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116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-241
======================================================================
SCORE FOR SMALL BUSINESS ACT OF 2019
_______
October 17, 2019.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Ms. Velazquez, from the Committee on Small Business, submitted the
following
R E P O R T
[To accompany H.R. 4407]
The Committee on Small Business, to whom was referred the
bill (H.R. 4407) to amend the Small Business Act to reauthorize
the SCORE program, and for other purposes, having considered
the same, report favorably thereon without amendment and
recommend that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary........................................1
II. Background and Need for Legislation.............................2
III. Hearings........................................................2
IV. Committee Consideration.........................................3
V. Committee Votes.................................................3
VI. Section-by-Section Analysis for H.R. 4407.......................5
VII. Congressional Budget Office Cost Estimate.......................7
VIII. Unfunded Mandates...............................................7
IX. New Budget Authority, Entitlement Authority, and Tax Expenditure8
X. Oversight Findings..............................................8
XI. Statement of Constitutional Authority...........................8
XII. Congressional Accountability Act................................8
XIII. Federal Advisory Committee Act Statement........................8
XIV. Statement of No Earmarks........................................8
XV. Statement of Duplication of Federal Programs....................8
XVI. Disclosure of Directed Rule Makings.............................9
XVII. Performance Goals and Objectives................................9
XVIII.Changes in Existing Law, Made by the Bill, As Reported..........9
I. Purpose and Bill Summary
The purpose of H.R. 4407, ``The SCORE for Small Business
Act of 2019'' is to restore integrity, accounting, and
performance to the Small Business Administration's SCORE
program.
II. Background and Need for Legislation
H.R. 4407 was introduced by Representative Kevin Hern (R-
OK), and Representative Angie Craig (D-MN) on September 19,
2019. The legislation adds safeguards to the SCORE program to
ensure that the Small Business Administration (SBA) is a good
agent of government funds, and that the counseling and training
program is operating effectively and efficiently for the 30
million small business owners and aspiring entrepreneurs
throughout the country.
America's 30 million small businesses account for more than
56 million jobs and create two out of three private sector jobs
in the United States. The SBA offers a wide range of free or
low-cost counseling and training services through its
entrepreneurial ecosystem to help entrepreneurs launch and grow
their small businesses. SCORE, a resource partner of the SBA,
utilizes an expansive network of volunteers at 350 chapters
nationwide to provide personalized one-on-one counseling and
workshops, either on-line or in local communities, to help
entrepreneurs start, grow, and manage their small business. In
Fiscal Year 2018, (FY 2018), SCORE volunteers mentored and
trained 600,000 clients and conducted outreach to attract
additional clients. In FY 2017, it helped launch more than
54,000 new businesses.
The Office of Inspector General (OIG) regularly conducts
audits and evaluations of SBA's programs. On April 25, 2019,
the Inspector General released the findings of an audit (Report
No. 19-12.) of SCORE. The OIG found that improvements are
needed to ensure SCORE minimizes risk of fraud or misuse of
program funds, and SBA did not ensure it accurately measured
the effectiveness of the SCORE program. On July 11, 2019, the
Subcommittee on Investigations, Oversight, and Regulations held
a hearing to examine the agency's oversight of the SCORE
program.
III. Hearings
In the 116th Congress, the Committee on Small Business held
two hearings related to the SCORE program. The first hearing
was held on February 27, 2019 titled ``Supporting America's
Startups: Review of SBA Entrepreneurial Development
Programs.''\1\ The witnesses for the hearing were stakeholders
representing each of the SBA's primary entrepreneurial
development resource partners: Mr. Charles Rowe for America's
Small Business Development Centers; Ms. Corinne Hodges for the
Association of Women's Business Centers; Mr. Ken Yancey for the
SCORE Association; and Ms. Cherlynn Sagester representing a
Veterans Business Outreach Center. As part of this hearing,
each of the entrepreneurial development programs was explored
to analyze their success in assisting small business owners
start and grow their businesses. The hearing also highlighted
SBA's oversight of the programs and witnesses discussed the
areas wherein the programs could be modernized and
strengthened.
---------------------------------------------------------------------------
\1\Supporting America's Startups: Review of SBA Entrepreneurial
Development Programs, Hearing Before the H. Comm. On Small Bus., 116th
Cong. (2019).
---------------------------------------------------------------------------
On July 11, 2019, the Subcommittee on Investigations,
Oversight, and Regulations held a hearing to examine the
agency's oversight of the SCORE program. The hearing was a
result of the OIG's audit of the program wherein the Inspector
General, Mr. Hannibal ``Mike'' Ware testified before the
Committee to elaborate on the findings of the audit report. The
Committee found that legislation was required to strengthen
oversight of the program, specifically regarding the protection
from commingling of accounts and to ensure SCORE follows
federal competitive award procedures and obtains prior approval
by SBA for certain contracts, as specified by the cooperative
agreement between SBA and SCORE. The legislation incorporates
many of the recommendations of the OIG and additional
safeguards, such as aligning salaries and performance awards
with federal standards, protecting whistleblowers, and
expanding services and promoting diversity.
IV. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on September 25, 2019, and ordered H.R.
4407 favorably reported to the House of Representatives. During
the markup, no amendments were offered.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted by voice vote to favorably report
H.R. 4407 to the House at 11:59 A.M.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. Section-by-Section of H.R. 4407
Section 1. Short title
This section provides that the bill may be cited as the
``SCORE for Small Business Act of 2019''.
Section 2. SCORE program provisions and requirements
This section amends Section 8 of the Small Business Act (15
U.S.C. 637) and officially changes the name of the Service
Corps of Retired Executives (SCORE) to the SCORE program.
This section establishes the program and sets forth
requirements by inserting the following: (c) SCORE Program
(1) Definitions
This subsection provides for the definitions of terms used
within the program, including SCORE Association, SCORE
Foundation, and SCORE program.
(2) Cooperative Agreement
This subsection gives the Administrator the authority to
enter into a cooperative agreement with the SCORE Association
to carry out the program and delineates the requirements of the
Administrator, the SCORE Association, and their joint duties.
The duties of the Administrator include: conducting an
annual financial examination of the SCORE Association for
oversight; review and approve contractual agreements entered
into with the SCORE Association; develop a system for SCORE to
submit documentation; and reconciling the differences between
the SCORE Association's performance report and the results
reported in the Office of Entrepreneurial Development's
management information system.
The duties of SCORE include: managing the nationwide
chapters; developing guidance and annual training for employees
on generating and using program income; provide verification to
SBA; separate donations from the federal funds received through
the cooperative agreement; and establish requirements for SCORE
volunteers to (1) provide mentoring and (2) facilitate free or
low-cost educational workshops for new and existing small
business owners.
Joint duties include: (1) developing and implementing plans
to provide services to individuals in rural areas, economically
disadvantaged communities, or traditionally underserved
communities; and (2) reinforcing an inclusive culture by
recruiting diverse volunteers for the SCORE chapters.
(3) Online component
This subsection requires the SCORE Association to utilize
online counseling by implementing webinars and electronic
mentoring to increase SCORE's presence across America.
(4) Accounting
This subsection requires the SCORE Association to
centralize and standardize all accounting and finance systems
of the SCORE program and designate an employee to serve as a
compliance officer to ensure the expenditures are compliant
with laws, regulations, and cooperative agreements.
(5) Compensation
This subsection limits employees' compensation, capping the
maximum rate for an individual in the Senior Executive Service
career employed at the SBA, and limiting the amount available
for performance awards at 1.5 percent of aggregate salaries.
The SCORE Association must submit to the Administrator on the
number and amount of the awards 60 days prior to their
disbursement. Furthermore, the bill prohibits members of the
Board of Directors of the SCORE Association and the employees
from serving on the Board of Directors or receiving
compensation from the SCORE Foundation without the
Administrator's approval.
(6) Whistleblower protection requirements
This subsection requires the SCORE Association to update
whistleblower protection policies in any material applicable to
employees or volunteers. In addition, the Association must
conduct an annual whistleblower protection training for
employees and volunteers and promote the use of the
whistleblower hotline through the Office of the IG of the SBA.
(7) Published materials
This subsection requires that all published materials that
are paid for in whole or part with Federal funds to include a
written acknowledgement of the SBA's support for the SCORE
program.
(8) Privacy requirements
SBA requires SCORE to collect certain information on the
businesses that they counsel. This information is the basis for
the performance metrics the agency uses to determine the
effectiveness of the SBDCs in fulfilling their mission. Some of
the information, while relevant and necessary for the SBA and
SCORE, is sensitive information that small businesses would
prefer to be treated as confidential. This sensitive
information, such as the name of the small business, is not
necessary to develop performance metrics. Its forced disclosure
could dissuade small businesses from seeking assistance through
SCORE, thereby undermining the intent of Congress when it
created the SCORE program. This subsection prohibits the SBA
from distributing and sharing SCORE client information with
other parties and reinforces the Committee's longstanding
efforts to ensure the confidentiality of the information that
small businesses provide to SCORE.
(9) Annual report
This subsection requires the SBA to submit an annual report
to the Senate and House Committees on Small Business on the
performance and effectiveness of the SCORE program. The report
should include performance metrics to measure the outcomes of
SCORE to ensure alignment with the mission of the program and
Congressional intent. The report will include the following
performance metrics: the number of individuals counseled under
SCORE program; number of hours of counseling under SCORE
program; number of local workshops; number of clients attending
online or local workshops; number of unique clients served; to
the extent practicable, demographics of SCORE participants and
volunteers; the cost to create a job, create a business, and
return on investment; number of referrals to the other
resources and programs of Administration; number of
participants reviving financial assistance; results of SCORE
program participant satisfactory surveys; number of new
businesses started by SCORE program participants; the number of
new businesses started realizing revenue growth; the number of
jobs created with assistance from the SCORE program; total cost
of SCORE program; recommendations of the Administrator to
improve SCORE program; and explanation of how SCORE program has
been integrated with resources of the Administration.
Section 3. Authorization of appropriations for the SCORE program
This section provides for an authorization of
appropriations for three years, FY 2020-FY 2022, in the amount
of $11.7 million for the SCORE program. In FY 2019, SCORE
received an appropriation of $11.7 million. This level will
ensure that the program continues to have the ability to meet
the needs of small business owners with a continued level of
funding for three fiscal years.
Section 4. Reporting requirements
Subsection (a) requires the SCORE Association to submit a
report to the Senate Committee on Small Business and
Entrepreneurship and the House Committee on Small Business
within six months of enactment of this legislation on the
future role and the strategic plan for how the SCORE program
will evolve to meet the needs of America's entrepreneurs over
the next five years, with specific markers for year 1, year 3,
and year 5.
Subsection (b) requires the Administrator to submit a
report to the Senate Committee on Small Business and
Entrepreneurship and the House Committee on Small Business
providing an assessment of the cost of leased space that is
donated to SCORE Association.
Subsection (c) requires the SCORE Association to provide a
report at the end of FY 2020 regarding the results of the
online component of this bill, including performance metrics.
The report will be provided to the Senate Committee on Small
Business and Entrepreneurship and the House Committee on Small
Business.
Section 5. Technical and conforming amendments
This section makes technical and conforming amendments to
the Small Business Act reflective of other changes made in this
bill.
Section 6. Definitions
This section provides for definitions of terms used within
this bill, including Administration, Administrator, SCORE
Association, and SCORE program.
VII. Congressional Budget Office Cost Estimate
At the time H.R. 4407 was reported to the House, the
Congressional Budget Office had not provided a cost-estimate.
VIII. Unfunded Mandates
H.R. 4407 contains no intergovernmental or private sector
mandates as defined in the Unfunded Mandates Reform Act, Public
Law No. 104-4, and would impose no costs on state, local, or
tribal governments.
IX. New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement
authority, and tax expenditures. While the Committee has not
received an estimate of new budget authority contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to Sec. 402 of the Congressional Budget
Act of 1974, the Committee does not believe that there will be
any additional costs attributable to this legislation because
all authorizations would be subject to future appropriation
action.
X. Oversight Findings
In accordance with clause 2(b)(1) of rule X of the Rules of
the House, the oversight findings and recommendations of the
Committee on Small Business with respect to the subject matter
contained in H.R. 4407 are incorporated into the descriptive
portions of this report.
XI. Statement of Constitutional Authority
Pursuant to clause 7 of rule XII of the Rules of the House
of Representatives, the Committee finds the authority for this
legislation in Art. I, Sec. 8 of the Constitution of the United
States.
XII. Congressional Accountability Act
H.R. 4407 does not relate to the terms and conditions of
employment or access to public services or accommodations
within the meaning of Sec. 102(b)(3) of Public Law No. 104-1.
XIII. Federal Advisory Committee Act Statement
H.R. 4407 does not establish or authorize the establishment
of any new advisory committees as that term is defined in the
Federal Advisory Committee Act, 5 U.S.C. App. 2.
XIV. Statement of No Earmarks
Pursuant to clause 9 of rule XXI, H.R. 4407 does not
contain any congressional earmarks, limited tax benefits, or
limited tariff benefits as defined in subsections (d), (e), or
(f) of clause 9 of rule XXI of the Rules of the House.
XV. Statement of Duplication of Federal Programs
Pursuant to clause 3 of rule XIII of the Rules of the
House, no provision of H.R. 4407 establishes or reauthorizes a
program of the federal government known to be duplicative of
another federal program, a program that was included in any
report from the United States Government Accountability Office
pursuant to Sec. 21 of Pub. L. No. 111-139, or a program
related to a program identified in the most recent catalog of
Federal Domestic Assistance.
XVI. Disclosure of Directed Rulemakings
Pursuant to clause 3 of rule XIII of the Rules of the
House, H.R. 4407 does not direct any rulemaking.
XVII. Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XII of the Rules of the
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
H.R. 4407 amends the Small Business Act to strengthen the
SCORE program to increase accounting, improve program
performance, expand safeguards and reporting requirements, and
authorize the program for $11.7 million annually for three
years.
XVIII. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause (E) of rule XIII of the Rules of
the House, changes in existing law made by the bill, as
reported, as shown as follows: existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
Sec. 7. (a) Loans to Small Business Concerns; Allowable
Purposes; Qualified Business; Restrictions and Limitations.--
The Administration is empowered to the extent and in such
amounts as provided in advance in appropriation Acts to make
loans for plant acquisition, construction, conversion, or
expansion, including the acquisition of land, material,
supplies, equipment, and working capital, and to make loans to
any qualified small business concern, including those owned by
qualified Indian tribes, for purposes of this Act. Such
financings may be made either directly or in cooperation with
banks or other financial institutions through agreements to
participate on an immediate or deferred (guaranteed) basis.
These powers shall be subject, however, to the following
restrictions, limitations, and provisions:
(1) In general.--
(A) Credit elsewhere.--
(i) In general.--The Administrator
has the authority to direct, and
conduct oversight for, the methods by
which lenders determine whether a
borrower is able to obtain credit
elsewhere. No financial assistance
shall be extended pursuant to this
subsection if the applicant can obtain
credit elsewhere. No immediate
participation may be purchased unless
it is shown that a deferred
participation is not available; and no
direct financing may be made unless it
is shown that a participation is not
available.
(ii) Liquidity.--On and after October
1, 2015, the Administrator may not
guarantee a loan under this subsection
if the lender determines that the
borrower is unable to obtain credit
elsewhere solely because the liquidity
of the lender depends upon the
guaranteed portion of the loan being
sold on the secondary market.
(B) Background checks.--Prior to the approval
of any loan made pursuant to this subsection,
or section 503 of the Small Business Investment
Act of 1958, the Administrator may verify the
applicant's criminal background, or lack
thereof, through the best available means,
including, if possible, use of the National
Crime Information Center computer system at the
Federal Bureau of Investigation.
(C) Lending limits of lenders.--On and after
October 1, 2015, the Administrator may not
guarantee a loan under this subsection if the
sole purpose for requesting the guarantee is to
allow the lender to exceed the legal lending
limit of the lender.
(2) Level of participation in guaranteed loans.--
(A) In general.--Except as provided in
subparagraphs (B), (D), and (E), in an
agreement to participate in a loan on a
deferred basis under this subsection (including
a loan made under the Preferred Lenders
Program), such participation by the
Administration shall be equal to--
(i) 75 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such
balance exceeds $150,000; or
(ii) 85 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such
balance is less than or equal to
$150,000.
(B) Reduced participation upon request.--
(i) In general.--The guarantee
percentage specified by subparagraph
(A) for any loan under this subsection
may be reduced upon the request of the
participating lender.
(ii) Prohibition.--The Administration
shall not use the guarantee percentage
requested by a participating lender
under clause (i) as a criterion for
establishing priorities in approving
loan guarantee requests under this
subsection.
(C) Interest rate under preferred lenders
program.--
(i) In general.--The maximum interest
rate for a loan guaranteed under the
Preferred Lenders Program shall not
exceed the maximum interest rate, as
determined by the Administration,
applicable to other loans guaranteed
under this subsection.
(ii) Export-import bank lenders.--Any
lender that is participating in the
Delegated Authority Lender Program of
the Export-Import Bank of the United
States (or any successor to the
Program) shall be eligible to
participate in the Preferred Lenders
Program.
(iii) Preferred lenders program
defined.--For purposes of this
subparagraph, the term ``Preferred
Lenders Program'' means any program
established by the Administrator, as
authorized under the proviso in section
5(b)(7), under which a written
agreement between the lender and the
Administration delegates to the
lender--
(I) complete authority to
make and close loans with a
guarantee from the
Administration without
obtaining the prior specific
approval of the Administration;
and
(II) complete authority to
service and liquidate such
loans without obtaining the
prior specific approval of the
Administration for routine
servicing and liquidation
activities, but shall not take
any actions creating an actual
or apparent conflict of
interest.
(D) Participation under export working
capital program.--In an agreement to
participate in a loan on a deferred basis under
the Export Working Capital Program established
pursuant to paragraph (14)(A), such
participation by the Administration shall be 90
percent.
(E) Participation in international trade
loan.--In an agreement to participate in a loan
on a deferred basis under paragraph (16), the
participation by the Administration may not
exceed 90 percent.
(3) No loan shall be made under this subsection--
(A) if the total amount outstanding and
committed (by participation or otherwise) to
the borrower from the business loan and
investment fund established by this Act would
exceed $3,750,000 (or if the gross loan amount
would exceed $5,000,000), except as provided in
subparagraph (B);
(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
$4,500,000 (or if the gross loan amount would
exceed $5,000,000), of which not more than
$4,000,000 may be used for working capital,
supplies, or financings under section 7(a)(14)
for export purposes; and
(C) if effected either directly or in
cooperation with banks or other lending
institutions through agreements to participate
on an immediate basis if the amount would
exceed $350,000.
(4) Interest rates and prepayment charges.--
(A) Interest rates.--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 shall not
exceed a rate prescribed by the Administration,
and the rate of interest for the
Administration's share of any direct or
immediate participation loan shall not exceed
the current average market yield on outstanding
marketable obligations of the United States
with remaining periods to maturity comparable
to the average maturities of such loans and
adjusted to the nearest one-eighth of 1 per
centum, and an additional amount as determined
by the Administration, but not to exceed 1 per
centum per annum: Provided, That for those
loans to assist any public or private
organization for the handicapped or to assist
any handicapped individual as provided in
paragraph (10) of this subsection, the interest
rate shall be 3 per centum per annum.
(B) Payment of accrued interest.--
(i) In general.--Any bank or other
lending institution making a claim for
payment on the guaranteed portion of a
loan made under this subsection shall
be paid the accrued interest due on the
loan from the earliest date of default
to the date of payment of the claim at
a rate not to exceed the rate of
interest on the loan on the date of
default, minus one percent.
(ii) Loans sold on secondary
market.--If a loan described in clause
(i) is sold on the secondary market,
the amount of interest paid to a bank
or other lending institution described
in that clause from the earliest date
of default to the date of payment of
the claim shall be no more than the
agreed upon rate, minus one percent.
(iii) Applicability.--Clauses (i) and
(ii) shall not apply to loans made on
or after October 1, 2000.
(C) Prepayment charges.--
(i) In general.--A borrower who
prepays any loan guaranteed under this
subsection shall remit to the
Administration a subsidy recoupment fee
calculated in accordance with clause
(ii) if--
(I) the loan is for a term of
not less than 15 years;
(II) the prepayment is
voluntary;
(III) the amount of
prepayment in any calendar year
is more than 25 percent of the
outstanding balance of the
loan; and
(IV) the prepayment is made
within the first 3 years after
disbursement of the loan
proceeds.
(ii) Subsidy recoupment fee.--The
subsidy recoupment fee charged under
clause (i) shall be--
(I) 5 percent of the amount
of prepayment, if the borrower
prepays during the first year
after disbursement;
(II) 3 percent of the amount
of prepayment, if the borrower
prepays during the second year
after disbursement; and
(III) 1 percent of the amount
of prepayment, if the borrower
prepays during the third year
after disbursement.
(5) No such loans including renewals and extensions
thereof may be made for a period or periods exceeding
twenty-five years, except that such portion of a loan
made for the purpose of acquiring real property or
constructing, converting, or expanding facilities may
have a maturity of twenty-five years plus such
additional period as is estimated may be required to
complete such construction, conversion, or expansion.
(6) All loans made under this subsection shall be of
such sound value or so secured as reasonably to assure
repayment: Provided, however, That--
(A) for loans to assist any public or private
organization or to assist any handicapped
individual as provided in paragraph (10) of
this subsection any reasonable doubt shall be
resolved in favor of the applicant;
(B) recognizing that greater risk may be
associated with loans for energy measures as
provided in paragraph (12) of this subsection,
factors in determining ``sound value'' shall
include, but not be limited to, quality of the
product or service; technical qualifications of
the applicant or his employees; sales
projections; and the financial status of the
business concern: Provided further, That such
status need not be as sound as that required
for general loans under this subsection; and
On that portion of the loan used to refinance existing
indebtedness held by a bank or other lending
institution, the Administration shall limit the amount
of deferred participation to 80 per centum of the
amount of the loan at the time of disbursement:
Provided further, That any authority conferred by this
subparagraph on the Administration shall be exercised
solely by the Administration and shall not be delegated
to other than Administration personnel.
(7) The Administration may defer payments on the
principal of such loans for a grace period and use such
other methods as it deems necessary and appropriate to
assure the successful establishment and operation of
such concern.
(8) The Administration may make loans under this
subsection to small business concerns owned and
controlled by disabled veterans (as defined in section
4211(3) of title 38, United States Code).
(9) The Administration may provide loans under this
subsection to finance residential or commercial
construction or rehabilitation for sale: Provided,
however, That such loans shall not be used primarily
for the acquisition of land.
(10) The Administration may provide guaranteed loans
under this subsection to assist any public or private
organization for the handicapped or to assist any
handicapped individual, including service-disabled
veterans, in establishing, acquiring, or operating a
small business concern.
(11) The Administration may provide loans under this
subsection to any small business concern, or to any
qualified person seeking to establish such a concern
when it determines that such loan will further the
policies established in section 2(c) of this Act, with
particular emphasis on the preservation or
establishment of small business concerns located in
urban or rural areas with high proportions of
unemployed or low-income individuals or owned by low-
income individuals.
(12)(A) The Administration may provide loans under
this subsection to assist any small business concern,
including start up, to enable such concern to design
architecturally or engineer, manufacture, distribute,
market, install, or service energy measures: Provided,
however, That such loan proceeds shall not be used
primarily for research and development.
(b) The Administration may provide deferred participation
loans under this subsection to finance the planning, design, or
installation of pollution control facilities for the purposes
set forth in section 404 of the Small Business Investment Act
of 1958. Notwithstanding the limitation expressed in paragraph
(3) of this subsection, a loan made under this paragraph may
not result in a total amount outstanding and committed to a
borrower from the business loan and investment fund of more
than $1,000,000.
(13) The Administration may provide financing under
this subsection to State and local development
companies for the purposes of, and subject to the
restrictions in, title V of the Small Business
Investment Act of 1958.
(14) Export working capital program.--
(A) In general.--The Administrator 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.
(B) Terms.--
(i) Loan amount.--The Administrator
may not guarantee a loan under this
paragraph of more than $5,000,000.
(ii) Fees.--
(I) In general.--For a loan
under this paragraph, the
Administrator shall collect the
fee assessed under paragraph
(23) not more frequently than
once each year.
(II) Untapped credit.--The
Administrator may not assess a
fee on capital that is not
accessed by the small business
concern.
(C) Considerations.--When considering loan or
guarantee applications, the Administration
shall give weight to export-related benefits,
including opening new markets for United States
goods and services abroad and encouraging the
involvement of small businesses, including
agricultural concerns, in the export market.
(D) Marketing.--The Administrator shall
aggressively market its export financing
program to small businesses.
(15)(A) The Administration may guarantee loans under
this subsection--
(i) to qualified employee trusts with respect
to a small business concern for the purpose of
purchasing, and for any transaction costs
associated with purchasing, stock of the
concern under a plan approved by the
Administrator which, when carried out, results
in the qualified employee trust owning at least
51 per centum of the stock of the concern; and
(ii) to a small business concern under a plan
approved by the Administrator, if the proceeds
from the loan are only used to make a loan to a
qualified employee trust, and for any
transaction costs associated with making that
loan, that results in the qualified employee
trust owning at least 51 percent of the small
business concern.
(B) The plan requiring the Administrator's approval
under subparagraph (A) shall be submitted to the
Administration by the trustee of such trust or by the
small business concern with its application for the
guarantee. Such plan shall include an agreement with
the Administrator which is binding on such trust and on
the small business concern and which provides that--
(i) not later than the date the loan
guaranteed under subparagraph (A) is repaid (or
as soon thereafter as is consistent with the
requirements of section 401(a) of the Internal
Revenue Code of 1954), at least 51 per centum
of the total stock of such concern shall be
allocated to the accounts of at least 51 per
centum of the employees of such concern who are
entitled to share in such allocation,
(ii) there will be periodic reviews of the
role in the management of such concern of
employees to whose accounts stock is allocated,
(iii) there will be adequate management to
assure management expertise and continuity, and
(iv) with respect to a loan made to a trust,
or to a cooperative in accordance with
paragraph (35)--
(I) a seller of the small business
concern may remain involved as an
officer, director, or key employee of
the small business concern when a
qualified employee trust or cooperative
has acquired 100 percent of ownership
of the small business concern; and
(II) any seller of the small business
concern who remains as an owner of the
small business concern, regardless of
the percentage of ownership interest,
shall be required to provide a personal
guarantee by the Administration.
(C) In determining whether to guarantee any loan
under this paragraph, the individual business
experience or personal assets of employee-owners shall
not be used as criteria, except inasmuch as certain
employee-owners may assume managerial responsibilities,
in which case business experience may be considered.
(D) For purposes of this paragraph, a corporation
which is controlled by any other person shall be
treated as a small business concern if such corporation
would, after the plan described in subparagraph (B) is
carried out, be treated as a small business concern.
(E) The Administration shall compile a separate list
of applications for assistance under this paragraph,
indicating which applications were accepted and which
were denied, and shall report periodically to the
Congress on the status of employee-owned firms assisted
by the Administration, which shall include--
(i) the total number of loans made to
employee-owned business concerns that were
guaranteed by the Administrator under section
7(a) of the Small Business Act (15 U.S.C.
636(a)) or section 502 of the Small Business
Investment Act of 1958 (15 U.S.C. 696),
including the number of loans made--
(I) to small business concerns owned
and controlled by socially and
economically disadvantaged individuals;
and
(II) to cooperatives;
(ii) the total number of financings made to
employee-owned business concerns by companies
licensed under section 301(c) of the Small
Business Investment Act of 1958 (15 U.S.C.
696(c)), including the number of financings
made--
(I) to small business concerns owned
and controlled by socially and
economically disadvantaged individuals;
and
(II) to cooperatives; and
(iii) any outreach and educational activities
conducted by the Administration with respect to
employee-owned business concerns.
(F) A small business concern that makes a loan to a
qualified employee trust under subparagraph (A)(ii) is
not required to contain the same terms and conditions
as the loan made to the small business concern that is
guaranteed by the Administration under such
subparagraph.
(G) With respect to a loan made to a qualified
employee trust under this paragraph, or to a
cooperative in accordance with paragraph (35), the
Administrator may, as deemed appropriate, elect to not
require any mandatory equity to be provided by the
qualified employee trust or cooperative to make the
loan.
(16) International trade.--
(A) In general.--If the Administrator
determines that a loan guaranteed under this
subsection will allow an eligible small
business concern that is engaged in or
adversely affected by international trade to
improve its competitive position, the
Administrator may make such loan to assist such
concern--
(i) in the financing of the
acquisition, construction, renovation,
modernization, improvement, or
expansion of productive facilities or
equipment to be used in the United
States in the production of goods and
services involved in international
trade;
(ii) in the refinancing of existing
indebtedness that is not structured
with reasonable terms and conditions,
including any debt that qualifies for
refinancing under any other provision
of this subsection; or
(iii) by providing working capital.
(B) Security.--
(i) In general.--Except as provided
in clause (ii), each loan made under
this paragraph shall be secured by a
first lien position or first mortgage
on the property or equipment financed
by the loan or on other assets of the
small business concern.
(ii) Exception.--A loan under this
paragraph may be secured by a second
lien position on the property or
equipment financed by the loan or on
other assets of the small business
concern, if the Administrator
determines the lien provides adequate
assurance of the payment of the loan.
(C) Engaged in international trade.--For
purposes of this paragraph, a small business
concern is engaged in international trade if,
as determined by the Administrator, the small
business concern is in a position to expand
existing export markets or develop new export
markets.
(D) Adversely affected by international
trade.--For purposes of this paragraph, a small
business concern is adversely affected by
international trade if, as determined by the
Administrator, the small business concern--
(i) is confronting increased
competition with foreign firms in the
relevant market; and
(ii) is injured by such competition.
(E) Findings by certain federal agencies.--
For purposes of subparagraph (D)(ii) the
Administrator shall accept any finding of
injury by the International Trade Commission or
any finding of injury by the Secretary of
Commerce pursuant to chapter 3 of title II of
the Trade Act of 1974.
(F) List of export finance lenders.--
(i) Publication of list required.--
The Administrator shall publish an
annual list of the banks and
participating lending institutions
that, during the 1-year period ending
on the date of publication of the list,
have made loans guaranteed by the
Administration under--
(I) this paragraph;
(II) paragraph (14); or
(III) paragraph (34).
(ii) Availability of list.--The
Administrator shall--
(I) post the list published
under clause (i) on the website
of the Administration; and
(II) make the list published
under clause (i) available,
upon request, at each district
office of the Administration.
(17) The Administration shall authorize lending
institutions and other entities in addition to banks to
make loans authorized under this subsection.
(18) Guarantee fees.--
(A) In general.--With respect to each loan
guaranteed under this subsection (other than a
loan that is repayable in 1 year or less), the
Administration shall collect a guarantee fee,
which shall be payable by the participating
lender, and may be charged to the borrower, as
follows:
(i) A guarantee fee not to exceed 2
percent of the deferred participation
share of a total loan amount that is
not more than $150,000.
(ii) A guarantee fee not to exceed 3
percent of the deferred participation
share of a total loan amount that is
more than $150,000, but not more than
$700,000.
(iii) A guarantee fee not to exceed
3.5 percent of the deferred
participation share of a total loan
amount that is more than $700,000.
(iv) In addition to the fee under
clause (iii), a guarantee fee equal to
0.25 percent of any portion of the
deferred participation share that is
more than $1,000,000.
(B) Retention of certain fees.--Lenders
participating in the programs established under
this subsection may retain not more than 25
percent of a fee collected under subparagraph
(A)(i).
(19)(A) In addition to the Preferred Lenders Program
authorized by the proviso in section 5(b)(7), the
Administration is authorized to establish a Certified
Lenders Program for lenders who establish their
knowledge of Administration laws and regulations
concerning the guaranteed loan program and their
proficiency in program requirements. The designation of
a lender as a certified lender shall be suspended or
revoked at any time that the Administration determines
that the lender is not adhering to its rules and
regulations or that the loss experience of the lender
is excessive as compared to other lenders, but such
suspension or revocation shall not affect any
outstanding guarantee.
(B) In order to encourage all lending institutions
and other entities making loans authorized under this
subsection to provide loans of $50,000 or less in
guarantees to eligible small business loan applicants,
the Administration shall develop and allow
participating lenders to solely utilize a uniform and
simplified loan form for such loans.
(C) Authority to liquidate loans.--
(i) In general.--The Administrator
may permit lenders participating in the
Certified Lenders Program to liquidate
loans made with a guarantee from the
Administration pursuant to a
liquidation plan approved by the
Administrator.
(ii) Automatic approval.--If the
Administrator does not approve or deny
a request for approval of a liquidation
plan within 10 business days of the
date on which the request is made (or
with respect to any routine liquidation
activity under such a plan, within 5
business days) such request shall be
deemed to be approved.
(20)(A) The Administration is empowered to make loans
either directly or in cooperation with banks or other
financial institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis to small business concerns eligible for
assistance under subsection (j)(10) and section 8(a).
Such assistance may be provided only if the
Administration determines that--
(i) the type and amount of such assistance
requested by such concern is not otherwise
available on reasonable terms from other
sources;
(ii) with such assistance such concern has a
reasonable prospect for operating soundly and
profitably within a reasonable period of time;
(iii) the proceeds of such assistance will be
used within a reasonable time for plant
construction, conversion, or expansion,
including the acquisition of equipment,
facilities, machinery, supplies, or material or
to supply such concern with working capital to
be used in the manufacture of articles,
equipment, supplies, or material for defense or
civilian production or as may be necessary to
insure a well-balanced national economy; and
(iv) such assistance is of such sound value
as reasonably to assure that the terms under
which it is provided will not be breached by
the small business concern.
(B)(i) No loan shall be made under this paragraph if
the total amount outstanding and committed (by
participation or otherwise) to the borrower would
exceed $750,000.
(ii) Subject to the provisions of clause (i), in
agreements to participate in loans on a deferred
(guaranteed) basis, participation by the Administration
shall be not less than 85 per centum of the balance of
the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made on a
deferred (guaranteed) basis shall be legal and
reasonable.
(iv) Financings made pursuant to this paragraph shall
be subject to the following limitations:
(I) No immediate participation may be
purchased unless it is shown that a deferred
participation is not available.
(II) No direct financing may be made unless
it is shown that a participation is
unavailable.
(C) A direct loan or the Administration's share of an
immediate participation loan made pursuant to this
paragraph shall be any secured debt instrument--
(i) that is subordinated by its terms to all
other borrowings of the issuer;
(ii) the rate of interest on which shall not
exceed the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to
maturity comparable to the average maturities
of such loan and adjusted to the nearest one-
eighth of 1 per centum;
(iii) the term of which is not more than
twenty-five years; and
(iv) the principal on which is amortized at
such rate as may be deemed appropriate by the
Administration, and the interest on which is
payable not less often than annually.
(21)(A) The Administration may make loans on a guaranteed
basis under the authority of this subsection--
(i) to a small business concern that has been (or can
reasonably 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 business was a prime
contractor or subcontractor (or supplier) at
any tier; or
(ii) to a qualified individual or a veteran seeking
to establish (or acquire) and operate a small business
concern.
(B) Recognizing that greater risk may be associated with a
loan to a small business concern described in subparagraph
(A)(i), 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 regarding the sound value of the proposed
loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in
such amounts as provided in advance in appropriation Acts for
the purposes 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 pursuant to a program providing
bonuses or other inducements to encourage voluntary
separation or early retirement;
(ii) a civilian employee of the Department of Defense
involuntarily separated from Federal service or retired
pursuant to a program offering 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 terminated pursuant to a
program offering inducements to encourage voluntary
separation or early retirement) due to the termination
(or substantial reduction) of a Department of Defense
program.
(E) Job creation and community benefit.--In providing
assistance under this paragraph, the Administration
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 subparagraph (A)(i); and
(ii) have substantial potential for
stimulating new economic activity in
communities most affected by reductions in
Federal defense expenditures.
(22) The Administration is authorized to permit
participating lenders to impose and collect a
reasonable penalty fee on late payments of loans
guaranteed under this subsection in an amount not to
exceed 5 percent of the monthly loan payment per month
plus interest.
(23) Yearly fee.--
(A) In general.--With respect to each loan
approved under this subsection, the
Administration shall assess, collect, and
retain a fee, not to exceed 0.55 percent per
year of the outstanding balance of the deferred
participation share of the loan, in an amount
established once annually by the Administration
in the Administration's annual budget request
to Congress, as necessary to reduce to zero the
cost to the Administration of making guarantees
under this subsection. As used in this
paragraph, the term ``cost'' has the meaning
given that term in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
(B) Payer.--The yearly fee assessed under
subparagraph (A) shall be payable by the
participating lender and shall not be charged
to the borrower.
(C) Lowering of borrower fees.--If the
Administration determines that fees paid by
lenders and by small business borrowers for
guarantees under this subsection may be
reduced, consistent with reducing to zero the
cost to the Administration of making such
guarantees--
(i) the Administration shall first
consider reducing fees paid by small
business borrowers under clauses (i)
through (iii) of paragraph (18)(A), to
the maximum extent possible; and
(ii) fees paid by small business
borrowers shall not be increased above
the levels in effect on the date of
enactment of this subparagraph.
(24) Notification requirement.--The Administration
shall notify the Committees on Small Business of the
Senate and the House of Representatives not later than
15 days before making any significant policy or
administrative change affecting the operation of the
loan program under this subsection.
(25) Limitation on conducting pilot projects.--
(A) In general.--Not more than 10 percent of
the total number of loans guaranteed in any
fiscal year under this subsection may be
awarded as part of a pilot program which is
commenced by the Administrator on or after
October 1, 1996.
(B) Pilot program defined.--In this
paragraph, the term ``pilot program'' means any
lending program initiative, project,
innovation, or other activity not specifically
authorized by law.
(C) Low documentation loan program.--The
Administrator may carry out the low
documentation loan program for loans of
$100,000 or less only through lenders with
significant experience in making small business
loans. Not later than 90 days after the date of
enactment of this subsection, the Administrator
shall promulgate regulations defining the
experience necessary for participation as a
lender in the low documentation loan program.
(26) Calculation of subsidy rate.--All fees,
interest, and profits received and retained by the
Administration under this subsection shall be included
in the calculations made by the Director of the Office
of Management and Budget to offset the cost (as that
term is defined in section 502 of the Federal Credit
Reform Act of 1990) to the Administration of purchasing
and guaranteeing loans under this Act.
(28) Leasing.--In addition to such other lease
arrangements as may be authorized by the
Administration, a borrower may permanently lease to one
or more tenants not more than 20 percent of any
property constructed with the proceeds of a loan
guaranteed under this subsection, if the borrower
permanently occupies and uses not less than 60 percent
of the total business space in the property.
(29) Real estate appraisals.--
(A) In general.--With respect to a loan under
this subsection that is secured by commercial
real property, an appraisal of such property by
a State licensed or certified appraiser--
(i) shall be required by the
Administration in connection with any
such loan, if such loan is in an amount
greater than the Federal banking
regulator appraisal threshold; or
(ii) may be required by the
Administration or the lender in
connection with any such loan, if such
loan is in an amount equal to or less
than the Federal banking regulator
appraisal threshold, if such appraisal
is necessary for appropriate evaluation
of creditworthiness.
(B) Federal banking regulator appraisal
threshold defined.--For purposes of this
paragraph, the term ``Federal banking regulator
appraisal threshold'' means the lesser of the
threshold amounts set by the Board of Governors
of the Federal Reserve System, the Comptroller
of the Currency, and the Federal Deposit
Insurance Corporation for when a federally
related transaction that is a commercial real
estate transaction requires an appraisal
prepared by a State licensed or certified
appraiser.
(30) Ownership requirements.--Ownership requirements
to determine the eligibility of a small business
concern that applies for assistance under any credit
program under this Act shall be determined without
regard to any ownership interest of a spouse arising
solely from the application of the community property
laws of a State for purposes of determining marital
interests.
(31) Express loans.--
(A) Definitions.--As used in this paragraph:
(i) The term ``disaster area'' means
the area for which the President has
declared a major disaster, during the
5-year period beginning on the date of
the declaration.
(ii) The term ``express lender''
means any lender authorized by the
Administration to participate in the
Express Loan Program.
(iii) The term ``express loan'' means
any loan made pursuant to this
paragraph in which a lender utilizes to
the maximum extent practicable its own
loan analyses, procedures, and
documentation.
(iv) The term ``Express Loan
Program'' means the program for express
loans established by the Administration
under paragraph (25)(B), as in
existence on April 5, 2004, with a
guaranty rate of not more than 50
percent.
(B) Restriction to express lender.--The
authority to make an express loan shall be
limited to those lenders deemed qualified to
make such loans by the Administration.
Designation as an express lender for purposes
of making an express loan shall not prohibit
such lender from taking any other action
authorized by the Administration for that
lender pursuant to this subsection.
(C) Grandfathering of existing lenders.--Any
express lender shall retain such designation
unless the Administration determines that the
express lender has violated the law or
regulations promulgated by the Administration
or modifies the requirements to be an express
lender and the lender no longer satisfies those
requirements.
(D) Maximum loan amount.--The maximum loan
amount under the Express Loan Program is
$350,000.
(E) Option to participate.--Except as
otherwise provided in this paragraph, the
Administration shall take no regulatory,
policy, or administrative action, without
regard to whether such action requires
notification pursuant to paragraph (24), that
has the effect of requiring a lender to make an
express loan pursuant to subparagraph (D).
(F) Express loans for renewable energy and
energy efficiency.--
(i) Definitions.--In this
subparagraph--
(I) the term ``biomass''--
(aa) means any
organic material that
is available on a
renewable or recurring
basis, including--
(AA)
agricultural
crops;
(BB) trees
grown for
energy
production;
(CC) wood
waste and wood
residues;
(DD) plants
(including
aquatic plants
and grasses);
(EE)
residues;
(FF) fibers;
(GG) animal
wastes and
other waste
materials; and
(HH) fats,
oils, and
greases
(including
recycled fats,
oils, and
greases); and
(bb) does not
include--
(AA) paper
that is
commonly
recycled; or
(BB)
unsegregated
solid waste;
(II) the term ``energy
efficiency project'' means the
installation or upgrading of
equipment that results in a
significant reduction in energy
usage; and
(III) the term ``renewable
energy system'' means a system
of energy derived from--
(aa) a wind, solar,
biomass (including
biodiesel), or
geothermal source; or
(bb) hydrogen derived
from biomass or water
using an energy source
described in item (aa).
(ii) Loans.--The Administrator may
make a loan under the Express Loan
Program for the purpose of--
(I) purchasing a renewable
energy system; or
(II) carrying out an energy
efficiency project for a small
business concern.
(G) Guarantee fee waiver for veterans.--
(i) Guarantee fee waiver.--The
Administrator may not collect a
guarantee fee described in paragraph
(18) in connection with a loan made
under this paragraph to a veteran or
spouse of a veteran on or after October
1, 2015.
(ii) Exception.--If the President's
budget for the upcoming fiscal year,
submitted to Congress pursuant to
section 1105(a) of title 31, United
States Code, includes a cost for the
program established under this
subsection that is above zero, the
requirements of clause (i) shall not
apply to loans made during such
upcoming fiscal year.
(iii) Definition.--In this
subparagraph, the term ``veteran or
spouse of a veteran'' means--
(I) a veteran, as defined in
section 3(q)(4);
(II) an individual who is
eligible to participate in the
Transition Assistance Program
established under section 1144
of title 10, United States
Code;
(III) a member of a reserve
component of the Armed Forces
named in section 10101 of title
10, United States Code;
(IV) the spouse of an
individual described in
subclause (I), (II), or (III);
or
(V) the surviving spouse (as
defined in section 101 of title
38, United States Code) of an
individual described in
subclause (I), (II), or (III)
who died while serving on
active duty or as a result of a
disability that is service-
connected (as defined in such
section).
(H) Recovery opportunity loans.--
(i) In general.--The Administrator
may guarantee an express loan to a
small business concern located in a
disaster area in accordance with this
subparagraph.
(ii) Maximums.--For a loan guaranteed
under clause (i)--
(I) the maximum loan amount
is $150,000; and
(II) the guarantee rate shall
be not more than 85 percent.
(iii) Overall cap.--A loan guaranteed
under clause (i) shall not be counted
in determining the amount of loans made
to a borrower for purposes of
subparagraph (D).
(iv) Operations.--A small business
concern receiving a loan guaranteed
under clause (i) shall certify that the
small business concern was in operation
on the date on which the applicable
major disaster occurred as a condition
of receiving the loan.
(v) Repayment ability.--A loan
guaranteed under clause (i) may only be
made to a small business concern that
demonstrates, to the satisfaction of
the Administrator, sufficient capacity
to repay the loan.
(vi) Timing of payment of
guarantees.--
(I) In general.--Not later
than 90 days after the date on
which a request for purchase is
filed with the Administrator,
the Administrator shall
determine whether to pay the
guaranteed portion of the loan.
(II) Recapture.--
Notwithstanding any other
provision of law, unless there
is a subsequent finding of
fraud by a court of competent
jurisdiction relating to a loan
guaranteed under clause (i), on
and after the date that is 6
months after the date on which
the Administrator determines to
pay the guaranteed portion of
the loan, the Administrator may
not attempt to recapture the
paid guarantee.
(vii) Fees.--
(I) In general.--Unless the
Administrator has waived the
guarantee fee that would
otherwise be collected by the
Administrator under paragraph
(18) for a loan guaranteed
under clause (i), and except as
provided in subclause (II), the
guarantee fee for the loan
shall be equal to the guarantee
fee that the Administrator
would collect if the guarantee
rate for the loan was 50
percent.
(II) Exception.--Subclause
(I) shall not apply if the cost
of carrying out the program
under this subsection in a
fiscal year is more than zero
and such cost is directly
attributable to the cost of
guaranteeing loans under clause
(i).
(viii) Rules.--Not later than 270
days after the date of enactment of
this subparagraph, the Administrator
shall promulgate rules to carry out
this subparagraph.
(32) Loans for energy efficient technologies.--
(A) Definitions.--In this paragraph--
(i) the term ``cost'' has the meaning
given that term in section 502 of the
Federal Credit Reform Act of 1990 (2
U.S.C. 661a);
(ii) the term ``covered energy
efficiency loan'' means a loan--
(I) made under this
subsection; and
(II) the proceeds of which
are used to purchase energy
efficient designs, equipment,
or fixtures, or to reduce the
energy consumption of the
borrower by 10 percent or more;
and
(iii) the term ``pilot program''
means the pilot program established
under subparagraph (B)
(B) Establishment.--The Administrator shall
establish and carry out a pilot program under
which the Administrator shall reduce the fees
for covered energy efficiency loans.
(C) Duration.--The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) Maximum participation.--A covered energy
efficiency loan shall include the maximum
participation levels by the Administrator
permitted for loans made under this subsection.
(E) Fees.--
(i) In general.--The fee on a covered
energy efficiency loan shall be equal
to 50 percent of the fee otherwise
applicable to that loan under paragraph
(18).
(ii) Waiver.--The Administrator may
waive clause (i) for a fiscal year if--
(I) for the fiscal year
before that fiscal year, the
annual rate of default of
covered energy efficiency loans
exceeds that of loans made
under this subsection that are
not covered energy efficiency
loans;
(II) the cost to the
Administration of making loans
under this subsection is
greater than zero and such cost
is directly attributable to the
cost of making covered energy
efficiency loans; and
(III) no additional sources
of revenue authority are
available to reduce the cost of
making loans under this
subsection to zero.
(iii) Effect of waiver.--If the
Administrator waives the reduction of
fees under clause (ii), the
Administrator--
(I) shall not assess or
collect fees in an amount
greater than necessary to
ensure that the cost of the
program under this subsection
is not greater than zero; and
(II) shall reinstate the fee
reductions under clause (i)
when the conditions in clause
(ii) no longer apply.
(iv) No increase of fees.--The
Administrator shall not increase the
fees under paragraph (18) on loans made
under this subsection that are not
covered energy efficiency loans as a
direct result of the pilot program.
(F) GAO report.--
(i) In general.--Not later than 1
year after the date that the pilot
program terminates, the Comptroller
General of the United States shall
submit to the Committee on Small
Business of the House of
Representatives and the Committee on
Small Business and Entrepreneurship of
the Senate a report on the pilot
program.
(ii) Contents.--The report submitted
under clause (i) shall include--
(I) the number of covered
energy efficiency loans for
which fees were reduced under
the pilot program;
(II) a description of the
energy efficiency savings with
the pilot program;
(III) a description of the
impact of the pilot program on
the program under this
subsection;
(IV) an evaluation of the
efficacy and potential fraud
and abuse of the pilot program;
and
(V) recommendations for
improving the pilot program.
(33) Increased veteran participation program.--
(A) Definitions.--In this paragraph--
(i) the term ``cost'' has the meaning
given that term in section 502 of the
Federal Credit Reform Act of 1990 (2
U.S.C. 661a);
(ii) the term ``pilot program'' means
the pilot program established under
subparagraph (B); and
(iii) the term ``veteran
participation loan'' means a loan made
under this subsection to a small
business concern owned and controlled
by veterans of the Armed Forces or
members of the reserve components of
the Armed Forces.
(B) Establishment.--The Administrator shall
establish and carry out a pilot program under
which the Administrator shall reduce the fees
for veteran participation loans.
(C) Duration.--The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) Maximum participation.--A veteran
participation loan shall include the maximum
participation levels by the Administrator
permitted for loans made under this subsection.
(E) Fees.--
(i) In general.--The fee on a veteran
participation loan shall be equal to 50
percent of the fee otherwise applicable
to that loan under paragraph (18).
(ii) Waiver.--The Administrator may
waive clause (i) for a fiscal year if--
(I) for the fiscal year
before that fiscal year, the
annual estimated rate of
default of veteran
participation loans exceeds
that of loans made under this
subsection that are not veteran
participation loans;
(II) the cost to the
Administration of making loans
under this subsection is
greater than zero and such cost
is directly attributable to the
cost of making veteran
participation loans; and
(III) no additional sources
of revenue authority are
available to reduce the cost of
making loans under this
subsection to zero.
(iii) Effect of waiver.--If the
Administrator waives the reduction of
fees under clause (ii), the
Administrator--
(I) shall not assess or
collect fees in an amount
greater than necessary to
ensure that the cost of the
program under this subsection
is not greater than zero; and
(II) shall reinstate the fee
reductions under clause (i)
when the conditions in clause
(ii) no longer apply.
(iv) No increase of fees.--The
Administrator shall not increase the
fees under paragraph (18) on loans made
under this subsection that are not
veteran participation loans as a direct
result of the pilot program.
(F) GAO report.--
(i) In general.--Not later than 1
year after the date that the pilot
program terminates, the Comptroller
General of the United States shall
submit to the Committee on Small
Business of the House of
Representatives and the Committee on
Small Business and Entrepreneurship of
the Senate a report on the pilot
program.
(ii) Contents.--The report submitted
under clause (i) shall include--
(I) the number of veteran
participation loans for which
fees were reduced under the
pilot program;
(II) a description of the
impact of the pilot program on
the program under this
subsection;
(III) an evaluation of the
efficacy and potential fraud
and abuse of the pilot program;
and
(IV) recommendations for
improving the pilot program.
(34) Export express program.--
(A) Definitions.--In this paragraph--
(i) the term ``export development
activity'' includes--
(I) obtaining a standby
letter of credit when required
as a bid bond, performance
bond, or advance payment
guarantee;
(II) participation in a trade
show that takes place outside
the United States;
(III) translation of product
brochures or catalogues for use
in markets outside the United
States;
(IV) obtaining a general line
of credit for export purposes;
(V) performing a service
contract from buyers located
outside the United States;
(VI) obtaining transaction-
specific financing associated
with completing export orders;
(VII) purchasing real estate
or equipment to be used in the
production of goods or services
for export;
(VIII) providing term loans
or other financing to enable a
small business concern,
including an export trading
company and an export
management company, to develop
a market outside the United
States; and
(IX) acquiring, constructing,
renovating, modernizing,
improving, or expanding a
production facility or
equipment to be used in the
United States in the production
of goods or services for
export; and
(ii) the term ``express loan'' means
a loan in which a lender uses to the
maximum extent practicable the loan
analyses, procedures, and documentation
of the lender to provide expedited
processing of the loan application.
(B) Authority.--The Administrator may
guarantee the timely payment of an express loan
to a small business concern made for an export
development activity.
(C) Level of participation.--
(i) Maximum amount.--The maximum
amount of an express loan guaranteed
under this paragraph shall be $500,000.
(ii) Percentage.--For an express loan
guaranteed under this paragraph, the
Administrator shall guarantee--
(I) 90 percent of a loan that
is not more than $350,000; and
(II) 75 percent of a loan
that is more than $350,000 and
not more than $500,000.
(35) Loans to cooperatives.--
(A) Definition.--In this paragraph, the term
``cooperative'' means an entity that is
determined to be a cooperative by the
Administrator, in accordance with applicable
Federal and State laws and regulation.
(B) Authority.--The Administration shall
guarantee loans made to a cooperative for the
purpose described in paragraph (15).
(b) Except as to agricultural enterprises as defined in
section 18(b)(1) of this Act, the Administration also is
empowered to the extent and in such amounts as provided in
advance in appropriation Acts--
(1)(A) to make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administration may
determine to be necessary or appropriate to repair,
rehabilitate or replace property, real or personal,
damaged or destroyed by or as a result of natural or
other disasters: Provided, That such damage or
destruction is not compensated for by insurance or
otherwise: And provided further, That the
Administration may increase the amount of the loan by
up to an additional 20 per centum of the aggregate
costs of such damage or destruction (whether or not
compensated for by insurance or otherwise) if it
determines such increase to be necessary or appropriate
in order to protect the damaged or destroyed property
from possible future disasters by taking mitigating
measures, including--
(i) construction of retaining walls and sea
walls;
(ii) grading and contouring land; and
(iii) relocating utilities and modifying
structures, including construction of a safe
room or similar storm shelter designed to
protect property and occupants from tornadoes
or other natural disasters, if such safe room
or similar storm shelter is constructed in
accordance with applicable standards issued by
the Federal Emergency Management Agency;
(B) to refinance any mortgage or other lien against a
totally destroyed or substantially damaged home or
business concern: Provided, That no loan or guarantee
shall be extended unless the Administration finds that
(i) the applicant is not able to obtain credit
elsewhere; (ii) such property is to be repaired,
rehabilitated, or replaced; (iii) the amount refinanced
shall not exceed the amount of physical loss sustained;
and (iv) such amount shall be reduced to the extent
such mortgage or lien is satisfied by insurance or
otherwise; and
(C) during fiscal years 2000 through 2004, to
establish a predisaster mitigation program to make such
loans (either directly or in cooperation with banks or
other lending institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis), as the Administrator may determine to be
necessary or appropriate, to enable small businesses to
use mitigation techniques in support of a formal
mitigation program established by the Federal Emergency
Management Agency, except that no loan or guarantee may
be extended to a small business under this subparagraph
unless the Administration finds that the small business
is otherwise unable to obtain credit for the purposes
described in this subparagraph;
(2) to make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administration may
determine to be necessary or appropriate to any small
business concern, private nonprofit organization, or
small agricultural cooperative located in an area
affected by a disaster, (including drought), with
respect to both farm-related and nonfarm-related small
business concerns, if the Administration determines
that the concern, the organization, or the cooperative
has suffered a substantial economic injury as a result
of such disaster and if such disaster constitutes--
(A) a major disaster, as determined by the
President under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.); or
(B) a natural disaster, as determined by the
Secretary of Agriculture pursuant to section
321 of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1961), in which case,
assistance under this paragraph may be provided
to farm-related and nonfarm-related small
business concerns, subject to the other
applicable requirements of this paragraph; or
(C) a disaster, as determined by the
Administrator of the Small Business
Administration; or
(D) if no disaster declaration has been
issued pursuant to subparagraph (A), (B), or
(C), the Governor of a State in which a
disaster has occurred may certify to the Small
Business Administration that small business
concerns, private nonprofit organizations, or
small agricultural cooperatives (1) have
suffered economic injury as a result of such
disaster, and (2) are in need of financial
assistance which is not available on reasonable
terms in the disaster stricken area. Not later
than 30 days after the date of receipt of such
certification by a Governor of a State, the
Administration shall respond in writing to that
Governor on its determination and the reasons
therefore, and may then make such loans as
would have been available under this paragraph
if a disaster declaration had been issued.
Provided, That no loan or guarantee shall be extended
pursuant to this paragraph (2) unless the
Administration finds that the applicant is not able to
obtain credit elsewhere.
(3)(A) In this paragraph--
(i) the term ``essential employee'' means an
individual who is employed by a small business
concern and whose managerial or technical
expertise is critical to the successful day-to-
day operations of that small business concern;
(ii) the term ``period of military conflict''
has the meaning given the term in subsection
(n)(1); and
(iii) the term ``substantial economic
injury'' means an economic harm to a business
concern that results in the inability of the
business concern--
(I) to meet its obligations as they
mature;
(II) to pay its ordinary and
necessary operating expenses; or
(III) to market, produce, or provide
a product or service ordinarily
marketed, produced, or provided by the
business concern.
(B) The Administration may make such disaster loans
(either directly or in cooperation with banks or other
lending institutions through agreements to participate
on an immediate or deferred basis) to assist a small
business concern that has suffered or that is likely to
suffer substantial economic injury as the result of an
essential employee of such small business concern being
ordered to active military duty during a period of
military conflict.
(C) A small business concern described in
subparagraph (B) shall be eligible to apply for
assistance under this paragraph during the period
beginning on the date on which the essential employee
is ordered to active duty and ending on the date that
is 1 year after the date on which such essential
employee is discharged or released from active duty.
The Administrator may, when appropriate (as determined
by the Administrator), extend the ending date specified
in the preceding sentence by not more than 1 year.
(D) Any loan or guarantee extended pursuant to this
paragraph shall be made at the same interest rate as
economic injury loans under paragraph (2).
(E) No loan may be made under this paragraph, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred basis, if the total amount
outstanding and committed to the borrower under this
subsection would exceed $1,500,000, unless such
applicant constitutes, or have become due to changed
economic circumstances, a major source of employment in
its surrounding area, as determined by the
Administration, in which case the Administration, in
its discretion, may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph,
no declaration of a disaster area shall be required.
(G)(i) Notwithstanding any other provision of
law, the Administrator may make a loan under
this paragraph of not more than $50,000 without
collateral.
(ii) The Administrator may defer payment of
principal and interest on a loan described in
clause (i) during the longer of--
(I) the 1-year period beginning on
the date of the initial disbursement of
the loan; and
(II) the period during which the
relevant essential employee is on
active duty.
(H) The Administrator shall give priority to
any application for a loan under this paragraph
and shall process and make a determination
regarding such applications prior to processing
or making a determination on other loan
applications under this subsection, on a
rolling basis.
(4) Coordination with fema.--
(A) In general.--Notwithstanding any other
provision of law, for any disaster declared
under this subsection or major disaster
(including any major disaster relating to which
the Administrator declares eligibility for
additional disaster assistance under paragraph
(9)), the Administrator, in consultation with
the Administrator of the Federal Emergency
Management Agency, shall ensure, to the maximum
extent practicable, that all application
periods for disaster relief under this Act
correspond with application deadlines
established under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.), or as extended by the
President.
(B) Deadlines.--Notwithstanding any other
provision of law, not later than 10 days before
the closing date of an application period for a
major disaster (including any major disaster
relating to which the Administrator declares
eligibility for additional disaster assistance
under paragraph (9)), the Administrator, in
consultation with the Administrator of the
Federal Emergency Management Agency, shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives a report that includes--
(i) the deadline for submitting
applications for assistance under this
Act relating to that major disaster;
(ii) information regarding the number
of loan applications and disbursements
processed by the Administrator relating
to that major disaster for each day
during the period beginning on the date
on which that major disaster was
declared and ending on the date of that
report; and
(iii) an estimate of the number of
potential applicants that have not
submitted an application relating to
that major disaster.
(5) Public awareness of disasters.--If a disaster is
declared under this subsection or the Administrator
declares eligibility for additional disaster assistance
under paragraph (9), the Administrator shall make every
effort to communicate through radio, television, print,
and web-based outlets, all relevant information needed
by disaster loan applicants, including--
(A) the date of such declaration;
(B) cities and towns within the area of such
declaration;
(C) loan application deadlines related to
such disaster;
(D) all relevant contact information for
victim services available through the
Administration (including links to small
business development center websites);
(E) links to relevant Federal and State
disaster assistance websites, including links
to websites providing information regarding
assistance available from the Federal Emergency
Management Agency;
(F) information on eligibility criteria for
Administration loan programs, including where
such applications can be found; and
(G) application materials that clearly state
the function of the Administration as the
Federal source of disaster loans for homeowners
and renters.
(6) Authority for qualified private contractors.--
(A) Disaster loan processing.--The
Administrator may enter into an agreement with
a qualified private contractor, as determined
by the Administrator, to process loans under
this subsection in the event of a major
disaster (including any major disaster relating
to which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator
shall pay the contractor a fee for each loan
processed.
(B) Loan loss verification services.--The
Administrator may enter into an agreement with
a qualified lender or loss verification
professional, as determined by the
Administrator, to verify losses for loans under
this subsection in the event of a major
disaster (including any major disaster relating
to which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator
shall pay the lender or verification
professional a fee for each loan for which such
lender or verification professional verifies
losses.
(7) Disaster assistance employees.--
(A) In general.--In carrying out this
section, the Administrator may, where
practicable, ensure that the number of full-
time equivalent employees--
(i) in the Office of the Disaster
Assistance is not fewer than 800; and
(ii) in the Disaster Cadre of the
Administration is not fewer than 1,000.
(B) Report.--In carrying out this subsection,
if the number of full-time employees for either
the Office of Disaster Assistance or the
Disaster Cadre of the Administration is below
the level described in subparagraph (A) for
that office, not later than 21 days after the
date on which that staffing level decreased
below the level described in subparagraph (A),
the Administrator shall submit to the Committee
on Appropriations and the Committee on Small
Business and Entrepreneurship of the Senate and
the Committee on Appropriations and Committee
on Small Business of the House of
Representatives, a report--
(i) detailing staffing levels on that
date;
(ii) requesting, if practicable and
determined appropriate by the
Administrator, additional funds for
additional employees; and
(iii) containing such additional
information, as determined appropriate
by the Administrator.
(8) Increased loan caps.--
(A) Aggregate loan amounts.--Except as
provided in subparagraph (B), and
notwithstanding any other provision of law, the
aggregate loan amount outstanding and committed
to a borrower under this subsection may not
exceed $2,000,000.
(B) Waiver authority.--The Administrator may,
at the discretion of the Administrator,
increase the aggregate loan amount under
subparagraph (A) for loans relating to a
disaster to a level established by the
Administrator, based on appropriate economic
indicators for the region in which that
disaster occurred.
(9) Declaration of eligibility for additional
disaster assistance.--
(A) In general.--If the President declares a
major disaster, the Administrator may declare
eligibility for additional disaster assistance
in accordance with this paragraph.
(B) Threshold.--A major disaster for which
the Administrator declares eligibility for
additional disaster assistance under this
paragraph shall--
(i) have resulted in extraordinary
levels of casualties or damage or
disruption severely affecting the
population (including mass
evacuations), infrastructure,
environment, economy, national morale,
or government functions in an area;
(ii) be comparable to the description
of a catastrophic incident in the
National Response Plan of the
Administration, or any successor
thereto, unless there is no successor
to such plan, in which case this clause
shall have no force or effect; and
(iii) be of such size and scope
that--
(I) the disaster assistance
programs under the other
paragraphs under this
subsection are incapable of
providing adequate and timely
assistance to individuals or
business concerns located
within the disaster area; or
(II) a significant number of
business concerns outside the
disaster area have suffered
disaster-related substantial
economic injury as a result of
the incident.
(C) Additional economic injury disaster loan
assistance.--
(i) In general.--If the Administrator
declares eligibility for additional
disaster assistance under this
paragraph, the Administrator may make
such loans under this subparagraph
(either directly or in cooperation with
banks or other lending institutions
through agreements to participate on an
immediate or deferred basis) as the
Administrator determines appropriate to
eligible small business concerns
located anywhere in the United States.
(ii) Processing time.--
(I) In general.--If the
Administrator determines that
the average processing time for
applications for disaster loans
under this subparagraph
relating to a specific major
disaster is more than 15 days,
the Administrator shall give
priority to the processing of
such applications submitted by
eligible small business
concerns located inside the
disaster area, until the
Administrator determines that
the average processing time for
such applications is not more
than 15 days.
(II) Suspension of
applications from outside
disaster area.--If the
Administrator determines that
the average processing time for
applications for disaster loans
under this subparagraph
relating to a specific major
disaster is more than 30 days,
the Administrator shall suspend
the processing of such
applications submitted by
eligible small business
concerns located outside the
disaster area, until the
Administrator determines that
the average processing time for
such applications is not more
than 15 days.
(iii) Loan terms.--A loan under this
subparagraph shall be made on the same
terms as a loan under paragraph (2).
(D) Definitions.--In this paragraph--
(i) the term ``disaster area'' means
the area for which the applicable major
disaster was declared;
(ii) the term ``disaster-related
substantial economic injury'' means
economic harm to a business concern
that results in the inability of the
business concern to--
(I) meet its obligations as
it matures;
(II) meet its ordinary and
necessary operating expenses;
or
(III) market, produce, or
provide a product or service
ordinarily marketed, produced,
or provided by the business
concern because the business
concern relies on materials
from the disaster area or sells
or markets in the disaster
area; and
(iii) the term ``eligible small
business concern'' means a small
business concern--
(I) that has suffered
disaster-related substantial
economic injury as a result of
the applicable major disaster;
and
(II)(aa) for which not less
than 25 percent of the market
share of that small business
concern is from business
transacted in the disaster
area;
(bb) for which not less than
25 percent of an input into a
production process of that
small business concern is from
the disaster area; or
(cc) that relies on a
provider located in the
disaster area for a service
that is not readily available
elsewhere.
(10) Reducing closing and disbursement delays.--The
Administrator shall provide a clear and concise
notification on all application materials for loans
made under this subsection and on relevant websites
notifying an applicant that the applicant may submit
all documentation necessary for the approval of the
loan at the time of application and that failure to
submit all documentation could delay the approval and
disbursement of the loan.
(11) Increasing transparency in loan approvals.--The
Administrator shall establish and implement clear,
written policies and procedures for analyzing the
ability of a loan applicant to repay a loan made under
this subsection.
(12) Additional awards to small business development
centers, women's business centers, and score program
for disaster recovery.--
(A) In general.--The Administration may
provide financial assistance to a small
business development center, a women's business
center described in section 29, the [Service
Corps of Retired Executives] SCORE program, or
any proposed consortium of such individuals or
entities to spur disaster recovery and growth
of small business concerns located in an area
for which the President has declared a major
disaster.
(B) Form of financial assistance.--Financial
assistance provided under this paragraph shall
be in the form of a grant, contract, or
cooperative agreement.
(C) No matching funds required.--Matching
funds shall not be required for any grant,
contract, or cooperative agreement under this
paragraph.
(D) Requirements.--A recipient of financial
assistance under this paragraph shall provide
counseling, training, and other related
services, such as promoting long-term
resiliency, to small business concerns and
entrepreneurs impacted by a major disaster.
(E) Performance.--
(i) In general.--The Administrator,
in cooperation with the recipients of
financial assistance under this
paragraph, shall establish metrics and
goals for performance of grants,
contracts, and cooperative agreements
under this paragraph, which shall
include recovery of sales, recovery of
employment, reestablishment of business
premises, and establishment of new
small business concerns.
(ii) Use of estimates.--The
Administrator shall base the goals and
metrics for performance established
under clause (i), in part, on the
estimates of disaster impact prepared
by the Office of Disaster Assistance
for purposes of estimating loan-making
requirements.
(F) Term.--
(i) In general.--The term of any
grant, contract, or cooperative
agreement under this paragraph shall be
for not more than 2 years.
(ii) Extension.--The Administrator
may make 1 extension of a grant,
contract, or cooperative agreement
under this paragraph for a period of
not more than 1 year, upon a showing of
good cause and need for the extension.
(G) Exemption from other program
requirements.--Financial assistance provided
under this paragraph is in addition to, and
wholly separate from, any other form of
assistance provided by the Administrator under
this Act.
(H) Competitive basis.--The Administration
shall award financial assistance under this
paragraph on a competitive basis.
(13) Supplemental assistance for contractor
malfeasance.--
(A) In general.--If a contractor or other
person engages in malfeasance in connection
with repairs to, rehabilitation of, or
replacement of real or personal property
relating to which a loan was made under this
subsection and the malfeasance results in
substantial economic damage to the recipient of
the loan or substantial risks to health or
safety, upon receiving documentation of the
substantial economic damage or the substantial
risk to health and safety from an independent
loss verifier, and subject to subparagraph (B),
the Administrator may increase the amount of
the loan under this subsection, as necessary
for the cost of repairs, rehabilitation, or
replacement needed to address the cause of the
economic damage or health or safety risk.
(B) Requirements.--The Administrator may only
increase the amount of a loan under
subparagraph (A) upon receiving an appropriate
certification from the borrower and person
performing the mitigation attesting to the
reasonableness of the mitigation costs and an
assignment of any proceeds received from the
person engaging in the malfeasance. The
assignment of proceeds recovered from the
person engaging in the malfeasance shall be
equal to the amount of the loan under this
section. Any mitigation activities shall be
subject to audit and independent verification
of completeness and cost reasonableness.
(14) Business recovery centers.--
(A) In general.--The Administrator, acting
through the district offices of the
Administration, shall identify locations that
may be used as recovery centers by the
Administration in the event of a disaster
declared under this subsection or a major
disaster.
(B) Requirements for identification.--Each
district office of the Administration shall--
(i) identify a location described in
subparagraph (A) in each county,
parish, or similar unit of general
local government in the area served by
the district office; and
(ii) ensure that the locations
identified under subparagraph (A) may
be used as a recovery center without
cost to the Government, to the extent
practicable.
(15) Increased oversight of economic injury disaster
loans.--The Administrator shall increase oversight of
entities receiving loans under paragraph (2), and may
consider--
(A) scheduled site visits to ensure borrower
eligibility and compliance with requirements
established by the Administrator; and
(B) reviews of the use of the loan proceeds
by an entity described in paragraph (2) to
ensure compliance with requirements established
by the Administrator.
No loan under this subsection, including renewals and
extensions thereof, may be made for a period or periods
exceeding thirty years: Provided, That the Administrator may
consent to a suspension in the payment of principal and
interest charges on, and to an extension in the maturity of,
the Federal share of any loan under this subsection for a
period not to exceed five years, if (A) the borrower under such
loan is a homeowner or a small business concern, (B) the loan
was made to enable (i) such homeowner to repair or replace his
home, or (ii) such concern to repair or replace plant or
equipment which was damaged or destroyed as the result of a
disaster meeting the requirements of clause (A) or (B) of
paragraph (2) of this subsection, and (C) the Administrator
determines such action is necessary to avoid severe financial
hardship: Provided further, That the provisions of paragraph
(1) of subsection (d) of this section shall not be applicable
to any such loan having a maturity in excess of twenty years.
Notwithstanding any other provision of law, and except as
provided in subsection (d), the interest rate on the
Administration's share of any loan made under subsection (b),
shall not exceed the average annual interest rate on all
interest-bearing obligations of the United States then forming
a part of the public debt as computed at the end of the fiscal
year next preceding the date of the loan and adjusted to the
nearest one-eight of 1 per centum plus one-quarter of 1 per
centum: Provided, however, That the interest rate for loans
made under paragraphs (1) and (2) hereof shall not exceed the
rate of interest which is in effect at the time of the
occurrence of the disaster. In agreements to participate in
loans on a deferred basis under this subsection, such
participation by the Administration shall not be in excess of
90 per centum of the balance of the loan outstanding at the
time of disbursement. Notwithstanding any other provision of
law, the interest rate on the Administration's share of any
loan made pursuant to paragraph (1) of this subsection to
repair or replace a primary residence and/or replace or repair
damaged or destroyed personal property, less the amount of
compensation by insurance or otherwise, with respect to a
disaster occurring on or after July 1, 1976, and prior to
October 1, 1978, shall be: 1 per centum on the amount of such
loan not exceeding $10,000, and 3 per centum on the amount of
such loan over $10,000 but not exceeding $40,000. The interest
rate on the Administration's share of the first $250,000 of all
other loans made pursuant to paragraph (1) of this subsection,
with respect to a disaster occurring on or after July 1, 1976,
and prior to October 1, 1978, shall be 3 per centum. All
repayments of principal on the Administration's share of any
loan made under the above provisions shall first be applied to
reduce the principal sum of such loan which bears interest at
the lower rates provided in this paragraph. The principal
amount of any loan made pursuant to paragraph (1) in connection
with a disaster which occurs on or after April 1, 1977, but
prior to January 1, 1978, may be increased by such amount, but
not more than $2,000, as the Administration determines to be
reasonable in light of the amount and nature of loss, damage,
or injury sustained in order to finance the installation of
insulation in the property which was lost, damaged, or injured,
if the uninsured, damaged portion of the property is 10 per
centum or more of the market value of the property at the time
of the disaster. No later than June 1, 1978, the Administration
shall prepare and transmit to the Select Committee on Small
Business of the Senate, the Committee on Small Business of the
House of Representatives, and the Committee of the Senate and
House of Representatives having jurisdiction over measures
relating to energy conservation, a report on its activities
under this paragraph, including therein an evaluation of the
effect of such activities on encouraging the installation of
insulation in property which is repaired or replaced after a
disaster which is subject to this paragraph, and its
recommendations with respect to the continuation, modification,
or termination of such activities.
In the administration of the disaster loan program under
paragraphs (1) and (2) of this subsection, in the case of
property loss or damage or injury resulting from a major
disaster as determined by the President or a disaster as
determined by the Administrator which occurs on or after
January 1, 1971, and prior to July 1, 1973, the Small Business
Administration, to the extent such loss or damage or injury is
not compensated for by insurance or otherwise--
(A) may make any loan for repair, rehabilitation, or
replacement of property damaged or destroyed without
regard to whether the required financial assistance is
otherwise available from private sources;
(B) may, in the case of the total destruction or
substantial property damage of a home or business
concern, refinance any mortgage or other liens
outstanding against the destroyed or damaged property
if such project is to be repaired, rehabilitated, or
replaced, except that (1) in the case of a business
concern, the amount refinanced shall not exceed the
amount of the physical loss sustained, and (2) in the
case of a home, the amount of each monthly payment of
principal and interest on the loan after refinancing
under this clause shall be not less than the amount of
each such payment made prior to such refinancing;
(C) may, in the case of a loan made under clause (A)
or a mortgage or other lien refinanced under clause (B)
in connection with the destruction of, or substantial
damage to, property owned and used as a residence by an
individual who by reason of retirement, disability, or
other similar circumstances relies for support on
survivor, disability, or retirement benefits under a
pension, insurance, or other program, consent to the
suspension of the payments of the principal of that
loan, mortgage, or lien during the lifetime of that
individual and his souse for so long as the
Administration determines that making such payments
would constitute a substantial hardship;
(D) shall, notwithstanding the provisions of any
other law and upon presentation by the applicant of
proof of loss or damage or injury and a bona fide
estimate of cost of repair, rehabilitation, or
replacement, cancel the principal of any loan made to
cover a loss or damage or injury resulting from such
disaster, except that--
(i) with respect to a loan made in connection
with a disaster occurring on or after January
1, 1971 but prior to January 1, 1972, the total
amount so canceled shall not exceed $2,500, and
the interest on the balance of the loan shall
be at a rate of 3 per centum per annum; and
(ii) with respect to a loan made in
connection with a disaster occurring on or
after January 1, 1972 but prior to July 1,
1973, the total amount so canceled shall not
exceed $5,000, and the interest on the balance
of the loan shall be at a rate of 1 per centum
per annum.
With respect to any loan referred to in clause (D) which is
outstanding on the date of enactment of this paragraph, the
Administrator shall--
(i) make sure change in the interest rate on the
balance of such loan as is required under that clause
effective as of such date of enactment; and
(ii) in applying the limitation set forth in that
clause with respect to the total amount of such loan
which may be canceled, consider as part of the amount
so canceled any part of such loan which was previously
canceled pursuant to section 231 of the Disaster Relief
Act of 1970.
Whoever wrongfully misapplies the proceeds of a loan obtained
under this subsection shall be civilly liable to the
Administrator in an amount equal to one-and-one-half times the
original principal amount of the loan.
(E) A State grant made on or prior to July 1, 1979,
shall not be considered compensation for the purpose of
applying the provisions of section 312(a) of the
Disaster Relief and Emergency Assistance Act to a
disaster loan under paragraph (1) (2)of this
subsection.
(c) Private Disaster Loans.--
(1) Definitions.--In this subsection--
(A) the term ``disaster area'' means any area
for which the President declared a major
disaster relating to which the Administrator
declares eligibility for additional disaster
assistance under subsection (b)(9), during the
period of that major disaster declaration;
(B) the term ``eligible individual'' means an
individual who is eligible for disaster
assistance under subsection (b)(1) relating to
a major disaster relating to which the
Administrator declares eligibility for
additional disaster assistance under subsection
(b)(9);
(C) the term ``eligible small business
concern'' means a business concern that is--
(i) a small business concern, as
defined under this Act; or
(ii) a small business concern, as
defined in section 103 of the Small
Business Investment Act of 1958;
(D) the term ``preferred lender'' means a
lender participating in the Preferred Lender
Program;
(E) the term ``Preferred Lender Program'' has
the meaning given that term in subsection
(a)(2)(C)(ii); and
(F) the term ``qualified private lender''
means any privately-owned bank or other lending
institution that--
(i) is not a preferred lender; and
(ii) the Administrator determines
meets the criteria established under
paragraph (10).
(2) Program required.--The Administrator shall carry
out a program, to be known as the Private Disaster
Assistance program, under which the Administration may
guarantee timely payment of principal and interest, as
scheduled, on any loan made to an eligible small
business concern located in a disaster area and to an
eligible individual.
(3) Use of loans.--A loan guaranteed by the
Administrator under this subsection may be used for any
purpose authorized under subsection (b).
(4) Online applications.--
(A) Establishment.--The Administrator may
establish, directly or through an agreement
with another entity, an online application
process for loans guaranteed under this
subsection.
(B) Other federal assistance.--The
Administrator may coordinate with the head of
any other appropriate Federal agency so that
any application submitted through an online
application process established under this
paragraph may be considered for any other
Federal assistance program for disaster relief.
(C) Consultation.--In establishing an online
application process under this paragraph, the
Administrator shall consult with appropriate
persons from the public and private sectors,
including private lenders.
(5) Maximum amounts.--
(A) Guarantee percentage.--The Administrator
may guarantee not more than 85 percent of a
loan under this subsection.
(B) Loan amount.--The maximum amount of a
loan guaranteed under this subsection shall be
$2,000,000.
(6) Terms and conditions.--A loan guaranteed under
this subsection shall be made under the same terms and
conditions as a loan under subsection (b).
(7) Lenders.--
(A) In general.--A loan guaranteed under this
subsection made to--
(i) a qualified individual may be
made by a preferred lender; and
(ii) a qualified small business
concern may be made by a qualified
private lender or by a preferred lender
that also makes loans to qualified
individuals.
(B) Compliance.--If the Administrator
determines that a preferred lender knowingly
failed to comply with the underwriting
standards for loans guaranteed under this
subsection or violated the terms of the
standard operating procedure agreement between
that preferred lender and the Administration,
the Administrator shall do 1 or more of the
following:
(i) Exclude the preferred lender from
participating in the program under this
subsection.
(ii) Exclude the preferred lender
from participating in the Preferred
Lender Program for a period of not more
than 5 years.
(8) Fees.--
(A) In general.--The Administrator may not
collect a guarantee fee under this subsection.
(B) Origination fee.--The Administrator may
pay a qualified private lender or preferred
lender an origination fee for a loan guaranteed
under this subsection in an amount agreed upon
in advance between the qualified private lender
or preferred lender and the Administrator.
(9) Documentation.--A qualified private lender or
preferred lender may use its own loan documentation for
a loan guaranteed by the Administrator under this
subsection, to the extent authorized by the
Administrator. The ability of a lender to use its own
loan documentation for a loan guaranteed under this
subsection shall not be considered part of the criteria
for becoming a qualified private lender under the
regulations promulgated under paragraph (10).
(10) Implementation regulations.--
(A) In general.--Not later than 1 year after
the date of enactment of the Small Business
Disaster Response and Loan Improvements Act of
2008, the Administrator shall issue final
regulations establishing permanent criteria for
qualified private lenders.
(B) Report to congress.--Not later than 6
months after the date of enactment of the Small
Business Disaster Response and Loan
Improvements Act of 2008, the Administrator
shall submit a report on the progress of the
regulations required by subparagraph (A) to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives.
(11) Authorization of appropriations.--
(A) In general.--Amounts necessary to carry
out this subsection shall be made available
from amounts appropriated to the Administration
to carry out subsection (b).
(B) Authority to reduce interest rates and
other terms and conditions.--Funds appropriated
to the Administration to carry out this
subsection, may be used by the Administrator to
meet the loan terms and conditions specified in
paragraph (6).
(12) Purchase of loans.--The Administrator may enter
into an agreement with a qualified private lender or
preferred lender to purchase any loan guaranteed under
this subsection.
(d)(1) The Administration may further extend the maturity of
or renew any loan made pursuant to this section, or any loan
transferred to the Administration pursuant to Reorganization
Plan Numbered 2 of 1954, or Reorganization Plan Numbered 1 of
1957, for additional periods not to exceed ten years beyond the
period stated therein, if such extension or renewal will aid in
the orderly liquidation of such loan.
(2) During any period in which principal and interest
charges are suspended on the Federal share of any loan,
as provided in subsection (b), the Administrator shall,
upon the request of any person, firm, or corporation
having a participation in such loan, purchase such
participation, or assume the obligation of the
borrower, for the balance of such period, to make
principal and interest payments on the non-Federal
share of such loan: Provided, That no such payments
shall be made by the Administrator in behalf of any
borrower unless (i) the Administrator determines that
such action is necessary in order to avoid a default,
and (ii) the borrower agrees to make payments to the
Administration in an agreegate amount equal to the
amount paid in its behalf by the Administrator, in such
manner and at such time (during or after the term of
the loan) as the Administrator shall determine having
due regard to the purposes sought to be achieved by
this paragraph.
(3) With respect to a disaster occurring on or after
October 1, 1978, and prior the effective date of this
Act, on the Administration's share of loans made
pursuant to paragraph (1) of subsection (b)--
(A) if the loan proceeds are to
repair or replace a primary residence
and/or repair or replace damaged or
destroyed personal property, the
interest rate shall be 3 percent on the
first $55,000 of such loan;
(B) if the loan proceeds are to
repair or replace property damaged or
destroyed and if the applicant is a
business concern which is unable to
obtain sufficient credit elsewhere, the
interest rate shall be as determined by
the Administration, but not in excess
of 5 percent per annum; and
(C) if the loan proceeds are to repair or
replace property damaged or destroyed and if
the applicant is a business concern which is
able to obtain sufficient credit elsewhere, the
interest rate shall not exceed the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans and adjusted to the
nearest one-eight of 1 percent, and an
additional amount as determined by the
Administration, but not to exceed 1 percent:
Provided, That three years after such loan is
fully disbursed and every two years thereafter
for the term of the loan, if the Administration
determines that the borrower is able to obtain
a loan from one-Federal sources at reasonable
rates and terms for loans of similar purposes
and periods of time, the borrower shall, upon
request by the Administration, apply for and
accept such a loan in sufficient amount to
repay the Administration: Provided further,
That no loan under subsection (b)(1) shall be
made, either directly or in cooperation with
banks or other lending institutions through
agreements to participate on an immediate or
deferred basis, if the total amount outstanding
and committed to the borrower under such
subsection would exceed $500,000 for each
disaster, unless an applicant constitutes a
major source of employment in an area suffering
a disaster, in which case the Administration,
in its discretion, may waive the $500,000
limitation.
(4) Notwithstanding the provisions of any other law,
the interest rate on the Federal share of any loan made
under subsection (b) shall be--
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by
the Administration but not more than one-half
the 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 comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eight of 1 per
centum but not to exceed 8 per centum per
annum;
(B) in the case of a homeowner able to secure
credit elsewhere, the rate prescribed by the
Administration but not more than the 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 comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum;
(C) in the case of a business concern unable
to obtain credit elsewhere, not to exceed 8 per
centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by
the Administration but not in excess of the
rate prevailing in private market for similar
loans and not more than the rate prescribed by
the Administration as the maximum interest rate
for deferred participation (guaranteed) loans
under section 7(a) of this Act. Loans under
this subparagraph shall be limited to a maximum
term of three years.
(5) Notwithstanding the provisions of any other law,
the interest rate on the Federal share of any loan made
under subsection (b)(1) and (b)(2) on account of a
disaster commencing on or after October 1, 1982, shall
be--
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by
the Administration but not more than one-half
the 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 comparable to the average
maturities of such loan plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 4 per centum per
annum;
(B) in the case of a homeowner, able to
secure credit elsewhere, the rate prescribed by
the Administration but not more than the 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 comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 8 per centum per
annum;
(C) in the case of a business, private
nonprofit organization, or other concern,
including agricultural cooperatives, unable to
obtain credit elsewhere, not to exceed 4 per
centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by
the Administration but not in excess of the
lowest of (i) the rate prevailing in the
private market for similar loans, (ii) the rate
prescribed by the Administration as the maximum
interest rate for deferred participation
(guaranteed) loans under section 7(a) of this
Act, or (iii) 8 per centum per annum. Loans
under this subparagraph shall be limited to a
maximum term of 7 years.
(6) Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
be in amounts equal to 100 per centum of loss. The
interest rate for loans made under paragraphs 7(b)(1)
and (2), as determined pursuant to paragraph (5), shall
be the rate of interest which is in effect on the date
of the disaster commenced: Provided, That no loan under
paragraphs 7(b) (1) and (2) shall be made, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred (guaranteed) basis, if the total
amount outstanding and committed to the borrower under
subsection 7(b) would exceed $500,000 for each disaster
unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which
case the Administration, in its discretion, may waive
the $500,000 limitation: Provided further, That the
Administration, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
not reduce the amount of eligibility for any homeowner
on account of loss of real estate to less than $100,000
for each disaster nor for any homeowner or lessee on
account of loss of personal property to less than
$20,000 for each disaster, such sums being in addition
to any eligible refinancing: Provided further, That the
Administration shall not require collateral for loans
of $25,000 or less (or such higher amount as the
Administrator determines appropriate in the event of a
disaster) which are made under paragraph (1) of
subsection (b): Provided further, That the
Administrator, in obtaining the best available
collateral for a loan of not more than $200,000 under
paragraph (1) or (2) of subsection (b) relating to
damage to or destruction of the property of, or
economic injury to, a small business concern, shall not
require the owner of the small business concern to use
the primary residence of the owner as collateral if the
Administrator determines that the owner has other
assets of equal quality and with a value equal to or
greater than the amount of the loan that could be used
as collateral for the loan: Provided further, That
nothing in the preceding proviso may be construed to
reduce the amount of collateral required by the
Administrator in connection with a loan described in
the preceding proviso or to modify the standards used
to evaluate the quality (rather than the type) of such
collateral. Employees of concerns sharing a common
business premises shall be aggregated in determining
``major source of employment'' status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding on the date of
enactment of this paragraph and which was made on account of a
disaster commencing on or after October 1, 1982, the
Administrator shall made such change in the interest rate on
the balance of such loan as is required herein effective as of
the date of enactment.
=======================================================================
[Note: Effective on November 25, 2019, section 2102(b) of
Public Law 114-88 (as amended) provides for amendments to the
third proviso of section 7(d)(6). Upon such date, paragraph (6)
will read as follows:]
(6) Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
be in amounts equal to 100 per centum of loss. The
interest rate for loans made under paragraphs 7(b)(1)
and (2), as determined pursuant to paragraph (5), shall
be the rate of interest which is in effect on the date
of the disaster commenced: Provided, That no loan under
paragraphs 7(b) (1) and (2) shall be made, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred (guaranteed) basis, if the total
amount outstanding and committed to the borrower under
subsection 7(b) would exceed $500,000 for each disaster
unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which
case the Administration, in its discretion, may waive
the $500,000 limitation: Provided further, That the
Administration, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
not reduce the amount of eligibility for any homeowner
on account of loss of real estate to less than $100,000
for each disaster nor for any homeowner or lessee on
account of loss of personal property to less than
$20,000 for each disaster, such sums being in addition
to any eligible refinancing: Provided further, That the
Administration shall not require collateral for loans
of $14,000 or less (or such higher amount as the
Administrator determines appropriate in the event of a
major disaster) which are made under paragraph (1) of
subsection (b): Provided further, That the
Administrator, in obtaining the best available
collateral for a loan of not more than $200,000 under
paragraph (1) or (2) of subsection (b) relating to
damage to or destruction of the property of, or
economic injury to, a small business concern, shall not
require the owner of the small business concern to use
the primary residence of the owner as collateral if the
Administrator determines that the owner has other
assets of equal quality and with a value equal to or
greater than the amount of the loan that could be used
as collateral for the loan: Provided further, That
nothing in the preceding proviso may be construed to
reduce the amount of collateral required by the
Administrator in connection with a loan described in
the preceding proviso or to modify the standards used
to evaluate the quality (rather than the type) of such
collateral. Employees of concerns sharing a common
business premises shall be aggregated in determining
``major source of employment'' status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding on the date of
enactment of this paragraph and which was made on account of a
disaster commencing on or after October 1, 1982, the
Administrator shall made such change in the interest rate on
the balance of such loan as is required herein effective as of
the date of enactment.
=======================================================================
(7) The Administration shall not withhold disaster assistance
pursuant to this paragraph to nurseries who are victims of
drought disasters. As used in section 7(b)(2) the term ``an
area affected by a disaster'' includes any county, or county
contiguous thereto, determined to be a disaster by the
President, the Secretary of Agriculture or the Administrator of
the Small Business Administration.
(8) Disaster loans for superstorm sandy.--
(A) In general.--Notwithstanding any other
provision of law, and subject to the same
requirements and procedures that are used to
make loans pursuant to subsection (b), a small
business concern, homeowner, nonprofit entity,
or renter that was located within an area and
during the time period with respect to which a
major disaster was declared by the President
under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170) by reason of Superstorm Sandy
may apply to the Administrator--
(i) for a loan to repair,
rehabilitate, or replace property
damaged or destroyed by reason of
Superstorm Sandy; or
(ii) if such a small business concern
has suffered substantial economic
injury by reason of Superstorm Sandy,
for a loan to assist such a small
business concern.
(B) Timing.--The Administrator shall select
loan recipients and make available loans for a
period of not less than 1 year after the date
on which the Administrator carries out this
authority.
(C) Inspector general review.--Not later than
6 months after the date on which the
Administrator begins carrying out this
authority, the Inspector General of the
Administration shall initiate a review of the
controls for ensuring applicant eligibility for
loans made under this paragraph.
(e) The Administration shall not fund any Small Business
Development Center or any variation thereof, except as
authorized in section 21 of this Act.
(f) Additional Requirements for 7(b) Loans.--
(1) Increased deferment authorized.--
(A) In general.--In making loans under
subsection (b), the Administrator may provide,
to the person receiving the loan, an option to
defer repayment on the loan.
(B) Period.--The period of a deferment under
subparagraph (A) may not exceed 4 years.
(g) Net Earnings Clauses Prohibited for 7(b) Loans.--In
making loans under subsection (b), the Administrator shall not
require the borrower to pay any non-amortized amount for the
first five years after repayment begins.
(e) [RESERVED].
(f) [RESERVED].
(h)(1) The Administration also is empowered, where other
financial assistance is not available on reasonable terms, to
make such loans (either directly or in cooperation with Banks
or other lending institutions through agreements to participate
on an immediate or deferred basis) as the Administration may
determine to be necessary or appropriate--
(A) to assist any public or private organization--
(i) which is organized under the laws of the
United States or of any State, operated in the
interest of handicapped individuals, the net
income of which does not inure in whole or in
part to the benefit of any shareholder or other
individual;
(ii) which complies with any applicable
occupational health and safety standard
prescribed by the Secretary of Labor; and
(iii) which, in the production of commodities
and in the provision of services during any
fiscal year in which it receives financial
assistance under this subsection, employs
handicapped individuals for not less than 75
per centum of the man-hours required for the
production or provision of the commodities or
services; or
(B) to assist any handicapped individual in
establishing, acquiring, or operating a small business
concern.
(2) The Administration's share of any loan made under this
subsection shall not exceed $350,000, nor may any such loan be
made if the total amount outstanding and committed (by
participation or otherwise) to the borrower from the business
loan and investment fund established by section 4(c)(1)(B) of
this Act would exceed $350,000. In agreements to participate in
loans on a deferred basis under this subsection, the
Administration's participation may total 100 per centum of the
balance of the loan at the time of disbursement. The
Administration's share of any loan made under this subsection
shall bear interest at the rate of 3 per centum per annum. The
maximum term of any such loan, including extensions and
renewals thereof, may not exceed fifteen years. All loans made
under this subsection shall be of such sound value or so
secured as reasonably to assure repayment: Provided, however,
That any reasonable doubt shall be resolved in favor of the
applicant.
(3) For purposes of this subsection, the term ``handicapped
individual'' means a person who has a physical, mental, or
emotional impairment, defect, ailment, disease, or disability
of a permanent nature which in any way limits the selection of
any type of employment for which the person would otherwise be
qualified or qualifiable.
(i)(1) The Administration also is empowered to make,
participate (on an immediate basis) in, or guarantee loans,
repayable in not more than fifteen years, to any small business
concern, or to any qualified person seeking to establish such a
concern, when it determines that such loans will further the
policies established in section 2(b) of this Act, with
particular emphasis on the preservation or establishment of
small business concerns located in urban or rural areas with
high proportions of unemployed or low-income individuals, or
owned by low-income individuals: Provided, however, That no
such loans shall be made, participated in, or guaranteed if the
total of such Federal assistance to a single borrower
outstanding at any one time would exceed $100,000. The
Administration may defer payments on the principal of such
loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful
establishment and operation of such concern. The Administration
may, in its discretion, as a condition of such financial
assistance, require that the borrower take steps to improve his
management skills by participating in a management training
program approved by the Administration: Provided, however, That
any management training program so approved must be of
sufficient scope and duration to provide reasonable opportunity
for the individuals served to develop entrepreneurial and
managerial self-sufficiency.
(2) The Administration shall encourage, as far as possible,
the participation of the private business community in the
program of assistance to such concerns, and shall seek to
stimulate new private lending activities to such concerns
through the use of the loan guarantees, participations in
loans, and pooling arrangements authorized by this subsection.
(3) To insure an equitable distribution between urban and
rural areas for loans between $3,500 and $100,000 made under
this subsection, the Administration is authorized to use the
agencies and agreements and delegations developed under title
III of the Economic Opportunity Act of 1964, as amended, as it
shall determine necessary.
(4) The Administration shall provide for the continuing
evaluation of programs under this subsection, including full
information on the location, income characteristics, and types
of businesses and individuals assisted, and on new private
lending activity stimulated, and the results of such evaluation
together with recommendations shall be included in the report
required by section 10(a) of this Act.
(5) Loans made pursuant to this subsection (including
immediate participation in and guarantees of such loans) shall
have such terms and conditions as the Administration shall
determine, subject to the following limitations--
(A) there is reasonable assurance of repayment of the
loan;
(B) the financial assistance is not otherwise
available on reasonable terms from private sources or
other Federal, State, or local programs;
(C) the amount of the loan, together with other funds
available, is adequate to assure completion of the
project or achievement of the purposes for which the
loan is made;
(D) the loan bears interest at a rate not less than
(i) a rate determined by the Secretary of the Treasury,
taking into consideration the average market yield on
outstanding Treasury obligations of comparable
maturity, plus (ii) such additional charge, if any,
toward covering other costs of the program as the
Administration may determine to be consistent with its
purposes: Provided, however, That the rate of interest
charged on loans made in redevelopment areas designated
under the Public Works and Economic Development Act of
1965 (42 U.S.C. 3108 et seq.) shall not exceed the rate
currently applicable to new loans made under section
201 of that Act (42 U.S.C. 3142); and
(E) fees not in excess of amounts necessary to cover
administrative expenses and probable losses may be
required on loan guarantees.
(6) The Administration shall take such steps as may be
necessary to insure that, in any fiscal year, at least 50 per
centum of the amounts loaned or guaranteed pursuant to this
subsection are allotted to small business concerns located in
urban areas identified by the Administration as having high
concentrations of unemployed or low-income individuals or to
small business concerns owned by low-income individuals. The
Administration shall define the meaning of low income as it
applies to owners of small business concerns eligible to be
assisted under this subsection.
(7) No financial assistance shall be extended pursuant to
this subsection when the Administration determines that the
assistance will be used in relocating establishments from one
area to another if such relocation would result in an increase
in unemployment in the area of original location.
(j)(1) the Administration shall provide financial assistance
to public or private organizations to pay all or part of the
cost of projects designated to provide technical or management
assistance to individuals or enterprises eligible for
assistance under sections 7(i), 7(j)(10), and 8(a) of this Act,
with special attention to small businesses located in areas of
high concentration of unemployed or low-income individuals, to
small businesses eligible to receive contracts pursuant to
section 8(a) of this Act.
(2) Financial assistance under this subsection may be
provided for projects, including, but not limited to--
(A) planning and research, including feasibility
studies and market research;
(B) the identification and development of new
business opportunities;
(C) the furnishing of centralized services with
regard to public services and Federal Government
programs including programs authorized under sections
7(i), (7)(j)(10), and 8(a) of this Act;
(D) the establishment and strengthening of business
service agencies, including trade associations and
cooperative; and
(E) the furnishing of business counseling, management
training, and legal and other related services, with
special emphasis on the development of management
training programs using the resources of the business
community, including the development of management
training opportunities in existing business, and with
emphasis in all cases upon providing management
training of sufficient scope and duration to develop
entrepreneurial and managerial self-sufficiency on the
part of the individuals served.
(3) The Administration shall encourage the placement of
subcontracts by businesses with small business concerns located
in area of high concentration of unemployed or low-income
individuals, with small businesses owned by low-income
individuals, and with small businesses eligible to receive
contracts pursuant to section 8(a) of this Act. The
Administration may provide incentives and assistance to such
businesses that will aid in the training and upgrading of
potential subcontractors or other small business concerns
eligible for assistance under section 7(i), 7(j), and 8(a), of
this Act.
(4) The Administration shall give preference to projects
which promote the ownership, participation in ownership, or
management of small businesses owned by low-income individuals
and small businesses eligible to receive contracts pursuant to
section 8(a) of this Act.
(5) The financial assistance authorized for projects under
this subsection includes assistance advanced by grant,
agreement, or contract.
(6) The Administration is authorized to make payments under
grants and contracts entered into under this subsection in lump
sum or installments, and in advance or by way of reimbursement,
and in the case of grants, with necessary adjustments on
account of overpayments or underpayments.
(7) To the extent feasible, services under this subsection
shall be provided in a location which is easily accessible to
the individuals and small business concerns served.
(9) The Administration shall take such steps as may be
necessary and appropriate, in coordination and cooperation with
the heads of other Federal departments and agencies, to insure
that contracts, subcontracts, and deposits made by the Federal
Government or with programs aided with Federal funds are placed
in such way as to further the purposes of sections 7(i), 7(j),
and 8(a) of this Act.
(10) There is established with the Administration a small
business and capital ownership development program (hereinafter
referred to as the ``Program'') which shall provide assistance
exclusively for small business concerns eligible to receive
contracts pursuant to section 8(a) of this Act. The program,
and all other services and activities authorized under section
7(j) and 8(a) of this Act, shall be managed by the Associate
Administrator for Minority Small Business and Capital Ownership
Development under the supervision of, and responsible to, the
Administrator.
(A) The Program shall--
(i) assist small business concerns
participating in the Program (either through
public or private organizations) to develop and
maintain comprehensive business plans which set
forth the Program Participant's specific
business targets, objectives, and goals
developed and maintained in conformity with
subparagraph (D).
(ii) provide for such other nonfinancial
services as deemed necessary for the
establishment, preservation, and growth of
small business concerns participating in the
Program, including but not limited to (I) loan
packaging, (II) financing counseling, (III)
accounting and bookkeeping assistance, (IV)
marketing assistance, and (V) management
assistance;
(iii) assist small business concerns
participating in the Program to obtain equity
and debt financing;
(iv) establish regular performance monitoring
and reporting systems for small business
concerns participating in the Program to assure
compliance with their business plans;
(v) analyze and report the causes of success
and failure of small business concerns
participating in the Program; and
(vi) provide assistance necessary to help
small business concerns participating in the
Program to procure surety bonds, with such
assistance including, but not limited to, (I)
the preparation of application forms required
to receive a surety bond, (II) special
management and technical assistance designed to
meet the specific needs of small business
concerns participating in the Program and which
have received or are applying to receive a
surety bond, and (III) guarantee from the
Administration pursuant to title IV, part B of
the Small Business Investment Act of 1958.
(B) Small business concerns eligible to receive
contracts pursuant to section 8(a) of this Act shall
participate in the Program.
(C)(i) A small business concern participating in any
program or activity conducted under the authority of
this paragraph or eligible for the award of contracts
pursuant to section 8(a) on September 1, 1988, shall be
permitted continued participation and eligibility in
such program or activity for a period of time which is
the greater of--
(I) 9 years less the number of years since
the award of its first contract pursuant to
section 8(a); or
(II) its original fixed program participation
term (plus any extension thereof) assigned
prior to the effective date of this paragraph
plus eighteen months.
(ii) Nothing contained in this subparagraph shall be
deemed to prevent the Administration from instituting a
termination or graduation pursuant to subparagraph (F)
or (H) for issues unrelated to the expiration of any
time period limitation.
(D)(i) Promptly after certification under paragraph
(11) a Program Participant shall submit a business plan
(hereinafter referred to as the plan'') as described in
clause (ii) of this subparagraph for review by the
Business Opportunity Specialist assigned to assist such
Program Participant. The plan may be a revision of a
preliminary business plan submitted by the Program
Participant or required by the Administration as a part
of the application for certification under this section
and shall be designed to result in the Program
Participant eliminating the conditions or circumstances
upon which the Administration determined eligibility
pursuant to section 8(a)(6). Such plan, and subsequent
modifications submitted under clause (iii) of this
subparagraph, shall be approved by the business
opportunity specialist prior to the Program Participant
being eligible for award of a contract pursuant to
section 8(a).
(ii) The plans submitted under this
subparagraph shall include the following:
(I) An analysis of market potential,
competitive environment, and other
business analyses estimating the
Program Participant's prospects for
profitable operations during the term
of program participation and after
graduation.
(II) An analysis of the Program
Participant's strengths and weaknesses
with particular attention to correcting
any financial, managerial, technical,
or personnel conditions which are
likely to impede the small business
concern from receiving contracts other
than those awarded under section 8(a).
(III) Specific targets, objectives,
and goals, for the business development
of the Program Participant during the
next and succeeding years utilizing the
results of the analyses conducted
pursuant to subclauses (I) and (II).
(IV) A transition management plan
outlining specific steps to assure
profitable business operations after
graduation (to be incorporated into the
Program Participant's plan during the
first year of the transitional stage of
Program participation).
(V) Estimates of contract awards
pursuant to section 8(a) and from other
sources, which the Program Participant
will require to meet the specific
targets, objectives, and goals for the
years covered by its plan. The
estimates established shall be
consistent with the provisions of
subparagraph (I) and section 8(a).
(iii) Each Program Participant shall annually
review its currently approved plan with its
Business Opportunity Specialist and modify such
plan as may be appropriate. Any modified plan
shall be submitted to the Administration for
approval. The currently approved plan shall be
considered valid until such time as a modified
plan is approved by the Business Opportunity
Specialist. Annual reviews pertaining to years
in the transitional stage of program
participation shall require, as appropriate, a
written verification that such Program
Participant has complied with the requirements
of subparagraph (I) relating to attaining
business activity from sources other than
contracts awarded pursuant to section 8(a).
(iv) Each Program Participant shall annually
forecast its needs for contract awards under
section 8(a) for the next program year and the
succeeding program year during the review of
its business plan, conducted pursuant to clause
(iii). Such forecast shall be known as the
section 8(a) contract support level and shall
be included in the Program Participant's
business plan. Such forecast shall include--
(I) the aggregate dollar value of
contract support to be sought on a
noncompetitive basis under section
8(a), reflecting compliance with the
requirements of subparagraph (I)
relating to attaining business activity
from sources other than contracts
awarded pursuant to section 8(a),
(II) the types of contract
opportunities being sought, identified
by Standard Industrial Classification
(SIC) Code or otherwise,
(III) an estimate of the dollar value
of contract support to be sought on a
competitive basis, and
(IV) such other information as may be
requested by the Business Opportunity
Specialist to provide effective
business development assistance to the
Program Participant.
(E) A small business concern participating in the
program conducted under the authority of this paragraph
and eligible for the award of contracts pursuant to
section 8(a) shall be denied all such assistance if
such concern--
(i) voluntarily elects not to continue
participation;
(ii) completes the period of Program
participation as prescribed by paragraph (15);
(iii) is terminated pursuant to a termination
proceeding conducted in accordance with section
8(a)(9); or
(iv) is graduated pursuant to a graduation
proceeding conducted in accordance with section
8(a)(9).
(F) For the purposes of section and 8(a), the terms
``terminated'' or ``termination'' means the total
denial or suspension of assistance under this paragraph
or under section 8(a) prior to the graduation of the
participating small business concern or prior to the
expiration of the maximum program participation in
term. An action for termination shall be based upon
good cause, including--
(i) the failure by such concern to maintain
its eligibility for Program participation;
(ii) the failure of the concern to engage in
business practices that will promote its
competitiveness within a reasonable period of
time as evidenced by, among other indicators, a
pattern of unjustified delinquent performance
or terminations for default with respect to
contracts awarded under the authority of
section 8(a);
(iii) a demonstrated pattern of failing to
make required submissions or responses to the
Administration in a timely manner;
(iv) the willful violation of any rule or
regulation of the Administration pertaining to
material issues;
(v) the debarment of the concern or its
disadvantaged owners by any agency pursuant to
subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged
owner or an officer of the concern for any
offense indicating a lack of business integrity
including any conviction for embezzlement,
theft, forgery, bribery, falsification or
violation of section 16. For purposes of this
clause, no termination action shall be taken
with respect to a disadvantaged owner solely
because of the conviction of an officer of the
concern (who is other than a disadvantaged
owner) unless such owner conspired with,
abetted, or otherwise knowingly acquiesced in
the activity or omission that was the basis of
such officer's conviction.
(G) The Director of the Division may initiate a
termination proceeding by recommending such action to
the Associate Administrator for Minority Small Business
and Capital Ownership Development. Whenever the
Associate Administrator, or a designee of such officer,
determines such termination is appropriate, within 15
days after making such a determination the Program
Participant shall be provided a written notice of
intent to terminate, specifying the reasons for such
action. No Program Participant shall be terminated from
the Program pursuant to subparagraph (F) without first
being afforded an opportunity for a hearing in
accordance with section 8(a)(9).
(H) For the purposes of sections 7(j) and 8(a) the
term ``graduated'' or ``graduation'' means that the
Program Participant is recognized as successfully
completing the program by substantially achieving the
targets, objectives, and goals contained in the
concern's business plan thereby demonstrating its
ability to compete in the marketplace without
assistance under this section or section 8(a).
(I)(i) During the developmental stage of its
participation in the Program, a Program Participant
shall take all reasonable efforts within its control to
attain the targets contained in its business plan for
contracts awarded other than pursuant to section 8(a)
(hereinafter referred to as ``business activity
targets.''). Such efforts shall be made a part of the
business plan and shall be sufficient in scope and
duration to satisfy the Administration that the Program
Participant will engage a reasonable marketing strategy
that will maximize its potential to achieve its
business activity targets.
(ii) During the transitional stage of the Program a
Program Participant shall be subject to regulations
regarding business activity targets that are
promulgated by the Administration pursuant to clause
(iii);
(iii) The regulations referred to in clause (ii)
shall:
(I) establish business activity targets
applicable to Program Participants during the
fifth year and each succeeding year of Program
Participation; such targets, for such period of
time, shall reflect a reasonably consistent
increase in contracts awarded other than
pursuant to section 8(a), expressed as a
percentage of total sales; when promulgating
business activity targets the Administration
may establish modified targets for Program
Participants that have participated in the
Program for a period of longer than four years
on the effective date of this subparagraph;
(II) require a Program Participant to attain
its business activity targets;
(III) provide that, before the receipt of any
contract to be awarded pursuant to section
8(a), the Program Participant (if it is in the
transitional stage) must certify that it has
complied with the regulations promulgated
pursuant to subclause (II), or that it is in
compliance with such remedial measures as may
have been ordered pursuant to regulations
issued under subclause (V);
(IV) require the Administration to review
each Program Participant's performance
regarding attainment of business activity
targets during periodic reviews of such
Participant's business plan; and
(V) authorize the Administration to take
appropriate remedial measures with respect to a
Program Participant that has failed to attain a
required business activity target for the
purpose of reducing such Participant's
dependence on contracts awarded pursuant to
section 8(a); such remedial actions may
include, but are not limited to assisting the
Program Participant to expand the dollar volume
of its competitive business activity or
limiting the dollar volume of contracts awarded
to the Program Participant pursuant to section
8(a); except for actions that would constitute
a termination, remedial measures taken pursuant
to this subclause shall not be reviewable
pursuant to section 8(a)(9).
(J)(i) The Administration shall conduct an evaluation
of a Program Participant's eligibility for continued
participation in the Program whenever it receives
specific and credible information alleging that such
Program Participant no longer meets the requirements
for Program eligibility. Upon making a finding that a
Program Participant is no longer eligible, the
Administration shall initiate a termination proceeding
in accordance with subparagraph (F). A Program
Participant's eligibility for award of any contract
under the authority of section 8(a) may be suspended
pursuant to subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation).
(ii)(I) Except as authorized by subclauses (II) or
(III), no award shall be made pursuant to section 8(a)
to a concern other than a small business concern.
(II) In determining the size of a small business
concern owned by a socially and economically
disadvantaged Indian tribe (or a wholly owned business
entity of such tribe), each firm's size shall be
independently determined without regard to its
affiliation with the tribe, any entity of the tribal
government, or any other business enterprise owned by
the tribe, unless the Administrator determines that one
or more such tribally owned business concerns have
obtained, or are likely to obtain, a substantial unfair
competitive advantage within an industry category.
(III) Any joint venture established under the
authority of section 602(b) of Public Law 100-656, the
``Business Opportunity Development Reform Act of
1988'', shall be eligible for award of a contract
pursuant to section 8(a).
(11)(A) The Associate Administrator for Minority Small
Business and Capital Ownership Development shall be responsible
for coordinating and formulating policies relating to Federal
assistance to small business concerns eligible for assistance
under section 7(i) of this Act and small business concerns
eligible to receive contracts pursuant to section 8(a) of this
Act.
(B)(i) Except as provided in clause (iii), no
individual who was determined pursuant to section 8(a)
to be socially and economically disadvantaged before
the effective date of this subparagraph shall be
permitted to assert such disadvantage with respect to
any other concern making application for certification
after such effective date.
(ii) Except as provided in clause (iii), any
individual upon whom eligibility is based
pursuant to section 8(a)(4) shall be permitted
to assert such eligibility for only one small
business concern.
(iii) A socially and economically
disadvantaged Indian tribe may own more than
one small business concern eligible for
assistance pursuant to section 7(j)(10) and
section 8(a) if--
(I) the Indian tribe does not own
another firm in the same industry which
has been determined to be eligible to
receive contracts under this program,
and
(II) the individuals responsible for
the management and daily operations of
the concern do not manage more than two
Program Participants.
(C) No concern, previously eligible for the award of
contracts pursuant to section 8(a), shall be subsequently
recertified for program participation if its prior
participation in the program was concluded for any of the
reasons described in paragraph (10)(E).
(D) A concern eligible for the award of contracts pursuant to
this subsection shall remain eligible for such contracts if
there is a transfer of ownership and control (as defined
pursuant to section 8(a)(4)) to individuals who are determined
to be socially and economically disadvantaged pursuant to
section 8(a). In the event of such a transfer, the concern, if
not terminated or graduated, shall be eligible for a period of
continued participation in the program not to exceed the time
limitations prescribed in paragraph (15).
(E) There is established a Division of Program Certification
and Eligibility (hereinafter referred to in this paragraph as
the Division'') that shall be made part of the Office of
Minority Small Business and Capital Ownership Development. The
Division shall be headed by a Director who shall report
directly to the Associate Administrator for Minority Small
Business and Capital Ownership Development. The Division shall
establish field offices within such regional offices of the
Administration as may be necessary to perform efficiently its
functions and responsibilities.
(F) Subject to the provisions of section 8(a)(9), the
functions and responsibility of the Division are to--
(i) receive, review and evaluate applications for
certification pursuant to paragraphs (4), (5), (6) and
(7) of section 8(a);
(ii) advise each program applicant within 15 days
after the receipt of an application as to whether such
application is complete and suitable for evaluation
and, if not, what matters must be rectified;
(iii) render recommendations on such applications to
the Associate Administrator for Minority Small Business
and Capital Ownership Development;
(iv) review and evaluate financial statements and
other submissions from concerns participating in the
program established by paragraph (10) to ascertain
continued eligibility to receive subcontracts pursuant
to section 8(a);
(v) make a request for the initiation of termination
or graduation proceedings, as appropriate, to the
Associate Administrator for Minority Small Business and
Capital Ownership Development;
(vi) make recommendations to the Associate
Administrator for Minority Small Business and Capital
Ownership Development concerning protests from
applicants that have been denied program admission;
(vii) decide protests regarding the status of a
concern as a disadvantaged concern for purposes of any
program or activity conducted under the authority of
subsection (d) of section 8, or any other provision of
Federal law that references such subsection for a
definition of program eligibility; and
(vii) implement such policy directives as may be
issued by the Associate Administrator for Minority
Small Business and Capital Ownership Development
pursuant to subparagraph (I) regarding, among other
things, the geographic distribution of concerns to be
admitted to the program and the industrial make-up of
such concerns.
(G) An applicant shall not be denied admission into the
program established by paragraph (10) due solely to a
determination by the Division that specific contract
opportunities are unavailable to assist in the development of
such concern unless--
(i) the Government has not previously procured and is
unlikely to procure the types of products or services
offered by the concern; or
(ii) the purchases of such products or services by
the Federal Government will not be in quantities
sufficient to support the developmental needs of the
applicant and other Program Participants providing the
same or similar items or services.
(H) Not later than 90 days after receipt of a
completed application for Program certification, the
Associate Administrator for Minority Small Business and
Capital Ownership Development shall certify a small
business concern as a Program Participant or shall deny
such application.
(I) Thirty days before the conclusion of each fiscal year,
the Director of the Division shall review all concerns that
have been admitted into the Program during the preceding 12-
month period. The review shall ascertain the number of
entrants, their geographic distribution and industrial
classification. The Director shall also estimate the expected
growth of the Program during the next fiscal year and the
number of additional Business Opportunity Specialists, if any,
that will be needed to meet the anticipated demand for the
Program. The findings and conclusions of the Director shall be
reported to the Associate Administrator for Minority Small
Business and Capital Ownership Development by September 30 of
each year. Based on such report and such additional data as may
be relevant, the Associate Administrator shall, by October 31
of each year, issue policy and program directives applicable to
such fiscal year that--
(i) establish priorities for the solicitation of
program applications from underrepresented regions and
industry categories;
(ii) assign staffing levels and allocate other
program resources as necessary to meet program needs;
and
(iii) establish priorities in the processing and
admission of new Program Participants as may be
necessary to achieve an equitable geographic
distribution of concerns and a distribution of concerns
across all industry categories in proportions needed to
increase significantly contract awards to small
business concerns owned and controlled by socially and
economically disadvantaged individuals. When
considering such increase the Administration shall give
due consideration to those industrial categories where
Federal purchases have been substantial but where the
participation rate of such concerns has been limited.
(12)(A) The Administration shall segment the Capital
Ownership Development Program into two stages: a developmental
stage; and a transitional stage.
(B) The developmental stage of program participation shall be
designed to assist the concern in its effort to overcome its
economic disadvantage by providing such assistance as may be
necessary and appropriate to access its markets and to
strengthen its financial and managerial skills.
(C) The transitional stage of program participation shall be
designed to overcome, insofar as practicable, the remaining
elements of economic disadvantage and to prepare such concern
for graduation from the program.
(13) A Program Participant, if otherwise eligible, shall be
qualified to receive the following assistance during the stages
of program participation specified in paragraph 12:
(A) Contract support pursuant to section 8(a).
(B) Financial assistance pursuant to section
7(a)(20).
(C) A maximum of two exemptions from the requirements
of section 1(a) of the Act entitled ``An Act providing
conditions for the purchase of supplies and the making
of contracts by the United States, and for other
purposes'', approved June 30, 1936 (49 Stat. 2036),
which exemptions shall apply only to contracts awarded
pursuant to section (8)(a) and shall only be used to
allow for contingent agreements by a small business
concern to acquire the machinery, equipment,
facilities, or labor needed to perform such contracts.
No exemption shall be made pursuant to this
subparagraph if the contract to which it pertains has
an anticipated value in excess of $10,000,000. This
subparagraph shall cease to be effective on October 1,
1992.
(D) A maximum of five exemptions from the
requirements of the Act entitled ``An Act requiring
contracts for the construction, alteration and repair
of any public building or public work of the United
States to be accompanied by a performance bond
protecting the United States and by an additional bond
for the protection of persons furnishing material and
labor for the construction, alteration, or repair of
said public buildings or public works'', approved
August 24, 1935 (49 Stat. 793), which exemptions shall
apply only to contracts awarded pursuant to section
8(a), except that, such exemptions may be granted under
this subparagraph only if--
(i) the Administration finds that such
concern is unable to obtain the requisite bond
or bonds from a surety and that no surety is
willing to issue a bond subject to the
guarantee provision of title IV of the Small
Business Investment Act of 1958 (15 U.S.C. 692
et seq.);
(ii) the Administration and the agency
providing the contracting opportunity have
provided for the protection of persons
furnishing materials or labor to the Program
Participant by arranging for the direct
disbursement of funds due to such persons by
the procuring agency or through any bank the
deposits of which are insured by the Federal
Deposit Insurance Corporation; and
(iii) the contract to which it pertains does
not exceed $3,000,000 in amount. This
subparagraph shall cease to be effective on
October 1, 1994.
(E) Financial assistance whereby the Administration
may purchase in whole or in part, and on behalf of such
concerns, skills training or upgrading for employees or
potential employees of such concerns. Such assistance
may be made without regard to section 18(a). Assistance
may be made by direct payment to the training provider
or by reimbursing the Program Participant or the
Participant's employee, if such reimbursement is found
to be reasonable and appropriate. For purposes of this
subparagraph the term ``training provider'' shall mean
an institution of higher education, a community or
vocational college, or an institution eligible to
provide skills training or upgrading under title I of
the Workforce Innovation and Opportunity Act. The
Administration shall, in consultation with the
Secretary of Labor, promulgate rules and regulations to
implement this subparagraph that establish acceptable
training and upgrading performance standards and
provide for such monitoring or audit requirements as
may be necessary to ensure the integrity of the
training effort. No financial assistance shall be
granted under the subparagraph unless the Administrator
determines that--
(i) such concern has documented that it has
first explored the use of existing cost-free or
cost-subsidized training programs offered by
public and private sector agencies working with
programs of employment and training and
economic development;
(ii) no more than five employees or potential
employees of such concern are recipients of any
benefits under this subparagraph at any one
time;
(iii) no more than $2,500 shall be made
available for any one employee or potential
employee;
(iv) the length of training or upgrading
financed by this subparagraph shall be no less
than one month nor more than six months;
(v) such concern has given adequate assurance
it will employ the trainee or upgraded employee
for at least six months after the training or
upgrading financed by this subparagraph has
been completed and each trainee or upgraded
employee has provided a similar assurance to
remain within the employ of such concern for
such period; if such concern, trainee, or
upgraded employee breaches this agreement, the
Administration shall be entitled to and shall
make diligent efforts to obtain from the
violating party the repayment of all funds
expended on behalf of the violating party, such
repayment shall be made to the Administration
together with such interest and costs of
collection as may be reasonable; the violating
party shall be barred from receiving any
further assistance under this subparagraph;
(vi) the training to be financed may take
place either at such concern's facilities or at
those of the training provider; and
(vii) such concern will maintain such records
as the Administration deems appropriate to
ensure that the provisions of this paragraph
and any other applicable law have not been
violated.
(F)(i) The transfer of technology or surplus property
owned by the United States to such a concern.
Activities designed to effect such transfer shall be
developed in cooperation with the heads of Federal
agencies and shall include the transfer by grant,
license, or sale of such technology or property to such
a concern. Such property may be transferred to Program
Participants on a priority basis. Technology or
property transferred under this subparagraph shall be
used by the concern during the normal conduct of its
business operation and shall not be sold or transferred
to any other party (other than the Government) during
such concern's term of participation in the Program and
for one year thereafter.
(ii)(I) In this clause--
(aa) the term ``covered period''
means the 2-year period beginning on
the date on which the President
declared the applicable major disaster;
and
(bb) the term ``disaster area'' means
the area for which the President has
declared a major disaster, during the
covered period.
(II) The Administrator may transfer
technology or surplus property under clause (i)
on a priority basis to a small business concern
located in a disaster area if--
(aa) the small business concern meets
the requirements for such a transfer,
without regard to whether the small
business concern is a Program
Participant; and
(bb) for a small business concern
that is a Program Participant, on and
after the date on which the President
declared the applicable major disaster,
the small business concern has not
received property under this
subparagraph on the basis of the status
of the small business concern as a
Program Participant.
(III) For any transfer of property under this
clause to a small business concern, the terms
and conditions shall be the same as a transfer
to a Program Participant, except that the small
business concern shall agree not to sell or
transfer the property to any party other than
the Federal Government during the covered
period.
(IV) A small business concern that receives a
transfer of property under this clause may not
receive a transfer of property under clause (i)
during the covered period.
(V) If a small business concern sells or
transfers property in violation of the
agreement described in subclause (III), the
Administrator may initiate proceedings to
prohibit the small business concern from
receiving a transfer of property under this
clause or clause (i), in addition to any other
remedy available to the Administrator.
(iii)(I) In this clause, the term ``covered period''
means the period beginning on the date of enactment of
this clause and ending on the date on which the
Oversight Board established under section 101 of the
Puerto Rico Oversight, Management, and Economic
Stability Act (48 U.S.C. 2121) terminates.
(II) The Administrator may transfer technology or
surplus property under clause (i) to a Puerto Rico
business if the Puerto Rico business meets the
requirements for such a transfer, without regard to
whether the Puerto Rico business is a Program
Participant.
(G) Training assistance whereby the Administration
shall conduct training sessions to assist individuals
and enterprises eligible to receive contracts under
section 8(a) in the development of business principles
and strategies to enhance their ability to successfully
compete for contracts in the marketplace.
(H) Joint ventures, leader-follower arrangements, and
teaming agreements between the Program Participant and
other Program Participants and other business concerns
with respect to contracting opportunities for the
research, development, full-scale engineering or
production of major systems. Such activities shall be
undertaken on the basis of programs developed by the
agency responsible for the procurement of the major
system, with the assistance of the Administration.
(I) Transitional management business planning
training and technical assistance.
(J) Program Participants in the developmental stage
of Program participation shall be eligible for the
assistance provided by subparagraphs (A), (B), (C),
(D), (E), (F), and (G).
(14) Program Participants in the transitional stage of
Program participation shall be eligible for the assistance
provided by subparagraphs (A), (B), (F), (G), (H), and (I) of
paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small
business concern may receive developmental assistance under the
Program and contracts under section 8(a) for a total period of
not longer than nine years, measured from the date of its
certification under the authority of such section, of which--
(A) no more than four years may be spent in the
developmental stage of Program Participation; and
(B) no more than five years may be spent in the
transitional stage of Program Participation.
(16)(A) The Administrator shall develop and implement a
process for the systematic collection of data on the operations
of the Program established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator
shall submit a report to the Congress on the Program that shall
include the following:
(i) The average personal net worth of individuals who
own and control concerns that were initially certified
for participation in the Program during the immediately
preceding fiscal year. The Administrator shall also
indicate the dollar distribution of net worths, at
$50,000 increments, of all such individuals found to be
socially and economically disadvantaged. For the first
report required pursuant to this paragraph the
Administrator shall also provide the data specified in
the preceding sentence for all eligible individuals in
the Program as of the effective date of this paragraph.
(ii) A description and estimate of the benefits and
costs that have accrued to the economy and the
Government in the immediately preceding fiscal year due
to the operations of those business concerns that were
performing contracts awarded pursuant to section 8(a).
(iii) A compilation and evaluation of those business
concerns that have exited the Program during the
immediately preceding three fiscal years. Such
compilation and evaluation shall detail the number of
concerns actively engaged in business operations, those
that have ceased or substantially curtailed such
operations, including the reasons for such actions, and
those concerns that have been acquired by other firms
or organizations owned and controlled by other than
socially and economically disadvantaged individuals.
For those businesses that have continued operations
after they exited from the Program, the Administrator
shall also separately detail the benefits and costs
that have accrued to the economy during the immediately
preceding fiscal year due to the operations of such
concerns.
(iv) A listing of all participants in the Program
during the preceding fiscal year identifying, by State
and by Region, for each firm: the name of the concern,
the race or ethnicity, and gender of the disadvantaged
owners, the dollar value of all contracts received in
the preceding year, the dollar amount of advance
payments received by each concern pursuant to contracts
awarded under section 8(a), and a description including
(if appropriate) an estimate of the dollar value of all
benefits received pursuant to paragraphs (13) and (14)
and section 7(a)(20) during such year.
(v) The total dollar value of contracts and options
awarded during the preceding fiscal year pursuant to
section 8(a) and such amount expressed as a percentage
of total sales of (I) all firms participating in the
Program during such year; and (II) of firms in each of
the nine years of program participation.
(vi) A description of such additional resources or
program authorities as may be required to provide the
types of services needed over the next two-year period
to service the expected portfolio of firms certified
pursuant to section 8(a).
(vii) The total dollar value of contracts and options
awarded pursuant to section 8(a), at such dollar
increments as the Administrator deems appropriate, for
each four digit standard industrial classification code
under which such contracts and options were classified.
(C) The first report required by subparagraph (B) shall
pertain to fiscal year 1990.
(k) In carrying out its functions under subsections 7(i),
7(j), and 8(a) of this Act, the Administration is authorized--
(1) to utilize, with their consent, the services and
facilities of Federal agencies without reimbursement,
and, with the consent of any State or political
subdivision of a State, accept and utilize the services
and facilities of such State or subdivision without
reimbursement;
(2) to accept, in the name of the Administration, and
employ or dispose of in furtherance of the purposes of
this Act, any money or property, real, personal, or
mixed, tangible, or intangible, received by gift,
device, bequest, or otherwise;
(3) to accept voluntary and uncompensated services,
notwithstanding the provisions of section 3679(b) of
the Revised Statutes (31 U.S.C. 655(b)); and
(4) to employ experts and consultants or
organizations thereof as authorized by section 15 of
the Administrative Expenses Act of 1946 (5 U.S.C. 55a),
except that no individual may be employed under the
authority of this subsection for more than one hundred
days in any fiscal year; to compensate individuals so
employed at rates not in excess of the daily equivalent
of the highest rate payable under section 5332 of title
5, United States Code, including traveltime; and to
allow them, while away from their homes or regular
places of business, travel expenses (including per diem
in lieu of subsistence) a authorized by section 5 of
such Act (5 U.S.C. 73b-2) for persons in the Government
service employed intermittently, while so employed:
Provided, however, That contracts for such employment
may be renewed annually.
(l) Small Business Intermediary Lending Pilot Program.--
(1) Definitions.--In this subsection--
(A) the term ``eligible intermediary''--
(i) means a private, nonprofit entity
that--
(I) seeks or has been awarded
a loan from the Administrator
to make loans to small business
concerns under this subsection;
and
(II) has not less than 1 year
of experience making loans to
startup, newly established, or
growing small business
concerns; and
(ii) includes--
(I) a private, nonprofit
community development
corporation;
(II) a consortium of private,
nonprofit organizations or
nonprofit community development
corporations; and
(III) an agency of or
nonprofit entity established by
a Native American Tribal
Government; and
(B) the term ``Program'' means the small
business intermediary lending pilot program
established under paragraph (2).
(2) Establishment.--There is established a 3-year
small business intermediary lending pilot program,
under which the Administrator may make direct loans to
eligible intermediaries, for the purpose of making
loans to startup, newly established, and growing small
business concerns.
(3) Purposes.--The purposes of the Program are--
(A) to assist small business concerns in
areas suffering from a lack of credit due to
poor economic conditions or changes in the
financial market; and
(B) to establish a loan program under which
the Administrator may provide loans to eligible
intermediaries to enable the eligible
intermediaries to provide loans to startup,
newly established, and growing small business
concerns for working capital, real estate, or
the acquisition of materials, supplies, or
equipment.
(4) Loans to eligible intermediaries.--
(A) Application.--Each eligible intermediary
desiring a loan under this subsection shall
submit an application to the Administrator that
describes--
(i) the type of small business
concerns to be assisted;
(ii) the size and range of loans to
be made;
(iii) the interest rate and terms of
loans to be made;
(iv) the geographic area to be served
and the economic, poverty, and
unemployment characteristics of the
area;
(v) the status of small business
concerns in the area to be served and
an analysis of the availability of
credit; and
(vi) the qualifications of the
applicant to carry out this subsection.
(B) Loan limits.--No loan may be made to an
eligible intermediary under this subsection if
the total amount outstanding and committed to
the eligible intermediary by the Administrator
would, as a result of such loan, exceed
$1,000,000 during the participation of the
eligible intermediary in the Program.
(C) Loan duration.--Loans made by the
Administrator under this subsection shall be
for a term of 20 years.
(D) Applicable interest rates.--Loans made by
the Administrator to an eligible intermediary
under the Program shall bear an annual interest
rate equal to 1.00 percent.
(E) Fees; collateral.--The Administrator may
not charge any fees or require collateral with
respect to any loan made to an eligible
intermediary under this subsection.
(F) Delayed payments.--The Administrator
shall not require the repayment of principal or
interest on a loan made to an eligible
intermediary under the Program during the 2-
year period beginning on the date of the
initial disbursement of funds under that loan.
(G) Maximum participants and amounts.--During
each of fiscal years 2011, 2012, and 2013, the
Administrator may make loans under the
Program--
(i) to not more than 20 eligible
intermediaries; and
(ii) in a total amount of not more
than $20,000,000.
(5) Loans to small business concerns.--
(A) In general.--The Administrator, through
an eligible intermediary, shall make loans to
startup, newly established, and growing small
business concerns for working capital, real
estate, and the acquisition of materials,
supplies, furniture, fixtures, and equipment.
(B) Maximum loan.--An eligible intermediary
may not make a loan under this subsection of
more than $200,000 to any 1 small business
concern.
(C) Applicable interest rates.--A loan made
by an eligible intermediary to a small business
concern under this subsection, may have a fixed
or a variable interest rate, and shall bear an
interest rate specified by the eligible
intermediary in the application of the eligible
intermediary for a loan under this subsection.
(D) Review restrictions.--The Administrator
may not review individual loans made by an
eligible intermediary to a small business
concern before approval of the loan by the
eligible intermediary.
(6) Termination.--The authority of the Administrator
to make loans under the Program shall terminate 3 years
after the date of enactment of the Small Business Job
Creation and Access to Capital Act of 2010.
(m) Microloan Program.--
(1)(A) Purposes.--The purposes of the Microloan
Program are--
(i) to assist women, low-income, veteran
(within the meaning of such term under section
3(q)), and minority entrepreneurs and business
owners and other individuals possessing the
capability to operate successful business
concerns;
(ii) to assist small business concerns in
those areas suffering from a lack of credit due
to economic downturns;
(iii) to establish a microloan program to be
administered by the Small Business
Administration--
(I) to make loans to eligible
intermediaries to enable such
intermediaries to provide small-scale
loans, particularly loans in amounts
averaging not more than $10,000, to
startup, newly established, or growing
small business concerns for working
capital or the acquisition of
materials, supplies, or equipment;
(II) to make grants to eligible
intermediaries that, together with non-
Federal matching funds, will enable
such intermediaries to provide
intensive marketing, management, and
technical assistance to microloan
borrowers;
(III) to make grants to eligible
nonprofit entities that, together with
non-Federal matching funds, will enable
such entities to provide intensive
marketing, management, and technical
assistance to assist low-income
entrepreneurs and other low-income
individuals obtain private sector
financing for their businesses, with or
without loan guarantees; and
(IV) to report to the Committees on
Small Business of the Senate and the
House of Representatives on the
effectiveness of the microloan program
and the advisability and feasibility of
implementing such a program nationwide;
and
(iv) to establish a welfare-to-work microloan
initiative, which shall be administered by the
Administration, in order to test the
feasibility of supplementing the technical
assistance grants provided under clauses (ii)
and (iii) of subparagraph (B) to individuals
who are receiving assistance under the State
program funded under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), or
under any comparable State funded means tested
program of assistance for low-income
individuals, in order to adequately assist
those individuals in--
(I) establishing small businesses;
and
(II) eliminating their dependence on
that assistance.
(B) Establishment.--There is established a microloan
program, under which the Administration may--
(i) make direct loans to eligible
intermediaries, as provided under paragraph
(3), for the purpose of making short-term,
fixed interest rate microloans to startup,
newly established, and growing small business
concerns under paragraph (6);
(ii) in conjunction with such loans and
subject to the requirements of paragraph (4),
make grants to such intermediaries for the
purpose of providing intensive marketing,
management, and technical assistance to small
business concerns that are borrowers under this
subsection; and
(iii) subject to the requirements of
paragraph (5), make grants to nonprofit
entities for the purpose of providing
marketing, management, and technical assistance
to low-income individuals seeking to start or
enlarge their own businesses, if such
assistance includes working with the grant
recipient to secure loans in amounts not to
exceed $50,000 from private sector lending
institutions, with or without a loan guarantee
from the nonprofit entity.
(2) Eligibility for participation.--An intermediary
shall be eligible to receive loans and grants under
subparagraphs (B)(i) and (B)(ii) of paragraph (1) if
it--
(A) meets the definition in paragraph (10);
and
(B) has at least 1 year of experience making
microloans to startup, newly established, or
growing small business concerns and providing,
as an integral part of its microloan program,
intensive marketing, management, and technical
assistance to its borrowers.
(3) Loans to intermediaries.--
(A) Intermediary applications.--(i) In
general.--As part of its application for a
loan, each intermediary shall submit a
description to the Administration of--
(I) the type of businesses to be
assisted;
(II) the size and range of loans to
be made;
(III) the geographic area to be
served and its economic, proverty, and
unemployment characteristics;
(IV) the status of small business
concerns in the area to be served and
an analysis of their credit and
technical assistance needs;
(V) any marketing, management, and
technical assistance to be provided in
connection with a loan made under this
subsection;
(VI) the local economic credit
markets, including the costs associated
with obtaining credit locally;
(VII) the qualifications of the
applicant to carry out the purpose of
this subsection; and
(VIII) any plan to involve other
technical assistance providers (such as
counselors from the [Service Corps of
Retired Executives] SCORE program or
small business development centers) or
private sector lenders in assisting
selected business concerns.
(ii) Selection of intermediaries.--In
selecting intermediaries to participate in the
program established under this subsection, the
Administration shall give priority to those
applicants that provide loans in amounts
averaging not more than $10,000.
(B) Intermediary contribution.--As a
condition of any loan made to an intermediary
under subparagraph (B)(i) of paragraph (1), the
Administrator shall require the intermediary to
contribute not less than 15 percent of the loan
amount in cash from non-Federal sources.
(C) Loan limits.--Notwithstanding subsection
(a)(3), no loan shall be made under this
subsection if the total amount outstanding and
committed to one intermediary (excluding
outstanding grants) from the business loan and
investment fund established by this Act would,
as a result of such loan, exceed $750,000 in
the first year of such intermediary's
participation in the program, and $6,000,000 in
the remaining years of the intermediary's
participation in the program.
(D)(i) In general.--The Administrator shall,
by regulation, require each intermediary to
establish a loan loss reserve fund, and to
maintain such reserve fund until all
obligations owed to the Administration under
this subsection are repaid.
(ii) Level of loan loss reserve fund.--
(I) In general.--Subject to subclause
(III), the Administrator shall require
the loan loss reserve fund of an
intermediary to be maintained at a
level equal to 15 percent of the
outstanding balance of the notes
receivable owed to the intermediary.
(II) Review of loan loss reserve.--
After the initial 5 years of an
intermediary's participation in the
program authorized by this subsection,
the Administrator shall, at the request
of the intermediary, conduct a review
of the annual loss rate of the
intermediary. Any intermediary in
operation under this subsection prior
to October 1, 1994, that requests a
reduction in its loan loss reserve
shall be reviewed based on the most
recent 5-year period preceding the
request.
(III) Reduction of loan loss
reserve.--Subject to the requirements
of clause IV, the Administrator may
reduce the annual loan loss reserve
requirement of an intermediary to
reflect the actual average loan loss
rate for the intermediary during the
preceding 5-year period, except that in
no case shall the loan loss reserve be
reduced to less than 10 percent of the
outstanding balance of the notes
receivable owed to the intermediary.
(IV) Requirements.--The Administrator
may reduce the annual loan loss reserve
requirement of an intermediary only if
the intermediary demonstrates to the
satisfaction of the Administrator
that--
(aa) the average annual loss
rate for the intermediary
during the preceding 5-year
period is less than 15 percent;
and
(bb) that no other factors
exist that may impair the
ability of the intermediary to
repay all obligations owed to
the Administration under this
subsection.
(E) Unavailability of comparable credit.--An
intermediary may make a loan under this
subsection of more than $20,000 to a small
business concern only if such small business
concern demonstrates that it is unable to
obtain credit elsewhere at comparable interest
rates and that it has good prospects for
success. In no case shall an intermediary make
a loan under this subsection of more than
$50,000, or have outstanding or committed to
any 1 borrower more than $50,000.
(F) Loan duration; interest rates.--
(i) Loan duration.--Loans made by the
Administration under this subsection
shall be for a term of 10 years.
(ii) Applicable interest rates.--
Except as provided 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
and entrepreneurs 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 obligations of the
United States with a period of maturity
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 program, upon the actual
lending practices of the
intermediary during the term of
the intermediary's
participation in the program.
(vii) Covered intermediaries.--The
interest rates prescribed in this
subparagraph shall apply to all loans
made to intermediaries under this
subsection on or after October 28,
1991.
(G) Delayed payments.--The Administration
shall not require repayment of interest or
principal of a loan made to an intermediary
under this subsection during the first year of
the loan.
(H) Fees; collateral.--Except as provided in
subparagraphs (B) and (D), the Administration
shall not charge any fees or require collateral
other than an assignment of the notes
receivable of the microloans with respect to
any loan made to an intermediary under this
subsection.
(4) Marketing, management and technical assistance
grants to intermediaries.--Grants made in accordance
with subparagraph (B)(ii) of paragraph (1) shall be
subject to the following requirements:
(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 than 25 percent of the total outstanding
balance of loans made to it under this
subsection.
(B) Contribution.--As a condition of a grant
made under subparagraph (A), the Administrator
shall require the intermediary to contribute an
amount equal to 25 percent of the amount of the
grant, obtained solely from non-Federal
sources. In addition to cash or other direct
funding, the contribution may include indirect
costs or in-kind contributions paid for under
non-Federal programs.
(C) Additional technical assistance grants
for making certain loans.--
(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 $10,000 during
the period of the
intermediary's participation in
the program.
(ii) Purposes.--A grant awarded under
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 eligibility for a grant described
in subparagraph (A) or (C) shall be determined
separately for each loan-making site or office
of 1 intermediary.
(E) Assistance to certain small business
concerns.--
(i) In general.--Each intermediary
may expend an amount not to exceed 50
percent of the grant funds received
under paragraph (1)(B)(ii) to provide
information and technical assistance to
small business concerns that are
prospective borrowers under this
subsection.
(ii) Technical assistance.--An
intermediary may expend not more than
50 percent of the funds received under
paragraph (1)(B)(ii) to enter into
third party contracts for the provision
of technical assistance.
(F) Supplemental grant.--
(i) In general.--The Administration
may accept any funds transferred to the
Administration from other departments
or agencies of the Federal Government
to make grants in accordance with this
subparagraph and section 202(b) of the
Small Business Reauthorization Act of
1997 to participating intermediaries
and technical assistance providers
under paragraph (5), for use in
accordance with clause (iii) to provide
additional technical assistance and
related services to recipients of
assistance under a State program
described in paragraph (1)(A)(iv) at
the time they initially apply for
assistance under this subparagraph.
(ii) Eligible recipients; grant
amounts.--In making grants under this
subparagraph, the Administration may
select, from among participating
intermediaries and technical assistance
providers described in clause (i), not
more than 20 grantees in fiscal year
1998, not more than 25 grantees in
fiscal year 1999, and not more than 30
grantees in fiscal year 2000, each of
whom may receive a grant under this
subparagraph in an amount not to exceed
$200,000 per year.
(iii) Use of grant amounts.--Grants
under this subparagraph--
(I) are in addition to other
grants provided under this
subsection and shall not
require the contribution of
matching amounts as a condition
of eligibility; and
(II) may be used by a
grantee--
(aa) to pay or
reimburse a portion of
child care and
transportation costs of
recipients of
assistance described in
clause (i), to the
extent such costs are
not otherwise paid by
State block grants
under the Child Care
Development Block Grant
Act of 1990 (42 U.S.C.
9858 et seq.) or under
part A of title IV of
the Social Security Act
(42 U.S.C. 601 et
seq.); and
(bb) for marketing,
management, and
technical assistance to
recipients of
assistance described in
clause (i).
(iv) Memorandum of understanding.--
Prior to accepting any transfer of
funds under clause (i) from a
department or agency of the Federal
Government, the Administration shall
enter into a Memorandum of
Understanding with the department or
agency, which shall--
(I) specify the terms and
conditions of the grants under
this subparagraph; and
(II) provide for appropriate
monitoring of expenditures by
each grantee under this
subparagraph and each recipient
of assistance described in
clause (i) who receives
assistance from a grantee under
this subparagraph, in order to
ensure compliance with this
subparagraph by those grantees
and recipients of assistance.
(5) Private sector borrowing technical assistance
grants.--Grants made in accordance with subparagraph
(B)(iii) of paragraph (1) shall be subject to the
following requirements:
(A) Grant amounts.--Subject to the
requirements of subparagraph (B), the
Administration may make not more than 55 grants
annually, each in amounts not to exceed
$200,000 for the purposes specified in
subparagraph (B)(iii) of paragraph (1).
(B) Contribution.--As a condition of any
grant made under subparagraph (A), the
Administration shall require the grant
recipient to contribute an amount equal to 20
percent of the amount of the grant, obtained
solely from non-Federal sources. In addition to
cash or other direct funding, the contribution
may include indirect costs or in-kind
contributions paid for under non-Federal
programs.
(6) Loans to small business concerns from eligible
intermediaries.--
(A) In general.--An eligible intermediary
shall make short-term, fixed rate loans to
startup, newly established, and growing small
business concerns from the funds made available
to it under subparagraph (B)(i) of paragraph
(1) for working capital and the acquisition of
materials, supplies, furniture, fixtures, and
equipment.
(B) Portfolio requirement.--To the extent
practicable, each intermediary that operates a
microloan program under this subsection shall
maintain a microloan portfolio with an average
loan size of not more than $15,000.
(C) Interest limit.--Notwithstanding any
provision of the laws of any State or the
constitution of any State pertaining to the
rate or amount 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 the rate 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.
(D) Review restriction.--The Administration
shall not review individual microloans made by
intermediaries prior to approval.
(E) Establishment of child care or
transportation businesses.--In addition to
other eligible small businesses concerns,
borrowers under any program under this
subsection may include individuals who will use
the loan proceeds to establish for-profit or
nonprofit child care establishments or
businesses providing for-profit transportation
services.
(7) Program funding for microloans.--
(A) Number of participants.--Under the
program authorized by this subsection, the
Administration may fund, on a competitive
basis, not more than 300 intermediaries.
(B) Allocation.--
(i) Minimum allocation.--Subject to
the availability of appropriations, of
the total amount of new loan funds made
available for award under this
subsection in each fiscal year, the
Administration shall make available for
award in each State (including the
District of Columbia, the Commonwealth
of Puerto Rico, the United States
Virgin Islands, Guam, and American
Samoa) an amount equal to the sum of--
(I) the lesser of--
(aa) $800,000; or
(bb) \1/55\ of the
total amount of new
loan funds made
available for award
under this subsection
for that fiscal year;
and
(II) any additional amount,
as determined by the
Administration.
(ii) Redistribution.--If, at the
beginning of the third quarter of a
fiscal year, the Administration
determines that any portion of the
amount made available to carry out this
subsection is unlikely to be made
available under clause (i) during that
fiscal year, the Administration may
make that portion available for award
in any one or more States (including
the District of Columbia, the
Commonwealth of Puerto Rico, the United
States Virgin Islands, Guam, and
American Samoa) without regard to
clause (i).
(8) Equitable distribution of intermediaries.--In
approving microloan program applicants and providing
funding to intermediaries under this subsection, the
Administration shall select and provide funding to 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.
(9) Grants for management, marketing, technical
assistance, and related services.--
(A) In general.--The Administration may
procure technical assistance for intermediaries
participating in the Microloan Program to
ensure that such intermediaries have the
knowledge, skills, and understanding of
microlending practices necessary to operate
successful microloan programs.
(B) Assistance amount.--The Administration
shall transfer 7 percent of its annual
appropriation for loans and loan guarantees
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 and national and regional
nonprofit organizations that have demonstrated
experience in providing training support for
microenterprise development and financing. to
achieve the purpose set forth in subparagraph
(A).
(C) Welfare-to-work microloan initiative.--Of
amounts made available to carry out the
welfare-to-work microloan initiative under
paragraph (1)(A)(iv) in any fiscal year, the
Administration may use not more than 5 percent
to provide technical assistance, either
directly or through contractors, to welfare-to-
work microloan initiative grantees, to ensure
that, as grantees, they have the knowledge,
skills, and understanding of microlending and
welfare-to-work transition, and other related
issues, to operate a successful welfare-to-work
microloan initiative.
(10) Report to congress.--On November 1, 1995, the
Administration shall submit to the Committees on Small
Business of the Senate and the House of Representatives
a report, including the Administration's evaluation of
the effectiveness of the first 3\1/2\ years of the
microloan program and the following:
(A) the numbers and locations of the
intermediaries funded to conduct microloan
programs;
(B) the amounts of each loan and each grant
to intermediaries;
(C) a description of the matching
contributions of each intermediary;
(D) the numbers and amounts of microloans
made by the intermediaries to small business
concern borrowers;
(E) the repayment history of each
intermediary;
(F) a description of the loan portfolio of
each intermediary including the extent to which
it provides microloans to small business
concerns in rural areas; and
(G) any recommendations for legislative
changes that would improve program operations.
(11) Definitions.--For purposes of this subsection--
(A) the term ``intermediary'' means--
(i) a private, nonprofit entity;
(ii) a private, nonprofit community
development corporation;
(iii) a consortium of private,
nonprofit organizations or nonprofit
community development corporations;
(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 adequately served by an
existing, eligible nonprofit
organization that has submitted
an application; or
(v) an agency of or nonprofit entity
established by a Native American Tribal
Government,
that seeks to borrow or has borrowed funds from
the Administration to make microloans to small
business concerns under this subsection;
(B) the term ``microloan'' means a short-
term, fixed rate loan of not more than $50,000,
made by an intermediary to a startup, newly
established, or growing small business concern;
(C) the term ``rural area'' means any
political subdivision or unincorporated area--
(i) in a nonmetropolitan county (as
defined by the Secretary of
Agriculture) or its equivalent thereof;
or
(ii) in a metropolitan county or its
equivalent that has a resident
population of less than 20,000 if the
Small Business Administration has
determined such political subdivision
or area to be rural; and
(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.
(12) Deferred participation loan pilot.--In lieu of
making direct loans to intermediaries as authorized in
paragraph (1)(B), during fiscal years 1998 through
2000, the Administration 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
paragraph, 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 payments 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.
(13) Evaluation of welfare-to-work microloan
initiative.--On January 31, 1999, and annually
thereafter, the Administration shall submit to the
Committees on Small Business of the House of
Representatives and the Senate a report on any monies
distributed pursuant to paragraph (4)(F).
(n) Repayment Deferred for Active Duty Reservists.--
(1) Definitions.--In this subsection:
(A) Eligible reservist.--The term ``eligible
reservist'' means a member of a reserve
component of the Armed Forces ordered to active
duty during a period of military conflict.
(B) Essential employee.--The term ``essential
employee'' means an individual who is employed
by a small business concern and whose
managerial or technical expertise is critical
to the successful day-to-day operations of that
small business concern.
(C) Period of military conflict.--The term
``period of military conflict'' means--
(i) a period of war declared by the
Congress;
(ii) a period of national emergency
declared by the Congress or by the
President; or
(iii) a period of a contingency
operation, as defined in section 101(a)
of title 10, United States Code.
(D) Qualified borrower.--The term ``qualified
borrower'' means--
(i) an individual who is an eligible
reservist and who received a direct
loan under subsection (a) or (b) before
being ordered to active duty; or
(ii) a small business concern that
received a direct loan under subsection
(a) or (b) before an eligible
reservist, who is an essential
employee, was ordered to active duty.
(2) Deferral of direct loans.--
(A) In general.--The Administration shall,
upon written request, defer repayment of
principal and interest due on a direct loan
made under subsection (a) or (b), if such loan
was incurred by a qualified borrower.
(B) Period of deferral.--The period of
deferral for repayment under this paragraph
shall begin on the date on which the eligible
reservist is ordered to active duty and shall
terminate on the date that is 180 days after
the date such eligible reservist is discharged
or released from active duty.
(C) Interest rate reduction during
deferral.--Notwithstanding any other provision
of law, during the period of deferral described
in subparagraph (B), the Administration may, in
its discretion, reduce the interest rate on any
loan qualifying for a deferral under this
paragraph.
(3) Deferral of loan guarantees and other
financings.--The Administration shall--
(A) encourage intermediaries participating in
the program under subsection (m) to defer
repayment of a loan made with proceeds made
available under that subsection, if such loan
was incurred by a small business concern that
is eligible to apply for assistance under
subsection (b)(3); and
(B) not later than 30 days after the date of
the enactment of this subsection, establish
guidelines to--
(i) encourage lenders and other
intermediaries to defer repayment of,
or provide other relief relating to,
loan guarantees under subsection (a)
and financings under section 504 of the
Small Business Investment Act of 1958
that were incurred by small business
concerns that are eligible to apply for
assistance under subsection (b)(3), and
loan guarantees provided under
subsection (m) if the intermediary
provides relief to a small business
concern under this paragraph; and
(ii) implement a program to provide
for the deferral of repayment or other
relief to any intermediary providing
relief to a small business borrower
under this paragraph.
Sec. 8. (a)(1) It shall be the duty of the Administration and
it is hereby empowered, whenever it determines such action is
necessary or appropriate--
(A) to enter into contracts with the United States
Government and any department, agency, or officer
thereof having procurement powers obligating the
Administration to furnish articles, equipment,
supplies, services, or materials to the Government or
to perform construction work for the Government. In any
case in which the Administration certifies to any
officer of the Government having procurement powers
that the Administration is competent and responsible to
perform any specific Government procurement contract to
be let by any such officer, such officer shall be
authorized in his discretion to let such procurement
contract to the Administration upon such terms and
conditions as may be agreed upon between the
Administration and the procurement officer. Whenever
the Administration and such procurement officer fail to
agree, the matter shall be submitted for determination
to the Secretary or the head of the appropriate
department or agency by the Administrator. Not later
than 5 days from the date the Administration is
notified of a procurement officer's adverse decision,
the Administration may notify the contracting officer
of the intent to appeal such adverse decision, and
within 15 days of such date the Administrator shall
file a written request for a reconsideration of the
adverse decision with the Secretary of the department
or agency head. For the purposes of this subparagraph,
a procurement officer's adverse decision includes a
decision not to make available for award pursuant to
this subsection a particular procurement requirement or
the failure to agree on the terms and conditions of a
contract to be awarded noncompetitively under the
authority of this subsection. Upon receipt of the
notice of intent to appeal, the Secretary of the
department or the agency head shall suspend further
action regarding the procurement until a written
decision on the Administrator's request for
reconsideration has been issued by such Secretary or
agency head, unless such officer makes a written
determination that urgent and compelling circumstances
which significantly affect interests of the United
States will not permit waiting for a reconsideration of
the adverse decision. If the Administrator's request
for reconsideration is denied, the Secretary of the
department or agency head shall specify the reasons why
the selected firm was determined to be incapable to
perform the procurement requirement, and the findings
supporting such determination, which shall be made a
part of the contract file for the requirement. A
contract may not be awarded under this subsection if
the award of the contract would result in a cost to the
awarding agency which exceeds a fair market price;
(B) to arrange for the performance of such
procurement contracts by negotiating or otherwise
letting subcontracts to socially and economically
disadvantaged small business concerns for construction
work, services, or the manufacture, supply, assembly of
such articles, equipment, supplies, materials, or parts
thereof, or servicing or processing in connection
therewith, or such management services as may be
necessary to enable the Administration to perform such
contracts;
(C) to make an award to a small business
concern owned and controlled by socially and
economically disadvantaged individuals which
has completed its period of Program
Participation as prescribed by section
7(j)(15), if--
(i) the contract will be awarded as a
result of an offer (including price)
submitted in response to a published
solicitation relating to a competition
conducted pursuant to subparagraph (D);
and
(ii) the prospective contract awardee
was a Program Participant eligible for
award of the contract on the date
specified for receipt of offers
contained in the contract solicitation;
and
(D)(i) A contract opportunity offered for award
pursuant to this subsection shall be awarded on the
basis of competition restricted to eligible Program
Participants if--
(I) there is a reasonable expectation that at
least two eligible Program Participants will
submit offers and that award can be made at a
fair market price, and
(II) the anticipated award price of the
contract (including options) will exceed
$5,000,000 in the case of a contract
opportunity assigned a standard industrial
classification code for manufacturing and
$3,000,000 (including options) in the case of
all other contract opportunities.
(ii) The Associate Administrator for Minority Small
Business and Capital Ownership Development, on a
nondelegable basis, is authorized to approve a request
from an agency to award a contract opportunity under
this subsection on the basis of a competition
restricted to eligible Program Participants even if the
anticipated award price is not expected to exceed the
dollar amounts specified in clause (i)(II). Such
approvals shall be granted only on a limited basis.
(2) Notwithstanding subsections (a) and (c) of the first
section of the Act entitled ``An Act requiring contracts for
the construction, alteration, and repair of any public building
or public work of the United States to be accompanied by a
performance bond protecting the United States and by additional
bond for the protection of persons furnishing material and
labor for the construction, alteration, or repair of said
public buildings or public work,'' approved August 24, 1935 (49
Stat. 793), no small business concern shall be required to
provide any amount of any bond as a condition or receiving any
subcontract under this subsection if the Administrator
determines that such amount is inappropriate for such concern
in performing such contract: Provided, That the Administrator
shall exercise the authority granted by the paragraph only if--
(A) the Administration takes such measures as it
deems appropriate for the protection of persons
furnishing materials and labor to a small business
receiving any benefit pursuant to this paragraph;
(B) the Administration assists, insofar as
practicable, a small business receiving the benefits of
this paragraph to develop, within a reasonable period
of time, such financial and other capability as may be
needed to obtain such bonds as the Administration may
subsequently require for the successful completion of
any program conducted under the authority of this
subsection;
(C) the Administration finds that such small business
is unable to obtain the requisite bond or bonds from a
surety and that no surety is willing to issue such bond
or bonds subject to the guarantee provisions of Title
IV of the Small Business Investment Act of 1958; and
(D) that small business is determined to be a start-
up concern and such concern has not been participating
in any program conducted under the authority of this
subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may
not be exercised after September 30, 1988.
(3)(A) Any Program Participant selected by the Administration
to perform a contract to be let noncompetitively pursuant to
this subsection shall, when practicable, participate in any
negotiation of the terms and conditions of such contract.
(B)(i) For purposes of paragraph (1) a ``fair market price''
shall be determined by the agency offering the procurement
requirement to the Administration, in accordance with clauses
(ii) and (iii).
(ii) The estimate of a current fair market price for a new
procurement requirement, or a requirement that does not have a
satisfactory procurement history, shall be derived from a price
or cost analysis. Such analysis may take into account
prevailing market conditions, commercial prices for similar
products or services, or data obtained from any other agency.
Such analysis shall consider such cost or pricing data as may
be timely submitted by the Administration.
(iii) The estimate of a current fair market price for a
procurement requirement that has a satisfactory procurement
history shall be based on recent award prices adjusted to
insure comparability. Such adjustments shall take into account
differences in quantities, performance times, plans,
specifications, transportation costs, packaging and packing
costs, labor and materials costs, overhead costs, and any other
additional costs which may be deemed appropriate.
(C) An agency offering a procurement requirement for
potential award pursuant to this subsection shall, upon the
request of the Administration, promptly submit to the
Administration a written statement detailing the method used by
the agency to estimate the current fair market price for such
contract, identifying the information, studies, analyses, and
other data used by such agency. The agency's estimate of the
current fair market price (and any supporting data furnished to
the Administration) shall not be disclosed to any potential
offeror (other than the Administration).
(D) A small business concern selected by the Administration
to perform or negotiate a contract to be let pursuant to this
subsection may request the Administration to protest the
agency's estimate of the fair market price for such contract
pursuant to paragraph (1)(A).
(4)(A) For purposes of this section, the term ``socially and
economically disadvantaged small business concern'' means any
small business concern which meets the requirements of
subparagraph (B) and--
(i) which is at least 51 per centum unconditionally
owned by--
(I) one or more socially and economically
disadvantaged individuals,
(II) an economically disadvantaged Indian
tribe (or a wholly owned business entity of
such tribe), or
(III) an economically disadvantaged Native
Hawaiian organization, or
(ii) in the case of any publicly owned business, at
least 51 per centum of the stock of which is
unconditionally owned by--
(I) one or more socially and economically
disadvantaged individuals,
(II) an economically disadvantaged Indian
tribe (or a wholly owned business entity of
such tribe), or
(III) an economically disadvantaged Native
Hawaiian organization.
(B) A small business concern meets the requirements of this
subparagraph if the management and daily business operations of
such small business concern are controlled by one or more--
(i) socially and economically disadvantaged
individuals described in subparagraph (A)(i)(I) or
subparagraph (A)(ii)(I),
(ii) members of an economically disadvantaged Indian
tribe described in subparagraph (A)(i)(II) or
subparagraph (A)(ii)(II), or
(iii) Native Hawaiian organizations described in
subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
(C) Each Program Participant shall certify, on an annual
basis, that it meets the requirements of this paragraph
regarding ownership and control.
(5) Socially disadvantaged individuals are those who have
been subjected to racial or ethnic prejudice or cultural bias
because of their identity as a member of a group without regard
to their individual qualities.
(6)(A) Economically disadvantaged individuals are those
socially disadvantaged individuals whose ability to compete in
the free enterprise system has been impaired due to diminished
capital and credit opportunities as compared to others in the
same business area who are not socially disadvantaged. In
determining the degree of diminished credit and capital
opportunities the Administration shall consider, but not be
limited to, the assets and net worth of such socially
disadvantaged individual. In determining the economic
disadvantage of an Indian tribe, the Administration shall
consider, where available, information such as the following:
the per capita income of members of the tribe excluding
judgment awards, the percentage of the local Indian population
below the poverty level, and the tribe's access to capital
markets.
(B) Each Program Participant shall annually submit to the
Administration--
(i) a personal financial statement for each
disadvantaged owner;
(ii) a record of all payments made by the Program
Participant to each of its disadvantaged owners or to
any person or entity affiliated with such owners; and
(iii) such other information as the Administration
may deem necessary to make the determinations required
by this paragraph.
(C)(i) Whenever, on the basis of information provided by a
Program Participant pursuant to subparagraph (B) or otherwise,
the Administration has reason to believe that the standards to
establish economic disadvantage pursuant to subparagraph (A)
have not been met, the Administration shall conduct a review to
determine whether such Program Participant and its
disadvantaged owners continue to be impaired in their ability
to compete in the free enterprise system due to diminished
capital and credit opportunities when compared to other
concerns in the same business area, which are not socially
disadvantaged.
(ii) If the Administration determines, pursuant to such
review, that a Program Participant and its disadvantaged owners
are no longer economically disadvantaged for the purpose of
receiving assistance under this subsection, the Program
Participant shall be graduated pursuant to section 7(j)(10)(G)
subject to the right to a hearing as provided for under
paragraph (9).
(D)(i) Whenever, on the basis of information provided by a
Program Participant pursuant to subparagraph (B) or otherwise,
the Administration has reason to believe that the amount of
funds or other assets withdrawn from a Program Participant for
the personal benefit of its disadvantaged owners or any person
or entity affiliated with such owners may have been unduly
excessive, the Administration shall conduct a review to
determine whether such withdrawal of funds or other assets was
detrimental to the achievement of the targets, objectives, and
goals contained in such Program Participant's business plan.
(ii) If the Administration determines, pursuant to such
review, that funds or other assets have been withdrawn to the
detriment of the Program Participant's business, the
Administration shall--
(I) initiate a proceeding to terminate the Program
Participant pursuant to section 7(j)(10)(F), subject to
the right to a hearing under paragraph (9); or
(II) require an appropriate reinvestment of funds or
other assets and such other steps as the Administration
may deem necessary to ensure the protection of the
concern.
(E) Whenever the Administration computes personal net worth
for any purpose under this paragraph, it shall exclude from
such computation--
(i) the value of investments that disadvantaged
owners have in their concerns, except that such value
shall be taken into account under this paragraph when
comparing such concerns to other concerns in the same
business area that are owned by other than socially
disadvantaged persons;
(ii) the equity that disadvantaged owners have in
their primary personal residences, except that any
portion of such equity that is attributable to unduly
excessive withdrawals from a Program Participant or a
concern applying for program participation shall be
taken into account.
(7)(A) No small business concern shall be deemed eligible for
any assistance pursuant to this subsection unless the
Administration determines that with contract, financial,
technical, and management support the small business concern
will be able to perform contracts which may be awarded to such
concern under paragraph (1)(C) and has reasonable prospects for
success in competing in the private sector.
(B) Limitations established by the Administration in its
regulations and procedures restricting the award of contracts
pursuant to this subsection to a limited number of standard
industrial classification codes in an approved business plan
shall not be applied in a manner that inhibits the logical
business progression by a participating small business concern
into areas of industrial endeavor where such concern has the
potential for success.
(8) All determinations made pursuant to paragraph (5) with
respect to whether a group has been subjected to prejudice or
bias shall be made by the Administrator after consultation with
the Associate Administrator for Minority Small Business and
Capital Ownership Development. All other determinations made
pursuant to paragraphs (4), (5), (6), and (7) shall be made by
the Associate Administrator for Minority Small Business and
Capital Ownership Development under the supervision of, and
responsible to, the Administrator.
(9)(A) Subject to the provisions of subparagraph (E), the
Administration, prior to taking any action described in
subparagraph (B), shall provide the small business concern that
is the subject of such action, an opportunity for a hearing on
the record, in accordance with chapter 5 of title 5, United
States Code.
(B) The actions referred to in subparagraph (A) are--
(i) denial of program admission based upon a negative
determination pursuant to paragraph (4), (5), or (6);
(ii) a termination pursuant to section 7(j)(10)(F);
(iii) a graduation pursuant to section 7(j)(10)(G);
and
(iv) the denial of a request to issue a waiver
pursuant to paragraph (21)(B).
(C) The Administration's proposed action, in any proceeding
conducted under the authority of this paragraph, shall be
sustained unless it is found to be arbitrary, capricious, or
contrary to law.
(D) A decision rendered pursuant to this paragraph shall be
the final decision of the Administration and shall be binding
upon the Administration and those within its employ.
(E) The adjudicator selected to preside over a proceeding
conducted under the authority of this paragraph shall decline
to accept jurisdiction over any matter that--
(i) does not, on its face, allege facts that, if
proven to be true, would warrant reversal or
modification of the Administration's position;
(ii) is untimely filed;
(iii) is not filed in accordance with the rules of
procedure governing such proceedings; or
(iv) has been decided by or is the subject of an
adjudication before a court of competent jurisdiction
over such matters.
(F) Proceedings conducted pursuant to the authority of this
paragraph shall be completed and a decision rendered, insofar
as practicable, within ninety days after a petition for a
hearing is filed with the adjudicating office.
(10) The Administration shall develop and implement an
outreach program to inform and recruit small business concerns
to apply for eligibility for assistance under this subsection.
Such program shall make a sustained and substantial effort to
solicit applications for certification from small business
concerns located in areas of concentrated unemployment or
underemployment or within labor surplus areas and within States
having relatively few Program Participants and from small
disadvantaged business concerns in industry categories that
have not substantially participated in the award of contracts
let under the authority of this subsection.
(11) To the maximum extent practicable, construction
subcontracts awarded by the Administration pursuant to this
subsection shall be awarded within the county or State where
the work is to be performed.
(12)(A) The Administration shall require each concern
eligible to receive subcontracts pursuant to this subsection to
annually prepare and submit to the Administration a capability
statement. Such statement shall briefly describe such concern's
various contract performance capabilities and shall contain the
name and telephone number of the Business Opportunity
Specialist assigned such concern. The Administration shall
separate such statements by those primarily dependent upon
local contract support and those primarily requiring a national
marketing effort. Statements primarily dependent upon local
contract support shall be disseminated to appropriate buying
activities in the marketing area of the concern. The remaining
statements shall be disseminated to the Directors of Small and
Disadvantaged Business Utilization for the appropriate agencies
who shall further distribute such statements to buying
activities with such agencies that may purchase the types of
items or services described on the capability statements.
(B) Contracting activities receiving capability statements
shall, within 60 days after receipt, contact the relevant
Business Opportunity Specialist to indicate the number, type,
and approximate dollar value of contract opportunities that
such activities may be awarding over the succeeding 12-month
period and which may be appropriate to consider for award to
those concerns for which it has received capability statements.
(C) Each executive agency reporting to the Federal
Procurement Data System contract actions with an aggregate
value in excess of $50,000,000 in fiscal year 1988, or in any
succeeding fiscal year, shall prepare a forecast of expected
contract opportunities or classes of contract opportunities for
the next and succeeding fiscal years that small business
concerns, including those owned and controlled by socially and
economically disadvantaged individuals, are capable of
performing. Such forecast shall be periodically revised during
such year. To the extent such information is available, the
agency forecasts shall specify:
(i) The approximate number of individual contract
opportunities (and the number of opportunities within a
class).
(ii) The approximate dollar value, or range of dollar
values, for each contract opportunity or class of
contract opportunities.
(iii) The anticipated time (by fiscal year quarter)
for the issuance of a procurement request.
(iv) The activity responsible for the award and
administration of the contract.
(D) The head of each executive agency subject to the
provisions of subparagraph (C) shall within 10 days of
completion furnish such forecasts to--
(i) the Director of the Office of Small and
Disadvantaged Business Utilization established pursuant
to section 15(k) for such agency; and
(ii) the Administrator.
(E) The information reported pursuant to subparagraph (D) may
be limited to classes of items and services for which there are
substantial annual purchases.
(F) Such forecasts shall be available to small business
concerns.
(13) For purposes of this subsection, the term ``Indian
tribe'' means any Indian tribe, band, nation, or other
organized group or community of Indians, including any Alaska
Native village or regional or village corporation (within the
meaning of the Alaska Native Claims Settlement Act) which--
(A) is recognized as eligible for the special
programs and services provided by the United States to
Indians because of their status as Indians, or
(B) is recognized as such by the State in which such
tribe, band, nation, group, or community resides.
(14) Limitations on subcontracting.--A concern may
not be awarded a contract under this subsection as a
small business concern unless the concern agrees to
satisfy the requirements of section 46.
(15) For purposes of this subsection, the term ``Native
Hawaiian Organization'' means any community service
organization serving Native Hawaiians in the State of Hawaii
which--
(A) is a nonprofit corporation that has filed
articles of incorporation with the director (or the
designee thereof) of the Hawaii Department of Commerce
and Consumer Affairs, or any successor agency,
(B) is controlled by Native Hawaiians, and
(C) whose business activities will principally
benefit such Native Hawaiians.
(16)(A) The Administration shall award sole source contracts
under this section to any small business concern recommended by
the procuring agency offering the contract opportunity if--
(i) the Program Participant is determined to be a
responsible contractor with respect to performance of
such contract opportunity;
(ii) the award of such contract would be consistent
with the Program Participant's business plan; and
(iii) the award of the contract would not result in
the Program Participant exceeding the requirements
established by section 7(j)(10)(I).
(B) To the maximum extent practicable, the Administration
shall promote the equitable geographic distribution of sole
source contracts awarded pursuant to this subsection.
(17)(A) An otherwise responsible business concern that is in
compliance with the requirements of subparagraph (B) shall not
be denied the opportunity to submit and have considered its
offer for any procurement contract, which contract has as its
principal purpose the supply of a product to be let pursuant to
this subsection, subsection (m), section 15(a), section 31, or
section 36, solely because such concern is other than the
actual manufacturer or processor of the product to be supplied
under the contract.
(B) To be in compliance with the requirements referred to in
subparagraph (A), such a business concern shall--
(i) be primarily engaged in the wholesale or retail
trade;
(ii) be a small business concern under the numerical
size standard for the Standard Industrial
Classification Code assigned to the contract
solicitation on which the offer is being made;
(iii) be a regular dealer, as defined pursuant to
section 35(a) of title 41, United States Code
(popularly referred to as the Walsh-Healey Public
Contracts Act), in the product to be offered the
Government or be specifically exempted from such
section by section 7(j)(13)(C); and
(iv) represent that it will supply the product of a
domestic small business manufacturer or processor,
unless a waiver of such requirement is granted--
(I) by the Administrator, after reviewing a
determination by the contracting officer that
no small business manufacturer or processor can
reasonably be expected to offer a product
meeting the specifications (including period
for performance) required of an offeror by the
solicitation; or
(II) by the Administrator for a product (or
class of products), after determining that no
small business manufacturer or processor is
available to participate in the Federal
procurement market.
(C) Limitation.--This paragraph shall not apply to a
contract that has as its principal purpose the
acquisition of services or construction.
(18)(A) No person within the employ of the Administration
shall, during the term of such employment and for a period of
two years after such employment has been terminated, engage in
any activity or transaction specified in subparagraph (B) with
respect to any Program Participant during such person's term of
employment, if such person participated personally (either
directly or indirectly) in decision-making responsibilities
relating to such Program Participant or with respect to the
administration of any assistance provided to Program
Participants generally under this subsection, section 7(j)(10),
or section 7(a)(20).
(B) The activities and transactions prohibited by
subparagraph (A) include--
(i) the buying, selling, or receiving (except by
inheritance) of any legal or beneficial ownership of
stock or any other ownership interest or the right to
acquire any such interest;
(ii) the entering into or execution of any written or
oral agreement (whether or not legally enforceable) to
purchase or otherwise obtain any right or interest
described in clause (i); or
(iii) the receipt of any other benefit or right that
may be an incident of ownership.
(C)(i) The employees designated in clause (ii) shall annually
submit a written certification to the Administration regarding
compliance with the requirements of this paragraph.
(ii) The employees referred to in clause (i) are--
(I) regional administrators;
(II) district directors;
(III) the Associate Administrator for Minority Small
Business and Capital Ownership Development;
(IV) employees whose principal duties relate to the
award of contracts or the provision of other assistance
pursuant to this subsection or section 7(j)(10); and
(V) such other employees as the Administrator may
deem appropriate.
(iii) Any present or former employee of the Administration
who violates this paragraph shall be subject to a civil
penalty, assessed by the Attorney General, that shall not
exceed 300 per centum of the maximum amount of gain such
employee realized or could have realized as a result of
engaging in those activities and transactions prescribed by
subparagraph (B).
(iv) In addition to any other remedy or sanction provided for
under law or regulation, any person who falsely certifies
pursuant to clause (i) shall be subject to a civil penalty
under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C.
3801-3812).
(19)(A) Any employee of the Administration who has authority
to take, direct others to take, recommend, or approve any
action with respect to any program or activity conducted
pursuant to this subsection or section 7(j), shall not, with
respect to any such action, exercise or threaten to exercise
such authority on the basis of the political activity or
affiliation of any party. Employees of the Administration shall
expeditiously report to the Inspector General of the
Administration any such action for which such employee's
participation has been solicitated or directed.
(B) Any employee who willfully and knowingly violates
subparagraph (A) shall be subject to disciplinary action, which
may consist of separation from service, reduction in grade,
suspension, or reprimand.
(C) Subparagraph (A) shall not apply to any action taken as a
penalty or other enforcement of a violation of any law, rule,
or regulation prohibiting or restricting political activity.
(D) The prohibitions of subparagraph (A), and remedial
measures provided for under subparagraphs (B) and (C) with
regard to such prohibitions, shall be in addition to, and not
in lieu of, any other prohibitions, measures or liabilities
that may arise under any other provision of law.
(20)(A) Small business concerns participating in the Program
under section 7(j)(10) and eligible to receive contracts
pursuant to this section shall semiannually report to their
assigned Business Opportunity Specialist the following:
(i) A listing of any agents, representatives,
attorneys, accountants, consultants, and other parties
(other than employees) receiving compensation to assist
in obtaining a Federal contract for such Program
Participant.
(ii) The amount of compensation received by any
person listed under clause (i) during the relevant
reporting period and a description of the activities
performed in return for such compensation.
(B) The Business Opportunity Specialist shall promptly review
and forward such report to the Associate Administrator for
Minority Small Business and Capital Ownership Development. Any
report that raises a suspicion of improper activity shall be
reported immediately to the Inspector General of the
Administration.
(C) The failure to submit a report pursuant to the
requirements of this subsection and applicable regulations
shall be considered ``good cause'' for the initiation of a
termination proceeding pursuant to section 7(j)(10)(F).
(21)(A) Subject to the provisions of subparagraph (B), a
contract (including options) awarded pursuant to this
subsection shall be performed by the concern that initially
received such contract. Notwithstanding the provisions of the
preceding sentence, if the owner or owners upon whom
eligibility was based relinquish ownership or control of such
concern, or enter into any agreement to relinquish such
ownership or control, such contract or option shall be
terminated for the convenience of the Government, except that
no repurchase costs or other damages may be assessed against
such concerns due solely to the provisions of this
subparagraph.
(B) The Administrator may, on a nondelegable basis, waive the
requirements of subparagraph (A) only if one of the following
conditions exist:
(i) When it is necessary for the owners of the
concern to surrender partial control of such concern on
a temporary basis in order to obtain equity financing.
(ii) The head of the contracting agency for which the
contract is being performed certifies that termination
of the contract would severely impair attainment of the
agency's program objectives or missions;
(iii) Ownership and control of the concern that is
performing the contract will pass to another small
business concern that is a program participant, but
only if the acquiring firm would otherwise be eligible
to receive the award directly pursuant to subsection
(a);
(iv) The individuals upon whom eligibility was based
are no longer able to exercise control of the concern
due to incapacity or death; or
(v) When, in order to raise equity capital, it is
necessary for the disadvantaged owners of the concern
to relinquish ownership of a majority of the voting
stock of such concern, but only if--
(I) such concern has exited the Capital
Ownership Development Program;
(II) the disadvantaged owners will maintain
ownership of the largest single outstanding
block of voting stock (including stock held by
affiliated parties); and
(III) the disadvantaged owners will maintain
control of daily business operations.
(C) The Administrator may waive the requirements of
subparagraph (A) if--
(i) in the case of subparagraph (B) (i), (ii)
and (iv), he is requested to do so prior to the
actual relinquishment of ownership or control;
and
(ii) in the case of subparagraph (B)(iii), he
is requested to do so as soon as possible after
the incapacity or death occurs.
(D) Concerns performing contracts awarded pursuant to this
subsection shall be required to notify the Administration
immediately upon entering an agreement (either oral or in
writing) to transfer all or part of its stock or other
ownership interest to any other party.
(E) Notwithstanding any other provision of law, for the
purposes of determining ownership and control of a concern
under this section, any potential ownership interests held by
investment companies licensed under the Small Business
Investment Act of 1958 shall be treated in the same manner as
interests held by the individuals upon whom eligibility is
based.
(b) It shall also be the duty of the Administration and it is
hereby empowered, whenever it determines such action is
necessary--
(1)(A) to provide--
(i) technical, managerial, and informational
aids to small business concerns--
(I) by advising and counseling on
matters in connection with Government
procurement and policies, principles,
and practices of good management;
(II) by cooperating and advising
with--
(aa) voluntary business,
professional, educational, and
other nonprofit organizations,
associations, and institutions
(except that the Administration
shall take such actions as it
determines necessary to ensure
that such cooperation does not
constitute or imply an
endorsement by the
Administration of the
organization or its products or
services, and shall ensure that
it receives appropriate
recognition in all printed
materials); and
(bb) other Federal and State
agencies;
(III) by maintaining a clearinghouse
for information on managing, financing,
and operating small business
enterprises; and
(IV) by disseminating such
information, including through
recognition events, and by other
activities that the Administration
determines to be appropriate; and
(ii) through cooperation with a profit-making
concern (referred to in this paragraph as a
``cosponsor''), training, information, and
education to small business concerns, except
that the Administration shall--
(I) take such actions as it
determines to be appropriate to ensure
that--
(aa) the Administration
receives appropriate
recognition and publicity;
(bb) the cooperation does not
constitute or imply an
endorsement by the
Administration of any product
or service of the cosponsor;
(cc) unnecessary promotion of
the products or services of the
cosponsor is avoided; and
(dd) utilization of any one
cosponsor in a marketing area
is minimized; and
(II) develop an agreement, executed
on behalf of the Administration by an
employee of the Administration in
Washington, the District of Columbia,
that provides, at a minimum, that--
(aa) any printed material to
announce the cosponsorship or
to be distributed at the
cosponsored activity, shall be
approved in advance by the
Administration;
(bb) the terms and conditions
of the cooperation shall be
specified;
(cc) only minimal charges may
be imposed on any small
business concern to cover the
direct costs of providing the
assistance;
(dd) the Administration may
provide to the cosponsorship
mailing labels, but not lists
of names and addresses of small
business concerns compiled by
the Administration;
(ee) all printed materials
containing the names of both
the Administration and the
cosponsor shall include a
prominent disclaimer that the
cooperation does not constitute
or imply an endorsement by the
Administration of any product
or service of the cosponsor;
and
(ff) the Administration shall
ensure that it receives
appropriate recognition in all
cosponsorship printed
materials.
(B) To establish, conduct, and publicize, and to
recruit, select, and train volunteers for (and to enter
into contracts, grants, or cooperative agreements
therefor), volunteer programs, including [a Service
Corps of Retired Executives (SCORE)] the SCORE program
described in subsection (c) and an Active Corps of
Executive (ACE) for the purposes of section 8(b)(1)(A)
of this Act. To facilitate the implementation of such
volunteer programs the Administration shall maintain at
its headquarters and pay the salaries, benefits, and
expenses of a volunteer and professional staff to
manage and oversee the program. Any such payments made
pursuant to this subparagraph shall be effective only
to such extent or in such amounts as are provided in
advance in appropriation Acts. Notwithstanding any
other provision of law, [SCORE may] the SCORE
Association (as defined in subsection (c)) may solicit
cash and in-kind contributions from the private sector
to be used to carry out its functions under this Act,
and may use payments made by the Administration
pursuant to this subparagraph for such solicitation and
the management of the contributions received.
(C) To allow any individual or group of persons
participating with it in furtherance of the purposes of
subparagraphs (A) and (B) to use the Administration's
office facilities and related material and services as
the Administration deems appropriate, including
clerical and stenographic service:
(i) such volunteers, while carrying out
activities under section 8(b)(1) of this Act
shall be deemed Federal employees for the
purposes of the Federal tort claims provisions
in title 28, United States Code; and for the
purposes of subchapter I of chapter 81 of title
5, United States Code (relative to compensation
to Federal employees for work injuries) shall
be deemed civil employees of the United States
within the meaning of the term ``employee'' as
defined in section 8101 of title 5, United
States Code, and the provisions of that
subchapter shall apply except that in computing
compensation benefits for disability or death,
the monthly pay of a volunteer shall be deemed
that received under the entrance salary for a
grade GS-11 employee:
(ii) the Administrator is authorized to
reimburse such volunteers for all necessary
out-of-pocket expenses incident to their
provision of services under this Act, or in
connection with attendance at meetings
sponsored by the Administration, or for the
cost of malpractice insurance, as the
Administrator shall determine, in accordance
with regulations which he or she shall
prescribe, and, while they are carrying out
such activities away from their homes or
regular places of business, for travel expenses
(including per diem in lieu of subsistence) as
authorized by section 5703 of title 5, United
States Code, for individuals serving without
pay; and
(iii) such volunteers shall in no way provide
services to a client of such Administration
with a delinquent loan outstanding, except upon
a specific request signed by such client for
assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no
payment for supportive services or reimbursement of
out-of-pocket expenses made to persons serving pursuant
to section 8(b)(1) of this Act shall be subject to any
tax or charge or be treated as wages or compensation
for the purposes of unemployment, disability,
retirement, public assistance, or similar benefit
payments, or minimum wage laws.
(E) In carrying out its functions under subparagraph
(A), to make grants (including contracts and
cooperative agreements) to any public or private
institution of higher education for the establishment
and operation of a small business institute, which
shall be used to provide business counseling and
assistance to small business concerns through the
activities of students enrolled at the institution,
which students shall be entitled to receive educational
credits for their activities.
(F) Notwithstanding any other provision of law and
pursuant to regulations which the Administrator shall
provide, counsel may be employed and counsel fees,
court costs, bail, and other expenses incidental to the
defense of volunteers may be paid in judicial or
Administrative proceedings arising directly out of the
performance of activities pursuant to section 8(b)(1)
of this Act, as amended (15 U.S.C. 637(b)(1)) to which
volunteers have been made parties.
(G) In carrying out its functions under this Act and
to carry out the activities authorized by title IV of
the Women's Business Ownership Act of 1988, the
Administration is authorized to accept, in the name of
the Administration, and employ or dispose of in
furtherance of the purposes of this Act, any money or
property, real, personal, or mixed, tangible, or
intangible, received by gift, devise, bequest, or
otherwise; and, further, to accept gratuitous services
and facilities.
(2) to make a complete inventory of all productive
facilities of small-business concerns or to arrange for
such inventory to be made by any other governmental
agency which has the facilities. In making any such
inventory, the appropriate agencies in the several
States may be requested to furnish an inventory of the
productive facilities of small-business concerns in
each respective State if such an inventory is available
or in prospect;
(3) to coordinate and to ascertain the means by which
the productive capacity of small-business concerns can
be most effectively utilized;
(4) to consult and cooperative with officers of the
Government having procurement or property disposal
powers, in order to utilize the potential productive
capacity of plants operated by small-business concerns;
(5) to obtain information as to methods and practices
which Government prime contractors utilize in letting
subcontracts and to take action to encourage the
letting of subcontracts by prime contractors to small-
business concerns at prices and on conditions and terms
which are fair and equitable;
(6) to determine within any industry the concerns,
firms, persons, corporations, partnerships,
cooperatives, or other business enterprises which are
to be designated ``small-business concerns'' for the
purpose of effectuating the provisions of this Act. To
carry out this purpose the Administrator, when
requested to do so, shall issue in response to each
such request an appropriate certificate certifying an
individual concern as a ``small-business concern'' in
accordance with the criteria expressed in this Act. Any
such certificate shall be subject to revocation when
the concern covered thereby ceases to be a ``small-
business concern.'' Offices of the Government having
procurement or lending powers, or engaging in the
disposal of Federal property or allocating materials or
supplies, or promulgating regulations affecting the
distribution of materials or supplies, shall accept as
conclusive the Administration's determination as to
which enterprises are to be designated ``small-business
concerns'', as authorized and directed under this
paragraph;
(7)(A) to certify to Government procurement officers,
and officers engaged in the sale and disposal of
Federal property, with respect to all elements of
responsibility, including, but not limited to,
capability, competency, capacity, credit, integrity,
perseverance, and tenacity, of any small business
concern or group of such concerns to receive and
perform a specific Government contract. A Government
procurement officer or an officer engaged in the sale
and disposal of Federal property may not, for any
reason specified in the preceding sentence, preclude
any small business concern or group of such concerns
from being awarded such contract without referring the
matter for a final disposition to the Administration.
(B) if a Government procurement officer finds that an
otherwise qualified small business concern may be
ineligible due to the provisions of section 35(a) of
title 41, United States Code (the Walsh-Healey Public
Contracts Act), he shall notify the Administration in
writing of such finding. The Administration shall
review such finding and shall either dismiss it and
certify the small business concern to be an eligible
Government contractor for a specific Government
contract or if it concurs in the finding, forward the
matter to the Secretary of Labor for final disposition,
in which case the Administration may certify the small
business concern only if the Secretary of Labor finds
the small business concern not to be in violation.
(C) in any case in which a small business concern or
group of such concerns has been certified by the
Administration pursuant to (A) or (B) to be a
responsible or eligible Government contractor as to a
specific Government contract, the officers of the
Government having procurement or property disposal
powers are directed to accept such certification as
conclusive, and shall let such Government contract to
such concern or group of concerns without requiring it
to meet any other requirement of responsibility or
eligibility. Notwithstanding the first sentence of this
subparagraph, the Administration may not establish an
exemption from referral or notification or refuse to
accept a referral or notification from a Government
procurement officer made pursuant to subparagraph (A)
or (B) of this paragraph, but nothing in this paragraph
shall require the processing of an application for
certification if the small business concern to which
the referral pertains declines to have the application
processed.
(8) to obtain from any Federal department,
establishment, or agency engaged in procurement or in
the financing of procurement or production such reports
concerning the letting of contracts and subcontracts
and the making of loans to business concerns as it may
deem pertinent in carrying out its functions under this
Act;
(9) to obtain from any Federal department,
establishment, or agency engaged in the disposal of
Federal property such reports concerning the
solicitation of bids, time of sale, or otherwise as it
may deem pertinent in carrying out its functions under
this Act;
(10) to obtain from suppliers of materials
information pertaining to the method of filling orders
and the bases for allocating their supply, whenever it
appears that any small business is unable to obtain
materials from its normal sources;
(11) to make studies and recommendations to the
appropriate Federal agencies to insure that a fair
proportion of the total purchases and contracts for
property and services for the Government be placed with
small-business enterprises, to insure that a fair
proportion of Government contacts for research and
development be placed with small-business concerns, to
insure that a fair proportion of the total sales of
Government property be made to small-business concerns,
and to insure a fair and equitable share of materials,
supplies, and equipment to small-business concerns;
(12) to consult and cooperate with all Government
agencies for the purpose of insuring that small-
business concerns shall receive fair and reasonable
treatment from such agencies;
(13) to establish such advisory boards and committees
as may be necessary to achieve the purposes of this Act
and of the Small Business Investment Act of 1958; to
call meetings of such boards and committees from time
to time; to pay the transportation expenses and a per
diem allowance in accordance with section 5703 of title
5, United States Code, to the members of such boards
and committees for travel and subsistence expenses
incurred at the request of the Administration in
connection with travel to points more than fifty miles
distant from the homes of such members in attending the
meetings of such boards and committees; and to rent
temporarily, within the District of Columbia or
elsewhere, such hotel or other accommodations as are
needed to facilitate the conduct of such meetings;
(14) to provide at the earliest practicable time such
information and assistance as may be appropriate,
including information concerning eligibility for loans
under section 7(b)(3), to local public agencies (as
defined in section 110(h) of the Housing Act of 1949)
and to small-business concerns to be displaced by
federally aided urban renewal projects in order to
assist such small-business concerns in reestablishing
their operations;
(15) to disseminate, without regard to the provisions
of section 3204 of title 39, United States Code, data
and information, in such form as it shall deem
appropriate, to public agencies, private organizations,
and the general public;
(16) to make studies of matters materially affecting
the competitive strength of small business, and of the
effect on small business of Federal laws, programs, and
regulations, and to make recommendations to the
appropriate Federal agency or agencies for the
adjustment of such programs and regulations to the
needs of small business; and
(17) to make grants to, and enter into contracts and
cooperative agreements with, educational institutions,
private businesses, veterans' nonprofit community-based
organizations, and Federal, State, and local
departments and agencies for the establishment and
implementation of outreach programs for disabled
veterans (as defined in section 4211(3) of title 38,
United States Code), veterans, and members of a reserve
component of the Armed Forces.
[(c) [Reserved.]]
(c) SCORE Program.--
(1) Definitions.--In this subsection:
(A) SCORE association.--The term ``SCORE
Association'' means the Service Corps of
Retired Executives Association or any successor
or other organization that enters into a
cooperative agreement (as described under
paragraph (2)) with the Administrator to
operate the SCORE program.
(B) SCORE foundation.--The term ``SCORE
Foundation'' means an organization with a
mission to support the SCORE Association and
volunteers of the SCORE program.
(C) SCORE program.--The term ``SCORE
program'' means the SCORE program authorized by
subsection (b)(1)(B).
(2) Cooperative agreement.--The Administrator shall
enter into a cooperative agreement with the SCORE
Association to carry out the SCORE program, which shall
include the following requirements:
(A) Administrator duties.--The Administrator
shall--
(i) conduct an annual financial
examination of the SCORE Association to
ensure that any costs paid for with
Federal funds are allowable, allocable,
and reasonable;
(ii) for contracts entered into by
the SCORE Association to provide goods
or services for the SCORE program of a
value greater than an amount determined
by the Administrator, review and
approve such contracts;
(iii) establish a system through
which the SCORE Association can provide
documentation relating to such
contracts; and
(iv) within 30 days of the receipt of
a quarterly report on the achievements
of the SCORE program submitted by the
SCORE Association, reconcile and
differences between such report and the
performance results of the SCORE
program reported in a management
information system of the Office of
Entrepreneurial Development.
(B) SCORE association duties.--The SCORE
Association shall--
(i) manage nationwide chapters of the
SCORE program;
(ii) develop guidance and provide
annual training to employees of the
SCORE Association on generating and
using program income from the SCORE
program;
(iii) submit documentation to the
Administrator verifying such annual
training is completed;
(iv) separate funds donated to the
SCORE Association from program income
and funds received pursuant to a
cooperative agreement; and
(v) establish requirements for
volunteers participating in the SCORE
program, including requirements that
each such volunteer shall--
(I) based on the business
experience and knowledge of the
volunteer--
(aa) provide personal
counseling, mentoring,
and coaching on the
process of starting,
expanding, managing,
buying, and selling a
business at no cost to
individuals who own, or
aspire to own, small
business concerns; and
(bb) facilitate free
or low-cost education
workshops for
individuals who own, or
aspire to own, small
business concerns; and
(II) as appropriate, use
tools, resources, and expertise
of other organizations to carry
out the SCORE program.
(C) Joint duties.--The Administrator, in
consultation with the SCORE Association, shall
ensure that the SCORE program and each chapter
of the SCORE program--
(i) develop and implement plans and
goals to more effectively and
efficiently provide services to
individuals in rural areas,
economically disadvantaged communities,
or other traditionally underserved
communities, including plans for
electronic initiatives, web-based
initiatives, chapter expansion,
partnerships, and the development of
new skills by volunteers participating
in the SCORE program; and
(ii) reinforce an inclusive culture
by recruiting diverse volunteers for
the chapters of the SCORE program.
(3) Online component.--In carrying out this
subsection, the SCORE Association shall make use of
online counseling, including by developing and
implementing webinars and an electronic mentoring
platform to expand access to services provided under
this subsection and to further support entrepreneurs.
(4) Accounting.--Not later than 6 months after the
date of the enactment of this subsection, the SCORE
Association shall--
(A) centralize all accounting and finance
systems of each chapter of the SCORE program
and develop a uniform policy and procedures to
manage Federal funds; and
(B) designate an employee of the SCORE
Association to serve as a compliance officer to
ensure expenditures of the SCORE program are
fully compliant with any law, regulation, or
cooperative agreement relating to the SCORE
program.
(5) Compensation.--
(A) Salaries.--The salary of an employee of
the SCORE Association may not exceed the
equivalent of the maximum rate of pay allowable
for an individual in the career Senior
Executive Service employed at the Small
Business Administration.
(B) Performance awards.--The SCORE
Association may spend up to 1.5 percent of the
aggregate salaries of employees of the SCORE
Association on individual performance awards to
employees of the SCORE Association, to be
disbursed before the last day of the fiscal
year, if not later than 60 days before
disbursement the SCORE Association submits to
the Administrator a report on the number and
amount of such awards to be disbursed.
(C) SCORE foundation.--A member of the Board
of Directors of the SCORE Association or an
employee of the SCORE Association may not
simultaneously serve on the Board of Directors
of, or receive compensation from, the SCORE
Foundation without written approval from the
Administrator.
(6) Whistleblower protection requirements.--The SCORE
Association shall--
(A) annually update all manuals or other
documents applicable to employees and
volunteers of the SCORE Association or the
SCORE program to include requirements relating
to reporting procedures and protectors for
whistleblowers; and
(B) conduct an annual training for employees
and volunteers of the SCORE Association or the
SCORE program on the requirements described in
paragraph (1) and emphasize the use of the
hotline established by the Office of the
Inspector General of the Small Business
Administration to submit whistleblower reports.
(7) Published materials.--The SCORE Association shall
ensure all published materials include written
acknowledgment of Small Business Administration support
of the SCORE program if such materials are paid for in
whole or in part by Federal funds.
(8) Privacy requirements.--
(A) In general.--Neither the Administrator
nor the SCORE Association may disclose the
name, address, or telephone number of any
individual or small business concern receiving
assistance from the SCORE Association without
the consent of such individual or small
business concern, unless--
(i) the Administrator is ordered to
make such a disclosure by a court in
any civil or criminal enforcement
action initiated by a Federal or State
agency; or
(ii) the Administrator determines
such a disclosure to be necessary for
the purpose of conducting a financial
audit of the SCORE program, in which
case disclosure shall be limited to the
information necessary for the audit.
(B) Administrator use of information.--This
paragraph shall not--
(i) restrict the access of the
Administrator to SCORE program activity
data; or
(ii) prevent the Administrator from
using SCORE program client information
to conduct client surveys.
(C) Standards.--
(i) In general.--The Administrator
shall, after the opportunity for notice
and comment, establish standards for--
(I) disclosures with respect
to financial audits under
subparagraph (A)(ii); and
(II) conducting client
surveys, including standards
for oversight of the surveys
and for dissemination and use
of client information.
(ii) Maximum privacy protection.--The
standards issued under this
subparagraph shall, to the extent
practicable, provide for the maximum
amount of privacy protection.
(9) Annual report.--Not later than 180 days after the
date of the enactment of this subsection and annually
thereafter, the Administrator shall submit to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House
of Representatives a report on the performance and
effectiveness of the SCORE program, which may be
included as part of another report submitted to such
Committees by the Administrator, and which shall
include--
(A) the number of individuals counseled or
trained under the SCORE program;
(B) the number of hours of counseling
provided under the SCORE program;
(C) the number of local workshops;
(D) the number of clients attending online
and local workshops;
(E) the number of unique clients served;
(F) to the extent practicable, the
demographics of SCORE program participants and
volunteers, which shall include the gender,
race, and age of each such participant or
volunteer;
(G) the cost to create a job, the cost to
create a business, and return on investment;
(H) the number of referrals to other
resources and programs of the Administration;
(I) the number of participants in the SCORE
program receiving financial assistance,
including the type and dollar amount, under
loan programs of the Administration;
(J) the results of SCORE program participant
satisfactory surveys, including a summary of
any comments received from such participants;
(K) the number of new businesses started up
by SCORE program participants;
(L) the number of such new businesses
realizing revenue growth;
(M) to the extent practicable, the number of
jobs created with assistance from the SCORE
program;
(N) the total cost of the SCORE program;
(O) any recommendations of the Administrator
to improve the SCORE program; and
(P) an explanation of how the SCORE program
has been integrated with other resource
partners and related resources of the
Administration.
(d)(1) It is the policy of the United States that small
business concerns, small business concerns owned and controlled
by veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business
concerns, small business concerns owned and controlled by
socially and economically disadvantaged individuals, and small
business concerns owned and controlled by women, shall have the
maximum practicable opportunity to participate in the
performance of contracts let by any Federal agency, including
contracts and subcontracts for subsystems, assemblies,
components, and related services for major systems. It is
further the policy of the United States that its prime
contractors establish procedures to ensure the timely payment
of amounts due pursuant to the terms of their subcontracts with
small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified HUBZone
small business concerns, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, and small business concerns owned and controlled
by women.
(2) The clause stated in paragraph (3) shall be included in
all contracts let by any Federal agency except any contract
which--
(A) does not exceed the simplified acquisition
threshold;
(B) including all subcontracts under such contracts
will be performed entirely outside of any State,
territory, or possession of the United States, the
District of Columbia, or the Commonwealth of Puerto
Rico; or
(C) is for services which are personal in nature.
(3) The clause required by paragraph (2) shall be as follows:
(A) It is the policy of the United States that small
business concerns, small business concerns owned and
controlled by veterans, small business concerns owned
and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women shall
have the maximum practicable opportunity to participate
in the performance of contracts let by any Federal
agency, including contracts and subcontracts for
subsystems, assemblies, components, and related
services for major systems. It is further the policy of
the United States that its prime contractors establish
procedures to ensure the timely payment of amounts due
pursuant to the terms of their subcontracts with small
business concerns, small business concerns owned and
controlled by veterans, small business concerns owned
and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women.
(B) The contractor hereby agrees to carry out this
policy in the awarding of subcontracts to the fullest
extent consistent with the efficient performance of
this contract. The contractor further agrees to
cooperate in any studies or surveys as may be conducted
by the United States Small Business Administration or
the awarding agency of the United States as may be
necessary to determine the extent of the contractor's
compliance with this clause.
(C) As used in this contract, the term ``small
business concern'' shall mean a small business as
defined pursuant to section 3 of the Small Business Act
and relevant regulations promulgated pursuant thereto.
The term ``small business concern owned and controlled
by socially and economically disadvantaged
individuals'' shall mean a small business concern--
(i) which is at least 51 per centum owned by
one or more socially and economically
disadvantaged individuals; or, in the case of
any publicly owned business, at least 51 per
centum of the stock of which is owned by one or
more socially and economically disadvantaged
individuals; and
(ii) whose management and daily business
operations are controlled by one or more of
such individuals.
The contractor shall presume that socially and
economically disadvantaged individuals include Black
Americans, Hispanic Americans, Native Americans, Asian
Pacific Americans, and other minorities, or any other
individual found to be disadvantaged by the
Administration pursuant to section 8(a) of the Small
Business Act.
(D) The term ``small business concern owned and
controlled by women'' shall mean a small business
concern--
(i) which is at least 51 per centum owned by
one or more women; or, in the case of any
publicly owned business, at least 51 per centum
of the stock of which is owned by one or more
women; and
(ii) whose management and daily business
operations are controlled by one or more women.
(E) The term ``small business concern owned and
controlled by veterans'' shall mean a small business
concern--
(i) which is at least 51 per centum owned by
one or more eligible veterans; or, in the case
of any publicly owned business, at least 51 per
centum of the stock of which is owned by one or
more veterans; and
(ii) whose management and daily business
operations are controlled by such veterans. The
contractor shall treat as veterans all
individuals who are veterans within the meaning
of the term under section 3(q) of the Small
Business Act.
(F) Contractors acting in good faith may rely on
written representations by their subcontractors
regarding their status as either a small business
concern, small business concern owned and controlled by
veterans, small business concern owned and controlled
by service-disabled veterans, a small business concern
owned and controlled by socially and economically
disadvantaged individuals, or a small business concern
owned and controlled by women.
(G) In this contract, the term ``qualified HUBZone
small business concern'' has the meaning given that
term in section 3(p) of the Small Business Act.
(H) In this contract, the term ``small business
concern owned and controlled by service-disabled
veterans'' has the meaning given that term in section
3(q).
(4)(A) Each solicitation of an offer for a contract to be let
by a Federal agency which is to be awarded pursuant to the
negotiated method of procurement and which may exceed
$1,000,000, in the case of a contract for the construction of
any public facility, or $500,000, in the case of all other
contracts, shall contain a clause notifying potential offering
companies of the provisions of this subsection relating to
contracts awarded pursuant to the negotiated method of
procurement.
(B) Before the award of any contract to be let, or any
amendment or modification to any contract let, by any Federal
agency which--
(i) is to be awarded, or was let, pursuant to the
negotiated method of procurement,
(ii) is required to include the clause stated in
paragraph (3),
(iii) may exceed $1,000,000 in the case of a contract
for the construction of any public facility, or
$500,000 in the case of all other contracts, and
(iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the
procurement authority a subcontracting plan which incorporates
the information prescribed in paragraph (6). The subcontracting
plan shall be included in and made a material part of the
contract.
(C) If, within the time limit prescribed in regulations of
the Federal agency concerned, the apparent successful offeror
fails to negotiate the subcontracting plan required by this
paragraph, such offeror shall become ineligible to be awarded
the contract. Prior compliance of the offeror with other such
subcontracting plans shall be considered by the Federal agency
in determining the responsibility of that offeror for the award
of the contract.
(D) No contract shall be awarded to any offeror unless the
procurement authority determines that the plan to be negotiated
by the offeror pursuant to this paragraph provides the maximum
practicable opportunity for small business concerns, qualified
HUBZone small business concerns, small business concerns owned
and controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, small business
concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns owned
and controlled by women to participate in the performance of
the contract.
(E) Notwithstanding any other provisions of law, every
Federal agency, in order to encourage subcontracting
opportunities for small business concerns, small business
concerns owned and controlled by veterans, small business
concerns owned and controlled by service-disabled veterans,
qualified HUBZone small business concerns, and small business
concerns owned and controlled by the socially and economically
disadvantaged individuals as defined in paragraph (3) of this
subsection and for small business concerns owned and controlled
by women, is hereby authorized to provide such incentives as
such Federal agency may deem appropriate in order to encourage
such subcontracting opportunities as may be commensurate with
the efficient and economical performance of the contact:
Provided, That, this subparagraph shall apply only to contracts
let pursuant to the negotiated method of procurement.
(F)(i) Each contract subject to the requirements of this
paragraph or paragraph (5) shall contain a clause for the
payment of liquidated damages upon a finding that a prime
contractor has failed to make a good faith effort to comply
with the requirements imposed on such contractor by this
subsection.
(ii) The contractor shall be afforded an opportunity to
demonstrate a good faith effort regarding compliance prior to
the contracting officer's final decision regarding the
impositon of damages and the amount thereof. The final decision
of a contracting officer regarding the contractor's obligation
to pay such damages, or the amounts thereof, shall be subject
to the Contract Disputes Act of 1978 (41 U.S.C. 601-613).
(iii) Each agency shall ensure that the goals offered by the
apparent successful bidder or offeror are attainable in
relation to--
(I) the subcontracting opportunities available to the
contractor, commensurate with the efficient and
economical performance of the contract;
(II) the pool of eligible subcontractors available to
fulfill the subcontracting opportunities; and
(III) the actual performance of such contractor in
fulfilling the subcontracting goals specified in prior
plans.
(G) The following factors shall be designated by the
Federal agency as significant factors for purposes of
evaluating offers for a bundled contract where the head
of the agency determines that the contract offers a
significant opportunity for subcontracting:
(i) A factor that is based on the rate
provided under the subcontracting plan for
small business participation in the performance
of the contract.
(ii) For the evaluation of past performance
of an offeror, a factor that is based on the
extent to which the offeror attained applicable
goals for small business participation in the
performance of contracts.
(5)(A) Each solicitation of a bid for any contract to be let,
or any amendment or modification to any contract let, by any
Federal agency which--
(i) is to be awarded pursuant to the formal
advertising method of procurement,
(ii) is required to contain the clause stated in
paragraph (3) of this subsection,
(iii) may exceed $1,000,000 in the case of a contract
for the construction of any public facility, or
$500,000, in the case of all other contracts, and
(iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to
be awarded a contract to submit to the Federal agency concerned
a subcontracting plan which incorporates the information
prescribed in paragraph (6).
(B) If, within the time limit prescribed in regulations of
the Federal agency concerned, the bidder selected to be awarded
the contract fails to submit the subcontracting plan required
by this paragraph, such bidder shall become ineligible to be
awarded the contract. Prior compliance of the bidder with other
such subcontracting plans shall be considered by the Federal
agency in determining the responsibility of such bidder for the
award of the contract. The subcontracting plan of the bidder
awarded the contract shall be included in and made a material
part of the contract.
(6) Each subcontracting plan required under paragraph (4) or
(5) shall include--
(A) percentage goals for the utilization as
subcontractors of small business concerns, small
business concerns owned and controlled by veterans,
small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, and small business concerns owned and
controlled by women;
(B) the name of an individual within the employ of
the offeror or bidder who will administer the
subcontracting program of the offeror or bidder and a
description of the duties of such individual;
(C) a description of the efforts the offeror or
bidder will take to assure that small business
concerns, small business concerns owned and controlled
by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women will
have an equitable opportunity to compete for
subcontracts;
(D) assurances that the offeror or bidder will
include the clause required by paragraph (2) of this
subsection in all subcontracts which offer further
subcontracting opportunities, and that the offeror or
bidder will require all subcontractors (except small
business concerns) who receive subcontracts in excess
of $1,000,000 in the case of a contract for the
construction of any public facility, or in excess of
$500,000 in the case of all other contracts, to adopt a
plan similar to the plan required under paragraph (4)
or (5), and assurances at a minimum that the offeror or
bidder, and all subcontractors required to maintain
subcontracting plans pursuant to this paragraph, will--
(i) review and approve subcontracting plans
submitted by their subcontractors;
(ii) monitor subcontractor compliance with
their approved subcontracting plans;
(iii) ensure that subcontracting reports are
submitted by their subcontractors when
required;
(iv) acknowledge receipt of their
subcontractors' reports;
(v) compare the performance of their
subcontractors to subcontracting plans and
goals; and
(vi) discuss performance with subcontractors
when necessary to ensure their subcontractors
make a good faith effort to comply with their
subcontracting plans;
(E) assurances that the offeror or bidder will submit
such periodic reports and cooperate in any studies or
surveys as may be required by the Federal agency or the
Administration in order to determine the extent of
compliance by the offeror or bidder with the
subcontracting plan;
(F) a recitation of the types of records the
successful offeror or bidder will maintain to
demonstrate procedures which have been adopted to
comply with the requirements and goals set forth in
this plan, including the establishment of source lists
of small business concerns, small business concerns
owned and controlled by veterans, small business
concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by
socially and economically disadvantaged individuals,
and small business concerns owned and controlled by
women; and efforts to identify and award subcontracts
to such small business concerns;
(G) a recitation of the types of records the
successful offeror or bidder will maintain to
demonstrate procedures which have been adopted to
ensure subcontractors at all tiers comply with the
requirements and goals set forth in the plan
established in accordance with subparagraph (D) of this
paragraph, including--
(i) the establishment of source lists of
small business concerns, small business
concerns owned and controlled by veterans,
small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone
small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and
small business concerns owned and controlled by
women; and
(ii) efforts to identify and award
subcontracts to such small business concerns;
and
(H) a representation that the offeror or bidder
will--
(i) make a good faith effort to acquire
articles, equipment, supplies, services, or
materials, or obtain the performance of
construction work from the small business
concerns used in preparing and submitting to
the contracting agency the bid or proposal, in
the same amount and quality used in preparing
and submitting the bid or proposal; and
(ii) provide to the contracting officer a
written explanation if the offeror or bidder
fails to acquire articles, equipment, supplies,
services, or materials or obtain the
performance of construction work as described
in clause (i).
(7) The head of the contracting agency shall ensure
that--
(A) the agency collects and reports data on
the extent to which contractors of the agency
meet the goals and objectives set forth in
subcontracting plans submitted pursuant to this
subsection; and
(B) the agency periodically reviews data
collected and reported pursuant to subparagraph
(A) for the purpose of ensuring that such
contractors comply in good faith with the
requirements of this subsection and
subcontracting plans submitted by the
contractors pursuant to this subsection.
(8) The provisions of paragraphs (4), (5), and (6) shall not
apply to offerors or bidders who are small business concerns.
(9) Material breach.--The failure of any contractor
or subcontractor to comply in good faith with--
(A) the clause contained in paragraph (3) of
this subsection,
(B) any plan required of such contractor
pursuant to the authority of this subsection to
be included in its contract or subcontract, or
(C) assurances provided under paragraph
(6)(E),
shall be a material breach of such contract or
subcontract and may be considered in any past
performance evaluation of the contractor.
(10) Nothing contained in this subsection shall be construed
to supersede the requirements of Defense Manpower Policy Number
4A (32A CFR Chap. 1) or any successor policy.
(11) In the case of contracts within the provisions of
paragraphs (4), (5), and (6), the Administration is authorized
to--
(A) assist Federal agencies and businesses in
complying with their responsibilities under the
provisions of this subsection, including the
formulation of subcontracting plans pursuant to
paragraph (4);
(B) review any solicitation for any contract to be
let pursuant to paragraphs (4) and (5) to determine the
maximum practicable opportunity for small business
concerns, small business concerns owned and controlled
by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women to
participate as subcontractors in the performance of any
contract resulting from any solicitation, and to submit
its findings, which shall be advisory in nature, to the
appropriate Federal agency; and
(C) evaluate compliance with subcontracting plans as
a supplement to evaluations performed by the
contracting agency, either on a contract-by-contract
basis or, in the case of contractors having multiple
contracts, on an aggregate basis.
(12) For purposes of determining the attainment of a
subcontract utilization goal under any subcontracting plan
entered into with any executive agency pursuant to this
subsection, a mentor firm providing development assistance to a
protege firm under the pilot Mentor-Protege Program established
pursuant to section 831 of the National Defense Authorization
Act for Fiscal Year 1991 (Public Law 101-510; 10 U.S.C. 2301
note) shall be granted credit for such assistance in accordance
with subsection (g) of such section.
(13) Payment of Subcontractors.--
(A) Definition.--In this paragraph, the term
``covered contract'' means a contract relating to which
a prime contractor is required to develop a
subcontracting plan under paragraph (4) or (5).
(B) Notice.--
(i) In general.--A prime contractor for a
covered contract shall notify in writing the
contracting officer for the covered contract if
the prime contractor pays a reduced price to a
subcontractor for goods and services upon
completion of the responsibilities of the
subcontractor or the payment to a subcontractor
is more than 90 days past due for goods or
services provided for the covered contract for
which the Federal agency has paid the prime
contractor.
(ii) Contents.--A prime contractor shall
include the reason for the reduction in a
payment to or failure to pay a subcontractor in
any notice made under clause (i).
(C) Performance.--A contracting officer for a covered
contract shall consider the unjustified failure by a
prime contractor to make a full or timely payment to a
subcontractor in evaluating the performance of the
prime contractor.
(D) Control of funds.--If the contracting officer for
a covered contract determines that a prime contractor
has a history of unjustified, untimely payments to
contractors, the contracting officer shall record the
identity of the contractor in accordance with the
regulations promulgated under subparagraph (E).
(E) Regulations.--Not later than 1 year after the
date of enactment of this paragraph, the Federal
Acquisition Regulatory Council established under
section 25(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 421(a)) shall amend the Federal
Acquisition Regulation issued under section 25 of such
Act to--
(i) describe the circumstances under which a
contractor may be determined to have a history
of unjustified, untimely payments to
subcontractors;
(ii) establish a process for contracting
officers to record the identity of a contractor
described in clause (i); and
(iii) require the identity of a contractor
described in clause (i) to be incorporated in,
and made publicly available through, the
Federal Awardee Performance and Integrity
Information System, or any successor thereto.
(14) An offeror for a covered contract that intends
to identify a small business concern as a potential
subcontractor in a bid or proposal for the contract, or
in a plan submitted pursuant to this subsection in
connection with the contract, shall notify the small
business concern prior to making such identification.
(15) The Administrator shall establish a reporting
mechanism that allows a subcontractor or potential
subcontractor to report fraudulent activity or bad
faith by a contractor with respect to a subcontracting
plan submitted pursuant to this subsection.
(16) Credit for Certain Subcontractors.--
(A) For purposes of determining whether or not a
prime contractor has attained the percentage goals
specified in paragraph (6)--
(i) if the subcontracting goals pertain only
to a single contract with the executive agency,
the prime contractor shall receive credit for
small business concerns performing as first
tier subcontractors or subcontractors at any
tier pursuant to the subcontracting plans
required under paragraph (6)(D) in an amount
equal to the dollar value of work awarded to
such small business concerns; and
(ii) if the subcontracting goals pertain to
more than one contract with one or more
executive agencies, or to one contract with
more than one executive agency, the prime
contractor may only count first tier
subcontractors that are small business
concerns.
(B) Nothing in this paragraph shall abrogate the
responsibility of a prime contractor to make a good-
faith effort to achieve the first tier small business
subcontracting goals negotiated under paragraph (6)(A),
or the requirement for subcontractors with further
opportunities for subcontracting to make a good-faith
effort to achieve the goals established under paragraph
(6)(D).
(17) Pilot program providing past performance ratings for
other small business subcontractors.--
(A) Establishment.--The Administrator shall establish
a pilot program for a small business concern without a
past performance rating as a prime contractor
performing as a first tier subcontractor for a covered
contract (as defined in paragraph (13)(A)) to request a
past performance rating in the system used by the
Federal Government to monitor or record contractor past
performance.
(B) Application.--A small business concern described
in subparagraph (A) shall submit an application to the
appropriate official for a past performance rating no
later than 270 days after the small business concern
completed the work for which it seeks a past
performance rating or 180 days after the prime
contractor completes work on the covered contract,
whichever is earlier. Such application shall include
written evidence of the past performance factors for
which the small business concern seeks a rating and a
suggested rating.
(C) Determination.--The appropriate official shall
submit the application from the small business concern
to the Office of Small and Disadvantaged Business
Utilization for the covered contract and to the prime
contractor for review. The Office of Small and
Disadvantaged Business Utilization and the prime
contractor shall, not later than 30 days after receipt
of the application, submit to the appropriate official
a response regarding the application.
(i) Agreement on rating.--If the Office of
Small and Disadvantaged Business Utilization
and the prime contractor agree on a past
performance rating, or if either the Office of
Small and Disadvantaged Business Utilization or
the prime contractor fail to respond and the
responding person agrees with the rating of the
applicant small business concern, the
appropriate official shall enter the agreed-
upon past performance rating in the system
described in subparagraph (A).
(ii) Disagreement on rating.--If the Office
of Small and Disadvantaged Business Utilization
and the prime contractor fail to respond within
30 days or if they disagree about the rating,
or if either the Office of Small and
Disadvantaged Business Utilization or the prime
contractor fail to respond and the responding
person disagrees with the rating of the
applicant small business concern, the Office of
Small and Disadvantaged Business Utilization or
the prime contractor shall submit a notice
contesting the application to the appropriate
official. The appropriate official shall follow
the requirements of subparagraph (D).
(D) Procedure for rating.--Not later than 14 calendar
days after receipt of a notice under subparagraph
(C)(ii), the appropriate official shall submit such
notice to the applicant small business concern. Such
concern may submit comments, rebuttals, or additional
information relating to the past performance of such
concern not later 14 calendar days after receipt of
such notice. The appropriate official shall enter into
the system described in subparagraph (A) a rating that
is neither favorable nor unfavorable along with the
initial application from such concern, any responses of
the Office of Small and Disadvantaged Business
Utilization and the prime contractor, and any
additional information provided by such concern. A copy
of the information submitted shall be provided to the
contracting officer (or designee of such officer) for
the covered contract.
(E) Use of information.--A small business
subcontractor may use a past performance rating given
under this paragraph to establish its past performance
for a prime contract.
(F) Duration.--The pilot program established under
this paragraph shall terminate 3 years after the date
on which the first applicant small business concern
receives a past performance rating for performance as a
first tier subcontractor.
(G) Report.--The Comptroller General of the United
States shall begin an assessment of the pilot program 1
year after the establishment of such program. Not later
than 6 months after beginning such assessment, the
Comptroller General shall submit a report to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House
of Representatives, which shall include--
(i) the number of small business concerns
and, set forth separately, the number of small
business exporters, that have received past
performance ratings under the pilot program;
(ii) the number of applications, set forth
separately by applications from small business
concerns and from small business exporters, in
which the contracting officer (or designee) or
the prime contractor contested the application
of the small business concern;
(iii) any suggestions or recommendations the
Comptroller General or the small business
concerns participating in the program have to
address disputes between the small business
concern, the contracting officer (or designee),
and the prime contractor on past performance
ratings;
(iv) the number of small business concerns
awarded prime contracts after receiving a past
performance rating under this pilot program;
and
(v) any suggestions or recommendation the
Comptroller General has to improve the
operation of the pilot program.
(H) Definitions.--In this paragraph--
(i) the term ``appropriate official'' means--
(I) a commercial market
representative;
(II) another individual designated by
the senior official appointed by the
Administrator with responsibilities
under sections 8, 15, 31, and 36; or
(III) the Office of Small and
Disadvantaged Business Utilization of a
Federal agency, if the head of the
Federal agency and the Administrator
agree;
(ii) the term ``defense item'' has the
meaning given that term in section 38(j)(4)(A)
of the Arms Export Control Act (22 U.S.C.
2778(j)(4)(A));
(iii) the term ``major non-NATO ally'' means
a country designated as a major non-NATO ally
under section 517 of the Foreign Assistance Act
of 1961 (22 U.S.C. 2321k);
(iv) the term ``past performance'' includes
performance of a contract for a sale of defense
items (under section 38 of the Arms Export
Control Act (22 U.S.C. 2778)) to the government
of a member nation of North Atlantic Treaty
Organization, the government of a major non-
NATO ally, or the government of a country with
which the United States has a defense
cooperation agreement (as certified by the
Secretary of State); and
(v) the term ``small business exporter''
means a small business concern that exports
defense items under section 38 of the Arms
Export Control Act (22 U.S.C. 2778) to the
government of a member nation of the North
Atlantic Treaty Organization, the government of
a major non-NATO ally, or the government of a
country with which the United States has a
defense cooperation agreement (as certified by
the Secretary of State).
(e)(1) Except as provided in subsection (g)--
(A) an executive agency intending to--
(i) solicit bids or proposals for a contract
for property or services for a price expected
to exceed $25,000; or
(ii) place an order, expected to exceed
$25,000, under a basic agreement, basis
ordering agreement, or similar arrangement,
shall publish a notice described in subsection (f);
(B) an executive agency intending to solicit bids or
proposals for a contract for property or services shall
post, for a period of not less than ten days, in a
public place at the contracting office issuing the
solicitation a notice of solicitation described in
subsection (f)--
(i) in the case of an executive agency other
than the Department of Defense, if the contract
is for a price expected to exceed $10,000, but
not to exceed $25,000; and
(ii) in the case of the Department of
Defense, if the contract is for a price
expected to exceed $5,000, but not to exceed
$25,000; and
(C) an executive agency awarding a contract for
property or services for a price exceeding $100,000, or
placing an order referred to in clause (A)(ii)
exceeding $100,000, shall furnish for publication by
the Secretary of Commerce a notice announcing the award
or order if there is likely to be any subcontract under
such contract or order.
(2)(A) A notice of solicitation required to be published
under paragraph (1) may be published--
(i) by electronic means that meet the accessibility
requirements under section 18(a)(7) of the Office of
Federal Procurement Policy Act (41 U.S.C. 416(a)(7));
or
(ii) by the Secretary of Commerce in the Commerce
Business Daily.
(B) The Secretary of Commerce shall promptly publish in the
Commerce Business Daily each notice or announcement received
under this subsection for publication by that means.
(3) Whenever an executive agency is required by paragraph
(1)(A) to publish a notice of solicitation, such executive
agency may not--
(A) issue the solicitation earlier than 15 days after
the date on which the notice is published; or
(B) in the case of a contract or order estimated to
be greater than the simplified acquisition threshold,
establish a deadline for the submission of all bids or
proposals in response to the notice required by
paragraph (1)(A) that--
(i) in the case of an order under a basic
agreement, basic ordering agreement, or similar
arrangement, is earlier than the date 30 days
after the date the notice required by paragraph
(1)(A)(ii) is published;
(ii) in the case of a solicitation for
research and development, is earlier than the
date 45 days after the date the notice required
by paragraph (1)(A)(i) is published; or
(iii) in any other case, is earlier than the
date 30 days after the date the solicitation is
issued.
(f) Each notice of solicitation required by subparagraph (A)
or (B) of subsection (e)(1) shall include--
(1) an accurate description of the property or
services to be contracted for, which description (A)
shall not be unnecessarily restrictive of competition,
and (B) shall include, as appropriate, the agency
nomenclature, National Stock Number or other part
number, and a brief description of the item's form,
fit, or function, physical dimensions, predominant
material of manufacture, or similar information that
will assist a prospective contractor to make an
informed business judgment as to whether a copy of the
solicitation should be requested;
(2) provisions that--
(A) state whether the technical data required
to respond to the solicitation will not be
furnished as part of such solicitation, and
identify the source in the Government, if any,
from which the technical data may be obtained;
and
(B) state whether an offeror, its product, or
service must meet a qualification requirement
in order to be eligible for award, and, if so,
identify the office from which a qualification
requirement may be obtained;
(3) the name, business address, and telephone number
of the contracting officer;
(4) a statement that all responsible sources may
submit a bid, proposal, or quotation (as appropriate)
which shall be considered by the agency;
(5) in the case of a procurement using procedures
other than competitive procedures, a statement of the
reason justifying the use of such procedures and the
identity of the intended source; and
(6) in the case of a contract in an amount estimated
to be greater than $25,000 but not greater than the
simplified acquisition threshold--
(A) a description of the procedures to be
used in awarding the contract; and
(B) a statement specifying the periods for
prospective offerors and the contracting
officer to take the necessary preaward and
award actions.
(g)(1) A notice is not required under subsection (e)(1) if--
(A) the proposed procurement is for an amount not
greater than the simplified acquisition threshold and
is to be conducted by--
(i) using widespread electronic public notice
of the solicitation in a form that allows
convenient and universal user access through a
single, Government-wide point of entry; and
(ii) permitting the public to respond to the
solicitation electronically.
(B) the notice would disclose the executive agency's
needs and the disclosure of such needs would compromise
the national security;
(C) the proposed procurement would result from
acceptance of--
(i) any unsolicited proposal that
demonstrates a unique and innovative research
concept and the publication of any notice of
such unsolicited research proposal would
disclose the originality of thought or
innovativeness of the proposal or would
disclose proprietary information associated
with the proposal; or
(ii) a proposal submitted under section 9 of
this Act;
(D) the procurement is made against an order placed
under a requirements contract;
(E) the procurement is made for perishable
subsistence supplies;
(F) the procurement is for utility services, other
than telecommunication services, and only one source is
available; or
(G) the procurement is for the services of an expert
for use in any litigation or dispute (including
preparation for any foreseeable litigation or dispute)
that involves or could involve the Federal Government
in any trial, hearing, or proceeding before any court,
administrative tribunal, or agency, or in any part of
an alternative dispute resolution process, whether or
not the expert is expected to testify.
(2) The requirements of subsection (a)(1)(A) do not apply to
any procurement under conditions described in paragraph (2),
(3), (4), (5), or (7) of section 303(c) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253(c)) or
paragraph (2), (3), (4), (5), and (7) of section 2304(c) of
title 10, United States Code.
(3) The requirements of subsection (a)(1)(A) shall not apply
in the case of any procurement for which the head of the
executive agency makes a determination in writing, after
consultation with the Administrator for Federal Procurement
Policy and the Administrator of the Small Business
Administration, that it is not appropriate or reasonable to
publish a notice before issuing a solicitation.
(h)(1) An executive agency may not award a contract using
procedures other than competitive procedures unless--
(A) except as provided in paragraph (2), a written
justification for the use of such procedures has been
approved--
(i) in the case of a contract for an amount
exceeding $100,000 (but equal to or less than
$1,000,000), by the advocate for competition
for the procuring activity (without further
delegation);
(ii) in the case of a contract for an amount
exceeding $1,000,000 (but equal to or less than
$10,000,000), by the head of the procuring
activity or a delegate who, if a member of the
Armed Forces, is a general or flag officer, or,
if a civilian, is serving in a position in
grade GS-16 or above under the General Schedule
(or in a comparable or higher position under
another schedule); or
(iii) in the case of a contract for an amount
exceeding $10,000,000, by the senior
procurement executive of the agency designated
pursuant to section 16(3) of the Office of
Federal Procurement Policy Act (41 U.S.C.
414(3)) (without further delegation); and
(B) all other requirements applicable to the use of
such procedures under title III of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 251
et sq.) or chapter 137 of title 10, United States Code,
as appropriate, have been satisfied.
(2) The same exceptions as are provided in section 303(f)(2)
of the Federal Property and Administrative Services Act of 1949
(41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10, United
States Code, shall apply with respect to the requirements of
paragraph (1)(A) of this subsection in the same manner as such
exceptions apply to the requirements of section 303(f)(1) of
such Act or section 2304(f)(1) of such title, as appropriate.
(i) An executive agency shall make available to any business
concern, or the authorized representative of such concern, the
complete solicitation package for any on-going procurement
announced pursuant to a notice under subsection (e). An
executive agency may require the payment of a fee, not
exceeding the actual cost of duplication, for a copy of such
package.
(j) For purposes of this section, the term ``executive
agency'' has the meaning provided such term in section 4(1) of
the Office of Federal Procurement Policy Act (41 U.S.C.
403(1)).
(k) Notices of Subcontracting Opportunities.--
(1) In general.--Notices of subcontracting
opportunities may be submitted for publication on the
appropriate Federal Web site (as determined by the
Administrator) by--
(A) a business concern awarded a contract by
an executive agency subject to subsection
(e)(1)(C); and
(B) a business concern that is a
subcontractor or supplier (at any tier) to such
contractor having a subcontracting opportunity
in excess of $10,000.
(2) Content of notice.--The notice of a
subcontracting opportunity shall include--
(A) a description of the business opportunity
that is comparable to the description specified
in paragraphs (1), (2), (3), and (4) of
subsection (f); and
(B) the due date for receipt of offers.
(l) Management Assistance for Small Businesses Affected by
Military Operations.--The Administration shall utilize, as
appropriate, its entrepreneurial development and management
assistance programs, including programs involving State or
private sector partners, to provide business counseling and
training to any small business concern adversely affected by
the deployment of units of the Armed Forces of the United
States in support of a period of military conflict (as defined
in section 7(n)(1)).
(m) Procurement Program for Women-owned Small Business
Concerns.--
(1) Definitions.--In this subsection, the following
definitions apply:
(A) Contracting officer.--The term
``contracting officer'' has the meaning given
such term in section 27(f)(5) of the Office of
Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).
(B) Small business concern owned and
controlled by women.--The term ``small business
concern owned and controlled by women'' has the
meaning given such term in section 3(n), except
that ownership shall be determined without
regard to any community property law.
(2) Authority to restrict competition.--In accordance
with this subsection, a contracting officer may
restrict competition for any contract for the
procurement of goods or services by the Federal
Government to small business concerns owned and
controlled by women, if--
(A) each of the concerns is not less than 51
percent owned by one or more women who are
economically disadvantaged (and such ownership
is determined without regard to any community
property law);
(B) the contracting officer has a reasonable
expectation that two or more small business
concerns owned and controlled by women will
submit offers for the contract;
(C) the contract is for the procurement of
goods or services with respect to an industry
identified by the Administrator pursuant to
paragraph (3);
(D) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price; and
(E) each of the concerns is certified by a
Federal agency, a State government, the
Administrator, or a national certifying entity
approved by the Administrator as a small
business concern owned and controlled by women.
(3) Waiver.--With respect to a small business concern
owned and controlled by women, the Administrator may
waive subparagraph (2)(A) if the Administrator
determines that the concern is in an industry in which
small business concerns owned and controlled by women
are substantially underrepresented.
(4) Identification of industries.--The Administrator
shall conduct a study to identify industries in which
small business concerns owned and controlled by women
are underrepresented with respect to Federal
procurement contracting.
(5) Enforcement; penalties.--
(A) Verification of eligibility.--In carrying
out this subsection, the Administrator shall
establish procedures relating to--
(i) the filing, investigation, and
disposition by the Administration of
any challenge to the eligibility of a
small business concern to receive
assistance under this subsection
(including a challenge, filed by an
interested party, relating to the
veracity of a certification made or
information provided to the
Administration by a small business
concern under paragraph (2)(E)); and
(ii) verification by the
Administrator of the accuracy of any
certification made or information
provided to the Administration by a
small business concern under paragraph
(2)(E).
(B) Examinations.--The procedures established
under subparagraph (A) may provide for program
examinations (including random program
examinations) by the Administrator of any small
business concern making a certification or
providing information to the Administrator
under paragraph (2)(E).
(C) Penalties.--In addition to the penalties
described in section 16(d), any small business
concern that is determined by the Administrator
to have misrepresented the status of that
concern as a small business concern owned and
controlled by women for purposes of this
subsection, shall be subject to--
(i) section 1001 of title 18, United
States Code; and
(ii) sections 3729 through 3733 of
title 31, United States Code.
(6) Provision of data.--Upon the request of the
Administrator, the head of any Federal department or
agency shall promptly provide to the Administrator such
information as the Administrator determines to be
necessary to carry out this subsection.
(7) Authority for sole source contracts for
economically disadvantaged small business concerns
owned and controlled by women.--A contracting officer
may award a sole source contract under this subsection
to any small business concern owned and controlled by
women described in paragraph (2)(A) and certified under
paragraph (2)(E) if--
(A) such concern is determined to be a
responsible contractor with respect to
performance of the contract opportunity and the
contracting officer does not have a reasonable
expectation that 2 or more businesses described
in paragraph (2)(A) will submit offers;
(B) the anticipated award price of the
contract (including options) will not exceed--
(i) $6,500,000, in the case of a
contract opportunity assigned a
standard industrial classification code
for manufacturing; or
(ii) $4,000,000, in the case of any
other contract opportunity; and
(C) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price.
(8) Authority for sole source contracts for small
business concerns owned and controlled by women in
substantially underrepresented industries.--A
contracting officer may award a sole source contract
under this subsection to any small business concern
owned and controlled by women certified under paragraph
(2)(E) that is in an industry in which small business
concerns owned and controlled by women are
substantially underrepresented (as determined by the
Administrator under paragraph (3)) if--
(A) such concern is determined to be a
responsible contractor with respect to
performance of the contract opportunity and the
contracting officer does not have a reasonable
expectation that 2 or more businesses in an
industry that has received a waiver under
paragraph (3) will submit offers;
(B) the anticipated award price of the
contract (including options) will not exceed--
(i) $6,500,000, in the case of a
contract opportunity assigned a
standard industrial classification code
for manufacturing; or
(ii) $4,000,000, in the case of any
other contract opportunity; and
(C) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price.
(n) Business Grants and Cooperative Agreements.--
(1) In general.--In accordance with this subsection,
the Administrator may make grants to and enter into
cooperative agreements with any coalition of private
entities, public entities, or any combination of
private and public entities--
(A) to expand business-to-business
relationships between large and small
businesses; and
(B) to provide businesses, directly or
indirectly, with online information and a
database of companies that are interested in
mentor-protege programs or community-based,
statewide, or local business development
programs.
(2) Matching requirement.--Subject to subparagraph
(B), the Administrator may make a grant to a coalition
under paragraph (1) only if the coalition provides for
activities described in paragraph (1)(A) or (1)(B) an
amount, either in kind or in cash, equal to the grant
amount.
(3) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $6,600,000, to remain available until
expended, for each of fiscal years 2001 through 2006.
* * * * * * *
Sec. 20. (a)(1) For fiscal year 2000 and each fiscal year
thereafter, there are authorized to be appropriated such sums
as may be necessary and appropriate, to remain available until
expended, and to be available solely--
(A) to carry out the Small Business Development
Center Program under section 21, but not to exceed the
annual funding level, as specified in section 21(a);
(B) to pay the expenses of the National Small
Business Development Center Advisory Board, as provided
in section 21(i);
(C) to pay the expenses of the information sharing
system, as provided in section 21(c)(8);
(D) to pay the expenses of the association referred
to in section 21(a)(3)(A) for conducting the
accreditation program, as provided in section 21(k)(2);
(E) to pay the expenses of the Administration,
including salaries of examiners, for conducting
examinations as part of the accreditation program
conducted by the association referred to in section
21(a)(3)(A); and
(F) to pay for small business development
center grants as mandated or directed by
Congress.
(2) Notwithstanding any other provision of law, the
Administration shall enter into commitments for direct loans
and to guarantee loans, debentures, payment of rentals, or
other amounts due under qualified contracts and other types of
financial assistance and enter into commitments to purchase
debentures and preferred securities and to guarantee sureties
against loss pursuant to programs under this Act and the Small
Business Investment Act of 1958, in the full amounts provided
by law subject only to (A) the availability of qualified
applications, and (B) limitations contained in appropriations
Acts. Nothing in this paragraph authorizes the Administration
to reduce or limit its authority to enter into such
commitments. Subject to approval in appropriations Acts,
amounts authorized for preferred 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 any 1 or more of the 4 subsequent
fiscal years.
(3) There are authorized to be transferred from the disaster
loan revolving fund such sums as may be necessary and
appropriate for administrative expenses of the Administration.
(4) Except as may be otherwise specifically 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 guaranteed);
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
sectors of the small business community or to specific
geographic regions of the United States.
(b) There are authorized to be appropriated to the
Administration for fiscal year 1991 such sums as may be
necessary to carry out the provisions of this Act and the Small
Business Investment Act of 1958. There also are hereby
authorized to be appropriated such sums as may be necessary and
appropriate for the carrying out of the provisions and
purposes, including administrative expenses, of sections
7(b)(1) and 7(b)(2) of this Act; and there are authorized to be
transferred from the disaster loan revolving fund such sums as
may be necessary and appropriate for such administrative
expenses.
(c) Disaster Mitigation Pilot Program.--The following program
levels are authorized for loans under section 7(b)(1)(C):
(1) $15,000,000 for fiscal year 2005.
(2) $15,000,000 for fiscal year 2006.
(d) Fiscal Year 2005.--
(1) Program levels.--The following program levels are
authorized for fiscal year 2005:
(A) For the programs authorized by this Act,
the Administration is authorized to make--
(i) $75,000,000 in technical
assistance grants, as provided in
section 7(m); and
(ii) $105,000,000 in direct loans, as
provided in 7(m).
(B) For the programs authorized by this Act,
the Administration is authorized to make
$23,050,000,000 in deferred participation loans
and other financings. Of such sum, the
Administration is authorized to make--
(i) $16,500,000,000 in general
business loans, as provided in section
7(a);
(ii) $6,000,000,000 in certified
development company financings, as
provided in section 7(a)(13) and as
provided in section 504 of the Small
Business Investment Act of 1958;
(iii) $500,000,000 in loans, as
provided in section 7(a)(21); and
(iv) $50,000,000 in loans, as
provided in section 7(m).
(C) For the programs authorized by title III
of the Small Business Investment Act of 1958,
the Administration is authorized to make--
(i) $4,250,000,000 in purchases of
participating securities; and
(ii) $3,250,000,000 in guarantees of
debentures.
(D) For the programs authorized by part B of
title IV of the Small Business Investment Act
of 1958, the Administration is authorized to
enter into guarantees not to exceed
$6,000,000,000, of which not more than 50
percent may be in bonds approved pursuant to
section 411(a)(3) of that Act.
(E) The Administration is authorized to make
grants or enter into cooperative agreements for
a total amount of $7,000,000 for the Service
Corps of Retired Executives program authorized
by section 8(b)(1).
(2) Additional authorizations.--
(A) There are authorized to be appropriated
to the Administration for fiscal year 2005 such
sums as may be necessary to carry out the
provisions of this Act not elsewhere provided
for, including administrative expenses and
necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the
Small Business Investment Act of 1958,
including salaries and expenses of the
Administration.
(B) Notwithstanding any other provision of
this paragraph, for fiscal year 2005--
(i) no funds are authorized to be
used as loan capital for the loan
program authorized by section 7(a)(21)
except by transfer from another Federal
department or agency to the
Administration, unless the program
level authorized for general business
loans under paragraph (1)(B)(i) is
fully funded; and
(ii) the Administration may not
approve loans on its own behalf or on
behalf of any other Federal 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 $2,000,000.
(e) Fiscal Year 2006.--
(1) Program levels.--The following program levels are
authorized for fiscal year 2006:
(A) For the programs authorized by this Act,
the Administration is authorized to make--
(i) $80,000,000 in technical
assistance grants, as provided in
section 7(m); and
(ii) $110,000,000 in direct loans, as
provided in 7(m).
(B) For the programs authorized by this Act,
the Administration is authorized to make
$25,050,000,000 in deferred participation loans
and other financings. Of such sum, the
Administration is authorized to make--
(i) $17,000,000,000 in general
business loans, as provided in section
7(a);
(ii) $7,500,000,000 in certified
development company financings, as
provided in section 7(a)(13) and as
provided in section 504 of the Small
Business Investment Act of 1958;
(iii) $500,000,000 in loans, as
provided in section 7(a)(21); and
(iv) $50,000,000 in loans, as
provided in section 7(m).
(C) For the programs authorized by title III
of the Small Business Investment Act of 1958,
the Administration is authorized to make--
(i) $4,500,000,000 in purchases of
participating securities; and
(ii) $3,500,000,000 in guarantees of
debentures.
(D) For the programs authorized by part B of
title IV of the Small Business Investment Act
of 1958, the Administration is authorized to
enter into guarantees not to exceed
$6,000,000,000, of which not more than 50
percent may be in bonds approved pursuant to
section 411(a)(3) of that Act.
(E) The Administration is authorized to make
grants or enter into cooperative agreements for
a total amount of $7,000,000 for the Service
Corps of Retired Executives program authorized
by section 8(b)(1).
(2) Additional authorizations.--
(A) There are authorized to be appropriated
to the Administration for fiscal year 2006 such
sums as may be necessary to carry out the
provisions of this Act not elsewhere provided
for, including administrative expenses and
necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the
Small Business Investment Act of 1958,
including salaries and expenses of the
Administration.
(B) Notwithstanding any other provision of
this paragraph, for fiscal year 2006--
(i) no funds are authorized to be
used as loan capital for the loan
program authorized by section 7(a)(21)
except by transfer from another Federal
department or agency to the
Administration, unless the program
level authorized for general business
loans under paragraph (1)(B)(i) is
fully funded; and
(ii) the Administration may not
approve loans on its own behalf or on
behalf of any other Federal 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 $2,000,000.
(f) Fiscal Year 2004 Purchase and Guarantee Authority Under
Title III of Small Business Investment Act of 1958.--For fiscal
year 2004, for the programs authorized by title III of the
Small Business Investment Act of 1958 (15 U.S.C. 681 et seq.),
the Administration is authorized to make--
(1) $4,000,000,000 in purchases of participating
securities; and
(2) $3,000,000,000 in guarantees of debentures.
(g) Authority To Increase Amount of General Business Loans.--
(1) In general.--Subject to paragraphs (2) and (3)
and with respect to fiscal year 2019 and each fiscal
year thereafter, if the Administrator determines that
the amount of commitments by the Administrator for
general business loans authorized under section 7(a)
for a fiscal year could exceed the limit on the total
amount of commitments the Administrator may make for
those loans under this Act, an appropriations Act, or
any other provision of law, the Administrator may make
commitments for those loans for that fiscal year in an
aggregate amount equal to not more than 115 percent of
that limit.
(2) Notice required before exercising authority.--Not
later than 30 days before the date on which the
Administrator intends to exercise the authority under
paragraph (1), the Administrator shall submit notice of
intent to exercise the authority to--
(A) the Committee on Small Business and
Entrepreneurship and the Subcommittee on
Financial Services and General Government of
the Committee on Appropriations of the Senate;
and
(B) the Committee on Small Business and the
Subcommittee on Financial Services and General
Government of the Committee on Appropriations
of the House of Representatives.
(3) Limitation.--The Administrator shall not exercise
the authority under paragraph (1) more than once during
any fiscal year.
(h) SCORE Program.--There are authorized to be appropriated
to the Administrator to carry out the SCORE program authorized
by section 8(b)(1) such sums as are necessary for the
Administrator to make grants or enter into cooperative
agreements in a total amount that does not exceed $11,700,000
in each of fiscal years 2020, 2021, and 2022.
* * * * * * *
SEC. 22. OFFICE OF INTERNATIONAL TRADE.
(a) Establishment.--
(1) Office.--There is established within the
Administration an Office of International Trade which
shall implement the programs pursuant to this section
for the primary purposes of increasing--
(A) the number of small business concerns
that export; and
(B) the volume of exports by small business
concerns.
(2) Associate administrator.--The head of the Office
shall be the Associate Administrator for International
Trade, who shall be responsible to the Administrator.
(b) Trade Distribution Network.--The Associate Administrator,
working in close cooperation with the Secretary of Commerce,
the United States Trade Representative, the Secretary of
Agriculture, the Secretary of State, the President of the
Export-Import Bank of the United States, the President of the
Overseas Private Investment Corporation, Director of the United
States Trade and Development Agency, and other relevant Federal
agencies, small business development centers engaged in export
promotion efforts, Export Assistance Centers, regional and
district offices of the Administration, the small business
community, and relevant State and local export promotion
programs, shall--
(1) maintain a distribution network, using regional
and district offices of the Administration, the small
business development center network, networks of
women's business centers, the [Service Corps of Retired
Executives] SCORE program authorized by section
8(b)(1), and Export Assistance Centers, for programs
relating to--
(A) trade promotion;
(B) trade finance;
(C) trade adjustment assistance;
(D) trade remedy assistance; and
(E) trade data collection;
(2) aggressively market the programs described in
paragraph (1) and disseminate information, including
computerized marketing data, to small business concerns
on exporting trends, market-specific growth, industry
trends, and international prospects for exports;
(3) promote export assistance programs through the
district and regional offices of the Administration,
the small business development center network, Export
Assistance Centers, the network of women's business
centers, chapters of the [Service Corps of Retired
Executives] SCORE program, State and local export
promotion programs, and partners in the private sector;
and
(4) give preference in hiring or approving the
transfer of any employee into the Office or to a
position described in subsection (c)(9) to otherwise
qualified applicants who are fluent in a language in
addition to English, to--
(A) accompany small business concerns on
foreign trade missions; and
(B) translate documents, interpret
conversations, and facilitate multilingual
transactions, including by providing referral
lists for translation services, if required.
(c) Promotion of Sales Opportunities.--The Associate
Administrator shall promote sales opportunities for small
business goods and services abroad. To accomplish this
objective the office shall--
(1) establish annual goals for the Office relating
to--
(A) enhancing the exporting capability of
small business concerns and small
manufacturers;
(B) facilitating technology transfers;
(C) enhancing programs and services to assist
small business concerns and small manufacturers
to compete effectively and efficiently in
foreign markets;
(D) increasing the ability of small business
concerns to access capital; and
(E) disseminating information concerning
Federal, State, and private programs and
initiatives;
(2) in cooperation with the Department of Commerce,
other relevant agencies, regional and local
Administration offices, the Small Business Development
Center network, and State programs, develop a mechanism
for--
(A) identifying subsectors of the small
business community with strong export
potential;
(B) identifying areas of demand in foreign
markets;
(C) prescreening foreign buyers for
commercial and credit purposes; and
(D) assisting in increasing international
marketing by disseminating relevant information
regarding market leads, linking potential
sellers and buyers, and catalyzing the
formation of joint ventures, where appropriate;
(3) in cooperation with the Department of Commerce,
actively assist small business concerns in forming and
using export trading companies, export management
companies and research and development pools authorized
under section 9 of this Act;
(4) work in conjunction with other Federal agencies,
regional and district offices of the Administration,
the small business development center network, and the
private sector to identify and publicize translation
services, including those available through colleges
and universities participating in the small business
development center program;
(5) work closely with the Department of Commerce and
other relevant Federal agencies to--
(A) collect, analyze and periodically update
relevant data regarding the small business
share of United States exports and the nature
of State exports (including the production of
Gross State Product figures) and disseminate
that data to the public and to Congress;
(B) make recommendations to the Secretary of
Commerce and to Congress regarding revision of
the North American Industry Classification
System codes to encompass industries currently
overlooked and to create North American
Industry Classification System codes for export
trading companies and export management
companies;
(C) improve the utility and accessibility of
existing export promotion programs for small
business concerns; and
(D) increase the accessibility of the Export
Trading Company contact facilitation service;
(6) make available to the small business community
information regarding conferences on exporting and
international trade sponsored by the public and private
sector;
(7) provide small business concerns with access to up
to date and complete export information by--
(A) making available, at the regional and
district offices of the Administration through
cooperation with the Department of Commerce,
export information, including, but not limited
to, the worldwide information and trade system
and world trade data reports;
(B) maintaining a list of financial
institutions that finance export operations;
(C) maintaining a directory of all Federal,
regional, State and private sector programs
that provide export information and assistance
to small business concerns; and
(D) preparing and publishing such reports as
it determines to be necessary concerning market
conditions, sources of financing, export
promotion programs, and other information
pertaining to the needs of small business
export firms so as to insure that the maximum
information is made available to small business
concerns in a readily usable form;
(8) encourage through cooperation with the Department
of Commerce, greater small business participation in
trade fairs, shows, missions, and other domestic and
overseas export development activities of the
Department of Commerce;
(9) facilitate decentralized delivery of export
information and assistance to small business concerns
by assigning primary responsibility for export
development to one individual in each district office
and providing each Administration regional office with
a full-time export development specialist, who shall--
(A) assist small business concerns in
obtaining export information and assistance
from other Federal departments and agencies;
(B) maintain a directory of all programs
which provide export information and assistance
to small business concerns in the region;
(C) encourage financial institutions to
develop and expand programs for export
financing;
(D) provide advice to personnel of the
Administration involved in making loans, loan
guarantees, and extensions and revolving lines
of credit, and providing other forms of
assistance to small business concerns engaged
in exports;
(E) within one hundred and eighty days of
their appointment, participate in training
programs designed by the Administrator, in
conjunction with the Department of Commerce and
other Federal departments and agencies, to
study export programs and to examine the needs
of small business concerns for export
information and assistance;
(F) participate, jointly with employees of
the Office, in an annual training program that
focuses on current small business needs for
exporting; and
(G) develop and conduct training programs for
exporters and lenders, in cooperation with the
Export Assistance Centers, the Department of
Commerce, the Department of Agriculture, small
business development centers, women's business
centers, the Export-Import Bank of the United
States, the Overseas Private Investment
Corporation, and other relevant Federal
agencies;
(10) make available on the website of the
Administration the name and contact information of each
individual described in paragraph (9);
(11) carry out a nationwide marketing effort using
technology, online resources, training, and other
strategies to promote exporting as a business
development opportunity for small business concerns;
(12) disseminate information to the small business
community through regional and district offices of the
Administration, the small business development center
network, Export Assistance Centers, the network of
women's business centers, chapters of the [Service
Corps of Retired Executives] SCORE program authorized
by section 8(b)(1), State and local export promotion
programs, and partners in the private sector regarding
exporting trends, market-specific growth, industry
trends, and prospects for exporting; and
(13) establish and carry out training programs for
the staff of the regional and district offices of the
Administration and resource partners of the
Administration on export promotion and providing
assistance relating to exports.
(d) Export Financing Programs.--
(1) In general.--The Associate Administrator shall
work in cooperation with the Export-Import Bank of the
United States, the Department of Commerce, other
relevant Federal agencies, and the States to develop a
program through which export specialists in the
regional offices of the Administration, regional and
local loan officers, and Small Business Development
Center personnel can facilitate the access of small
businesses to relevant export financing programs of the
Export-Import Bank of the United States and to export
and pre-export financing programs available from the
Administration and the private sector.
(2) Trade finance specialist.--To accomplish the goal
established under paragraph (1), the Associate
Administrator shall--
(A) designate at least 1 individual within
the Administration as a trade finance
specialist to oversee international loan
programs and assist Administration employees
with trade finance issues; and
(B) work in cooperation with the Export-
Import Bank and the small business community,
including small business trade associations,
to--
(i) aggressively market existing
Administration export financing and
pre-export financing programs;
(ii) identify financing available
under various Export-Import Bank
programs, and aggressively market those
programs to small businesses;
(iii) assist in the development of
financial intermediaries and facilitate
the access of those intermediaries to
existing financing programs;
(iv) promote greater participation by
private financial institutions,
particularly those institutions already
participating in loan programs under
this Act, in export finance; and
(v) provide for the participation of
appropriate Administration personnel in
training programs conducted by the
Export-Import Bank.
(e) Trade Remedies.--The Associate Administrator shall--
(1) work in cooperation with other Federal agencies
and the private sector to counsel small businesses with
respect to initiating and participating in any
proceedings relating to the administration of the
United States trade laws; and
(2) work with the Department of Commerce, the Office
of the United States Trade Representative, and the
International Trade Commission to increase access to
trade remedy proceedings for small businesses.
(f) Reporting Requirement.--The Associate Administrator shall
submit an annual report to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives that contains--
(1) a description of the progress of the Office in
implementing the requirements of this section;
(2) a detailed account of the results of export
growth activities of the Administration, including the
activities of each district and regional office of the
Administration, based on the performance measures
described in subsection (i);
(3) an estimate of the total number of jobs created
or retained as a result of export assistance provided
by the Administration and resource partners of the
Administration;
(4) for any travel by the staff of the Office, the
destination of such travel and the benefits to the
Administration and to small business concerns resulting
from such travel; and
(5) a description of the participation by the Office
in trade negotiations.
(g) Studies.--The Associate Administrator, in cooperation,
where appropriate, with the Division of Economic Research of
the Office of Advocacy, and with other Federal agencies, shall
undertake studies regarding the following issues and shall
report to the Committees on Small Business of the House of
Representatives and the Senate, and to other relevant
Committees of the House and Senate within 6 months after the
date of enactment of the Small Business International Trade and
Competitiveness Act with specific recommendations on--
(1) the viability and cost of establishing an annual,
competitive small business export incentive program
similar to the Small Business Innovation Research
program and alternative methods of structuring such a
program;
(2) methods of streamlining trade remedy proceedings
to increase access for, and reduce expenses incurred
by, smaller firms;
(3) methods of improving the current small business
foreign sales corporation tax incentives and providing
small businesses with greater benefits from this
initiative;
(4) methods of identifying potential export markets
for United States small businesses; maintaining and
disseminating current foreign market data; and devising
a comprehensive export marketing strategy for United
States small business goods and services, and shall
include data on the volume and dollar amount of goods
and services, identified by type, imported by United
States trading partners over the past 10 years; and
(5) the results of a survey of major United States
trading partners to identify the domestic policies,
programs and incentives, and the private sector
initiatives, which exist to encourage the formation and
growth of small business.
(h) Discharge of International Trade Responsibilities of
Administration.--The Administrator shall ensure that--
(1) the responsibilities of the Administration
regarding international trade are carried out by the
Associate Administrator;
(2) the Associate Administrator has sufficient
resources to carry out such responsibilities; and
(3) the Associate Administrator has direct
supervision and control over--
(A) the staff of the Office; and
(B) any employee of the Administration whose
principal duty station is an Export Assistance
Center, or any successor entity.
(i) Export and Trade Counseling.--
(1) Definition.--In this subsection--
(A) the term ``lead small business
development center'' means a small business
development center that has received a grant
from the Administration; and
(B) the term ``lead women's business center''
means a women's business center that has
received a grant from the Administration.
(2) Certification program.--The Administrator shall
establish an export and trade counseling certification
program to certify employees of lead small business
development centers and lead women's business centers
in providing export assistance to small business
concerns.
(3) Number of certified employees.--The Administrator
shall ensure that the number of employees of each lead
small business development center who are certified in
providing export assistance is not less than the lesser
of--
(A) 5; or
(B) 10 percent of the total number of
employees of the lead small business
development center.
(4) Reimbursement for certification.--
(A) In general.--Subject to the availability
of appropriations, the Administrator shall
reimburse a lead small business development
center or a lead women's business center for
costs relating to the certification of an
employee of the lead small business center or
lead women's business center in providing
export assistance under the program established
under paragraph (2).
(B) Limitation.--The total amount reimbursed
by the Administrator under subparagraph (A) may
not exceed $350,000 in any fiscal year.
(j) Performance Measures.--
(1) In general.--The Associate Administrator shall
develop performance measures for the Administration to
support export growth goals for the activities of the
Office under this section that include--
(A) the number of small business concerns
that--
(i) receive assistance from the
Administration;
(ii) had not exported goods or
services before receiving the
assistance described in clause (i); and
(iii) export goods or services;
(B) the number of small business concerns
receiving assistance from the Administration
that export goods or services to a market
outside the United States into which the small
business concern did not export before
receiving the assistance;
(C) export revenues by small business
concerns assisted by programs of the
Administration;
(D) the number of small business concerns
referred to an Export Assistance Center or a
small business development center by the staff
of the Office;
(E) the number of small business concerns
referred to the Administration by an Export
Assistance Center or a small business
development center; and
(F) the number of small business concerns
referred to the Department of Commerce, the
Department of Agriculture, the Department of
State, the Export-Import Bank of the United
States, the Overseas Private Investment
Corporation, or the United States Trade and
Development Agency by the staff of the Office,
an Export Assistance Center, or a small
business development center.
(2) Joint performance measures.--The Associate
Administrator shall develop joint performance measures
for the district offices of the Administration and the
Export Assistance Centers that include the number of
export loans made under--
(A) section 7(a)(16);
(B) the Export Working Capital Program
established under section 7(a)(14);
(C) the Preferred Lenders Program, as defined
in section 7(a)(2)(C)(ii); and
(D) the export express program established
under section 7(a)(34).
(3) Consistency of tracking.--The Associate
Administrator, in coordination with the departments and
agencies that are represented on the Trade Promotion
Coordinating Committee established under section 2312
of the Export Enhancement Act of 1988 (15 U.S.C. 4727)
and the small business development center network,
shall develop a system to track exports by small
business concerns, including information relating to
the performance measures developed under paragraph (1),
that is consistent with systems used by the departments
and agencies and the network.
(k) Export Assistance Centers.--
(1) Export finance specialists.--
(A) Minimum number of export finance
specialists.--On and after the date that is 90
days after the date of enactment of this
subsection, the Administrator, in coordination
with the Secretary of Commerce, shall ensure
that the number of export finance specialists
is not less than the number of such employees
so assigned on January 1, 2003.
(B) Export finance specialists assigned to
each region of the administration.--On and
after the date that is 2 years after the date
of enactment of this subsection, the
Administrator, in coordination with the
Secretary of Commerce, shall ensure that there
are not fewer than 3 export finance specialists
in each region of the Administration.
(2) Placement of export finance specialists.--
(A) Priority.--The Administrator shall give
priority, to the maximum extent practicable, to
placing employees of the Administration at any
Export Assistance Center that--
(i) had an Administration employee
assigned to the Export Assistance
Center before January 2003; and
(ii) has not had an Administration
employee assigned to the Export
Assistance Center during the period
beginning January 2003, and ending on
the date of enactment of this
subsection, either through retirement
or reassignment.
(B) Needs of exporters.--The Administrator
shall, to the maximum extent practicable,
strategically assign Administration employees
to Export Assistance Centers, based on the
needs of exporters.
(C) Rule of construction.--Nothing in this
subsection may be construed to require the
Administrator to reassign or remove an export
finance specialist who is assigned to an Export
Assistance Center on the date of enactment of
this subsection.
(3) Goals.--The Associate Administrator shall work
with the Department of Commerce, the Export-Import Bank
of the United States, and the Overseas Private
Investment Corporation to establish shared annual goals
for the Export Assistance Centers.
(4) Oversight.--The Associate Administrator shall
designate an individual within the Administration to
oversee all activities conducted by Administration
employees assigned to Export Assistance Centers.
(l) State Trade Expansion Program.--
(1) Definitions.--In this subsection--
(A) the term ``eligible small business
concern'' means a business concern that--
(i) is organized or incorporated in
the United States;
(ii) is operating in the United
States;
(iii) meets--
(I) the applicable industry-
based small business size
standard established under
section 3; or
(II) the alternate size
standard applicable to the
program under section 7(a) of
this Act and the loan programs
under title V of the Small
Business Investment Act of 1958
(15 U.S.C. 695 et seq.);
(iv) has been in business for not
less than 1 year, as of the date on
which assistance using a grant under
this subsection commences; and
(v) has access to sufficient
resources to bear the costs associated
with trade, including the costs of
packing, shipping, freight forwarding,
and customs brokers;
(B) the term ``program'' means the State
Trade Expansion Program established under
paragraph (2);
(C) the term ``rural small business concern''
means an eligible small business concern
located in a rural area, as that term is
defined in section 1393(a)(2) of the Internal
Revenue Code of 1986;
(D) the term ``socially and economically
disadvantaged small business concern'' has the
meaning given that term in section 8(a)(4)(A)
of the Small Business Act (15 U.S.C.
637(a)(4)(A)); and
(E) the term ``State'' means each of the
several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin
Islands, Guam, the Commonwealth of the Northern
Mariana Islands, and American Samoa.
(2) Establishment of program.--The Associate
Administrator shall establish a trade expansion
program, to be known as the ``State Trade Expansion
Program'', to make grants to States to carry out
programs that assist eligible small business concerns
in--
(A) participation in foreign trade missions;
(B) a subscription to services provided by
the Department of Commerce;
(C) the payment of website fees;
(D) the design of marketing media;
(E) a trade show exhibition;
(F) participation in training workshops;
(G) a reverse trade mission;
(H) procurement of consultancy services
(after consultation with the Department of
Commerce to avoid duplication); or
(I) any other initiative determined
appropriate by the Associate Administrator.
(3) Grants.--
(A) Joint review.--In carrying out the
program, the Associate Administrator may make a
grant to a State to increase the number of
eligible small business concerns in the State
exploring significant new trade opportunities.
(B) Considerations.--In making grants under
this subsection, the Associate Administrator
may give priority to an application by a State
that proposes a program that--
(i) focuses on eligible small
business concerns as part of a trade
expansion program;
(ii) demonstrates intent to promote
trade expansion by--
(I) socially and economically
disadvantaged small business
concerns;
(II) small business concerns
owned or controlled by women;
and
(III) rural small business
concerns;
(iii) promotes trade facilitation
from a State that is not 1 of the 10
States with the highest percentage of
eligible small business concerns that
are engaged in international trade,
based upon the most recent data from
the Department of Commerce; and
(iv) includes--
(I) activities which have
resulted in the highest return
on investment based on the most
recent year; and
(II) the adoption of shared
best practices included in the
annual report of the
Administration.
(C) Limitations.--
(i) Single application.--A State may
not submit more than 1 application for
a grant under the program in any 1
fiscal year.
(ii) Proportion of amounts.--The
total value of grants made under the
program during a fiscal year to the 10
States with the highest percentage of
eligible small business concerns, based
upon the most recent data available
from the Department of Commerce, shall
be not more than 40 percent of the
amounts appropriated for the program
for that fiscal year.
(iii) Duration.--The Associate
Administrator shall award a grant under
this program for a period of not more
than 2 years.
(D) Application.--
(i) In general.--A State desiring a
grant under the program shall submit an
application at such time, in such
manner, and accompanied by such
information as the Associate
Administrator may establish.
(ii) Consultation to reduce
duplication.--A State desiring a grant
under the program shall--
(I) before submitting an
application under clause (i),
consult with applicable trade
agencies of the Federal
Government on the scope and
mission of the activities the
State proposes to carry out
using the grant, to ensure
proper coordination and reduce
duplication in services; and
(II) document the
consultation conducted under
subclause (I) in the
application submitted under
clause (i).
(4) Competitive basis.--The Associate Administrator
shall award grants under the program on a competitive
basis.
(5) Federal share.--The Federal share of the cost of
a trade expansion program carried out using a grant
under the program shall be--
(A) for a State that has a high trade volume,
as determined by the Associate Administrator,
not more than 65 percent; and
(B) for a State that does not have a high
trade volume, as determined by the Associate
Administrator, not more than 75 percent.
(6) Non-federal share.--The non-Federal share of the
cost of a trade expansion program carried out using a
grant under the program shall be comprised of not less
than 50 percent cash and not more than 50 percent of
indirect costs and in-kind contributions, except that
no such costs or contributions may be derived from
funds from any other Federal program.
(7) Reports.--
(A) Initial report.--Not later than 120 days
after the date of enactment of this subsection,
the Associate Administrator shall submit to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives a report, which shall include--
(i) a description of the structure of
and procedures for the program;
(ii) a management plan for the
program; and
(iii) a description of the merit-
based review process to be used in the
program.
(B) Annual reports.--
(i) In general.--The Associate
Administrator shall publish on the
website of the Administration an annual
report regarding the program, which
shall include--
(I) the number and amount of
grants made under the program
during the preceding year;
(II) a list of the States
receiving a grant under the
program during the preceding
year, including the activities
being performed with each
grant;
(III) the effect of each
grant on the eligible small
business concerns in the State
receiving the grant;
(IV) the total return on
investment for each State; and
(V) a description of best
practices by States that showed
high returns on investment and
significant progress in helping
more eligible small business
concerns.
(ii) Notice to congress.--On the date
on which the Associate Administrator
publishes a report under clause (i),
the Associate Administrator shall
notify the Committee on Small Business
and Entrepreneurship of the Senate and
the Committee on Small Business of the
House of Representatives that the
report has been published.
(8) Reviews by inspector general.--
(A) In general.--The Inspector General of the
Administration shall conduct a review of--
(i) the extent to which recipients of
grants under the program are measuring
the performance of the activities being
conducted and the results of the
measurements; and
(ii) the overall management and
effectiveness of the program.
(B) Reports.--
(i) Pilot program.--Not later than 6
months after the date of enactment of
this subsection, the Inspector General
of the Administration shall submit to
the Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the
House of Representatives a report
regarding the use of amounts made
available under the State Trade and
Export Promotion Grant Program under
section 1207 of the Small Business Jobs
Act of 2010 (15 U.S.C. 649b note).
(ii) New step program.--Not later
than 18 months after the date on which
the first grant is awarded under this
subsection, the Inspector General of
the Administration shall submit to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the
House of Representatives a report
regarding the review conducted under
subparagraph (A).
(9) Authorization of appropriations.--There is
authorized to be appropriated to carry out the program
$30,000,000 for each of fiscal years 2016 through 2020.
(m) Definitions.--In this section--
(1) the term ``Associate Administrator'' means the
Associate Administrator for International Trade
described in subsection (a)(2);
(2) the term ``Export Assistance Center'' means a
one-stop shop for United States exporters established
by the United States and Foreign Commercial Service of
the Department of Commerce pursuant to section
2301(b)(8) of the Omnibus Trade and Competitiveness Act
of 1988 (15 U.S.C. 4721(b)(8));
(3) the term ``export finance specialist'' means a
full-time equivalent employee of the Office assigned to
an Export Assistance Center to carry out the duties
described in subsection (e); and
(4) the term ``Office'' means the Office of
International Trade established under subsection
(a)(1).
* * * * * * *
----------
SECTION 707 OF THE SMALL BUSINESS REAUTHORIZATION ACT OF 1997
SEC. 707. ENTREPRENEURIAL TRAINING, COUNSELING, AND MANAGEMENT
ASSISTANCE.
The Administrator shall take such actions as may be necessary
to ensure that small business concerns owned and controlled by
eligible veterans have access to programs established under the
Small Business Act that provide entrepreneurial training,
business development assistance, counseling, and management
assistance to small business concerns, including, among others,
the Small Business Development Center program and the [Service
Corps of Retired Executives (SCORE) program] SCORE program (as
defined in section 8(c)(1) of the Small Business Act).
----------
VETERANS ENTREPRENEURSHIP AND SMALL BUSINESS DEVELOPMENT ACT OF 1999
* * * * * * *
TITLE III--TECHNICAL ASSISTANCE
SEC. 301. SCORE PROGRAM.
(a) In General.--The Administrator of the Small Business
Administration shall enter into a memorandum of understanding
with the [Service Core of Retired Executives] SCORE program
(described in section 8(b)(1)(B) of the Small Business Act (15
U.S.C. 637(b)(1)(B)) and in this section referred to as
``SCORE'') to provide for the following:
(1) The appointment by SCORE in its national office
of an individual to act as National Veterans Business
Coordinator, whose duties shall relate exclusively to
veterans business matters, and who shall be responsible
for the establishment and administration of a program
to coordinate counseling and training regarding
entrepreneurship to veterans through the chapters of
SCORE throughout the United States.
(2) The assistance of SCORE in the establishing and
maintaining a toll-free telephone number and an
Internet website to provide access for veterans to
information about the counseling and training regarding
entrepreneurship available to veterans through SCORE.
(3) The collection of statistics concerning services
provided by SCORE to veterans, including service-
disabled veterans, for inclusion in each annual report
published by the Administrator under section 4(b)(2)(B)
of the Small Business Act (15 U.S.C. 633(b)(2)(B)).
(b) Resources.--The Administrator shall provide to SCORE such
resources as the Administrator determines necessary for SCORE
to carry out the requirements of the memorandum of
understanding specified in paragraph (1).
* * * * * * *
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MILITARY RESERVIST AND VETERAN SMALL BUSINESS REAUTHORIZATION AND
OPPORTUNITY ACT OF 2008
* * * * * * *
SEC. 3. DEFINITIONS.
In this Act--
(1) the term ``activated'' means receiving an order
placing a Reservist on active duty;
(2) the term ``active duty'' has the meaning given
that term in section 101 of title 10, United States
Code;
(3) the terms ``Administration'' and
``Administrator'' mean the Small Business
Administration and the Administrator thereof,
respectively;
(4) the term ``Reservist'' means a member of a
reserve component of the Armed Forces, as described in
section 10101 of title 10, United States Code;
(5) the term ``Service Corps of Retired Executives''
means [the Service Corps of Retired Executives] the
SCORE program authorized by section 8(b)(1) of the
Small Business Act (15 U.S.C. 637(b)(1));
(6) the terms ``service-disabled veteran'' and
``small business concern'' have the meaning as in
section 3 of the Small Business Act (15 U.S.C. 632);
(7) the term ``small business development center''
means a small business development center described in
section 21 of the Small Business Act (15 U.S.C. 648);
and
(8) the term ``women's business center'' means a
women's business center described in section 29 of the
Small Business Act (15 U.S.C. 656).
* * * * * * *
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CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT OF 2009
* * * * * * *
TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS
* * * * * * *
Subtitle C--Other Provisions
SEC. 621. OUTREACH REGARDING HEALTH INSURANCE OPTIONS AVAILABLE TO
CHILDREN.
(a) Definitions.--In this section--
(1) the terms ``Administration'' and
``Administrator'' means the Small Business
Administration and the Administrator thereof,
respectively;
(2) the term ``certified development company'' means
a development company participating in the program
under title V of the Small Business Investment Act of
1958 (15 U.S.C. 695 et seq.);
(3) the term ``Medicaid program'' means the program
established under title XIX of the Social Security Act
(42 U.S.C. 1396 et seq.);
[(4) the term ``Service Corps of Retired Executives''
means the Service Corps of Retired Executives
authorized by section 8(b)(1) of the Small Business Act
(15 U.S.C. 637(b)(1));]
(4) the term ``SCORE program'' means the SCORE
program authorized by section 8(b)(1)(B) of the Small
Business Act (15 U.S.C. 637(b)(1)(B));
(5) the term ``small business concern'' has the
meaning given that term in section 3 of the Small
Business Act (15 U.S.C. 632);
(6) the term ``small business development center''
means a small business development center described in
section 21 of the Small Business Act (15 U.S.C. 648);
(7) the term ``State'' has the meaning given that
term for purposes of title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.);
(8) the term ``State Children's Health Insurance
Program'' means the State Children's Health Insurance
Program established under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.);
(9) the term ``task force'' means the task force
established under subsection (b)(1); and
(10) the term ``women's business center'' means a
women's business center described in section 29 of the
Small Business Act (15 U.S.C. 656).
(b) Establishment of Task Force.--
(1) Establishment.--There is established a task force
to conduct a nationwide campaign of education and
outreach for small business concerns regarding the
availability of coverage for children through private
insurance options, the Medicaid program, and the State
Children's Health Insurance Program.
(2) Membership.--The task force shall consist of the
Administrator, the Secretary of Health and Human
Services, the Secretary of Labor, and the Secretary of
the Treasury.
(3) Responsibilities.--The campaign conducted under
this subsection shall include--
(A) efforts to educate the owners of small
business concerns about the value of health
coverage for children;
(B) information regarding options available
to the owners and employees of small business
concerns to make insurance more affordable,
including Federal and State tax deductions and
credits for health care-related expenses and
health insurance expenses and Federal tax
exclusion for health insurance options
available under employer- sponsored cafeteria
plans under section 125 of the Internal Revenue
Code of 1986;
(C) efforts to educate the owners of small
business concerns about assistance available
through public programs; and
(D) efforts to educate the owners and
employees of small business concerns regarding
the availability of the hotline operated as
part of the Insure Kids Now program of the
Department of Health and Human Services.
(4) Implementation.--In carrying out this subsection,
the task force may--
(A) use any business partner of the
Administration, including--
(i) a small business development
center;
(ii) a certified development company;
(iii) a women's business center; and
(iv) the [Service Corps of Retired
Executives] SCORE program;
(B) enter into--
(i) a memorandum of understanding
with a chamber of commerce; and
(ii) a partnership with any
appropriate small business concern or
health advocacy group; and
(C) designate outreach programs at regional
offices of the Department of Health and Human
Services to work with district offices of the
Administration.
(5) Website.--The Administrator shall ensure that
links to information on the eligibility and enrollment
requirements for the Medicaid program and State
Children's Health Insurance Program of each State are
prominently displayed on the website of the
Administration.
(6) Report.--
(A) In general.--Not later than 2 years after
the date of enactment of this Act, and every 2
years thereafter, the Administrator shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives a report on the status of the
nationwide campaign conducted under paragraph
(1).
(B) Contents.--Each report submitted under
subparagraph (A) shall include a status update
on all efforts made to educate owners and
employees of small business concerns on options
for providing health insurance for children
through public and private alternatives.
* * * * * * *
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ENERGY POLICY AND CONSERVATION ACT
* * * * * * *
TITLE III--IMPROVING ENERGY EFFICIENCY
* * * * * * *
Part B--Energy Conservation Program for Consumer Products Other Than
Automobiles
* * * * * * *
Consumer Education
Sec. 337. (a) In General.--The Secretary shall, in close
cooperation and coordination with the Commission and
appropriate industry trade associations and industry members,
including retailers, and interested consumer and environmental
organizations, carry out a program to educate consumers and
other persons with respect to--
(1) the significance of estimated annual operating
costs;
(2) the way in which comparative shopping, including
comparisons of estimated annual operating costs, can
save energy for the Nation and money for consumers; and
(3) such other matters as the Secretary determines
may encourage the conservation of energy in the use of
consumer products.
Such steps to educate consumers may include publications,
audiovisual presentations, demonstrations, and the sponsorship
of national and regional conferences involving manufacturers,
distributors, retailers, and consumers, and State, local, and
Federal Government representatives. Nothing in this section may
be construed to require the compilation of lists which compare
the estimated annual operating costs of consumer products by
model or manufacturer's name.
(b) State and Local Incentive Programs.--(1) The Secretary
shall, not later than one year after the date of the enactment
of this subsection, issue recommendations to the States for
establishing State and local incentive programs designed to
encourage the acceleration of voluntary replacement, by
consumers, of existing showerheads, faucets, water closets, and
urinals with those products that meet the standards established
for such products pursuant to subsections (j) and (k) of
section 325.
(2) In developing such recommendations, the Secretary shall
consult with the heads of other federal agencies, including the
Administrator of the Environmental Protection Agency; State
officials; manufacturers, suppliers, and installers of plumbing
products; and other interested parties.
(c) HVAC Maintenance.--(1) To ensure that installed air
conditioning and heating systems operate at maximum rated
efficiency levels, the Secretary shall, not later than 180 days
after the date of enactment of this subsection, carry out a
program to educate homeowners and small business owners
concerning the energy savings from properly conducted
maintenance of air conditioning, heating, and ventilating
systems.
(2) The Secretary shall carry out the program under paragraph
(1), on a cost-shared basis, in cooperation with the
Administrator of the Environmental Protection Agency and any
other entities that the Secretary determines to be appropriate,
including industry trade associations, industry members, and
energy efficiency organizations.
(d) Small Business Education and Assistance.--(1) The
Administrator of the Small Business Administration, in
consultation with the Secretary and the Administrator of the
Environmental Protection Agency, shall develop and coordinate a
Government-wide program, building on the Energy Star for Small
Business Program, to assist small businesses in--
(A) becoming more energy efficient;
(B) understanding the cost savings from improved
energy efficiency;
(C) understanding and accessing Federal procurement
opportunities with regard to Energy Star technologies
and products; and
(D) identifying financing options for energy
efficiency upgrades.
(2) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration shall--
(A) make program information available to small
business concerns directly through the district offices
and resource partners of the Small Business
Administration, including small business development
centers, women's business centers, and the [Service
Corps of Retired Executives (SCORE)] SCORE program, and
through other Federal agencies, including the Federal
Emergency Management Agency and the Department of
Agriculture; and
(B) coordinate assistance with the Secretary of
Commerce for manufacturing-related efforts, including
the Manufacturing Extension Partnership Program.
(3) The Secretary, on a cost shared basis in cooperation with
the Administrator of the Environmental Protection Agency, shall
provide to the Small Business Administration all advertising,
marketing, and other written materials necessary for the
dissemination of information under paragraph (2).
(4) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration, as part of the outreach to small business
concerns under the Energy Star Program for Small Business
Program, may enter into cooperative agreements with qualified
resources partners (including the National Center for
Appropriate Technology) to establish, maintain, and promote a
Small Business Energy Clearinghouse (in this subsection
referred to as the ``Clearinghouse'').
(5) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration shall ensure that the Clearinghouse provides a
centralized resource where small business concerns may access,
telephonically and electronically, technical information and
advice to help increase energy efficiency and reduce energy
costs.
(6) There are authorized to be appropriated such sums as are
necessary to carry out this subsection, to remain available
until expended.
* * * * * * *
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