impact of all Federal regulatory, 
paperwork, and tax requirements upon small business, and report 
its findings to the Congress not later than 1 year after the date 
of enactment of this Act. 
Regulations. 
15 u s e 634 note. 
Reports. 
Approved October 22,1994. 
LEGISLATIVE HISTORY—S. 2060 (H.R. 4801): 
HOUSE REPORTS: Nos. 103-616 accompanying H.R. 4801 (Comm. on Small Business) 
and 103-824 (Comm. of Conference). 
SENATE REPORTS: No. 103-332 (Comm. on Small Business). 
CONGRESSIONAL RECORD, Vol. 140 (1994): 
Aug. 18, considered and passed Senate. 
Sept. 21, H.R. 4801 considered and passed House; S. 2060, amended, passed in 
lieu. 
Oct. 4, House agreed to conference report. 
Oct. 5, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 30 (1994): 
Oct. 22, Presidential statement.