1
SMALL BUSINESS ACT
[The Act of July 18, 1958]
[15 U.S.C. 631 et seq.; 72 Stat. 384 et seq.]
[As Amended Through P.L. 113–76, Enacted January 17, 2014]
AN ACT To amend the Small Business Act of 1953, as amended.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title II of the Act of July 30, 1953 (Public Law 163, Eighty-third Congress), as amended, is hereby withdrawn as a part of that Act and is made a separate Act to be known as the ‘‘Small Business Act’’.
SEC. 1. ø15 U.S.C. 631 note¿ This Act may be cited as the ‘‘Small Business Act’’.
SEC. 2. ø15 U.S.C. 631¿ (a) The essence of the American eco- nomic system of private enterprise is free competition. Only through full and free competition can free markets, free entry into business, and opportunities for the expression and growth of per- sonal initiative and individual judgment be assured. The preserva- tion and expansion of such competition is basic not only to the eco- nomic well-being but to the security of this Nation. Such security and well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enter- prise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Govern- ment (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-busi- ness enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to main- tain and strengthen the overall economy of the Nation.
(b)(1) It is the declared policy of the Congress that the Federal Government, through the Administrator of the Small Business Ad- ministration, acting through the Associate Administrator for Inter- national Trade, and in cooperation with the Department of Com- merce and other relevant State and Federal agencies, should aid and assist small businesses, as defined under this Act, to increase their ability to compete in international markets by—
(A) enhancing their ability to export; (B) facilitating technology transfers; (C) enhancing their ability to compete effectively and effi-
ciently against imports;
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1 So in original. The period probably should be a semicolon.
(D) increasing the access of small businesses to long-term capital for the purchase of new plant and equipment used in the production of goods and services involved in international trade;
(E) disseminating information concerning State, Federal, and private programs and initiatives to enhance the ability of small businesses to compete in international markets; and
(F) ensuring that the interests of small businesses are ade- quately represented in bilateral and multilateral trade negotia- tions. (2) The Congress recognizes that the Department of Commerce
is the principal Federal agency for trade development and export promotion and that the Department of Commerce and the Small Business Administration work together to advance joint interests. It is the purpose of this Act to enhance, not alter, their respective roles.
(c) It is the declared policy of the Congress that the Govern- ment, through the Small Business Administration, should aid and assist small business concerns which are engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries; and the financial assistance programs authorized by this Act are also to be used to assist such concerns.
(d)(1) The assistance programs authorized by sections 7(i) and 7(j) of this Act are to be utilized to assist in the establishment, preservation, and strengthening of small business concerns and im- prove the managerial skills employed in such enterprises, with spe- cial attention to small business concerns (1) located in urban or rural areas with high proportions of unemployed or low-income in- dividuals; or (2) owned by low-income individuals; and to mobilize for these objectives private as well as public managerial skills and resources.
(2)(A) With respect to the programs authorized by section 7(j) of this Act, the Congress finds—
(i) that ownership and control of productive capital is con- centrated in the economy of the United States and certain groups, therefore, own and control little productive capital’
(ii) that certain groups in the United States own and con- trol little productive capital because they have limited opportu- nities for small business ownership;
(iii) that the broadening of small business ownership among groups that presently own and control little productive capital is essential to provide for the well-being of this Nation by promoting their increased participation in the free enter- prise system of the United States;
(iv) that such development of business ownership among groups that presently own and control little productive capital will be greatly facilitated through the creation of a small busi- ness ownership development program, which shall provide services, including, but not limited to, financial, management, and technical assistance. 1
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2 Section 204(a) of Public Law 100–656, 102 Stat. 3859 amended section 2(c)(2)(A)(v), but should have referred to section 2(d)(2)(B), as it was redesignated by section 8002 of Public Law 100–418.
3 So in original. Probably should be ‘‘With’’.
(v) that the power to let 2 Federal contracts pursuant to section 8(a) of the Small Business Act can be an effective pro- curement assistance tool for development of business owner- ship among that own control little productive capital; and
(vi) that the procurement authority under section 8(a) of the Small Business Act shall be used only as a tool for devel- oping business ownership among groups that own and control little productive capital. (B) It is therefore the purpose of the programs authorized by
section 7(j) of this Act to— (i) foster business ownership and development by individ-
uals in groups that own and control little productive capital; and
(ii) promote the competitive viability of such firms in the marketplace by creating a small business and capital owner- ship development program to provide such available financial, technical, and management assistance as may be necessary. (e) Further, it is the declared policy of the Congress that the
Government should aid and assist victims of floods and other catas- trophes, and small-business concerns which are displaced as a re- sult of federally aided construction programs.
(f)(1) with 3 respect to the Administration’s business develop- ment programs the Congress finds—
(A) that the opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons is essential if we are to obtain social and economic equality for such persons and improve the functioning of our national economy;
(B) that many such persons are socially disadvantaged be- cause of their identification as members of certain groups that have suffered the effects of discriminatory practices or similar invidious circumstances over which they have no control;
(C) that such groups include, but are not limited to, Black Americans, Hispanic Americans, Native Americans, Indian tribes, Asian Pacific Americans, Native Hawaiian Organiza- tions, and other minorities;
(D) that it is in the national interest to expeditiously ame- liorate the conditions of socially and economically disadvan- taged groups;
(E) that such conditions can be improved by providing the maximum practicable opportunity for the development of small business concerns owned by members of socially economically disadvantaged groups;
(F) that such development can be materially advantaged through the procurement by the United States of articles, equipment, supplies, services, materials, and construction work from such concerns; and
(G) that such procurements also benefit the United States by encouraging the expansion of suppliers for such procure-
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4 Section 8002 of Public Law 100–418 (102 Stat. 1553) redesignates subsection (e) as (f) of sec- tion 2. Section 204(a)(2) of Public Law 100–656 (102 Stat. 3859) subsequently amended ‘‘2(e)(2) of the Act is amended to reads as follows:...’’. This latter amendment was executed to subsection (f)(2) as redesignated by Public Law 100–418.
5 So in original. Probably should be ‘‘management’’.
ments, thereby encouraging competition among such suppliers and promoting economy in such procurements. (2) 4 It is therefore the purpose of section 8(a) to—
(A) promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals so that such concerns can compete on an equal basis in the American economy;
(B) promote the competitive viability of such concerns in the marketplace by providing such available contract, financial, technical, and mangement 5 assistance as may be necessary; and
(C) clarify and expand the program for the procurement by the United States of articles, supplies, services, materials, and construction work from small business concerns owned by so- cially and economically disadvantaged individuals. (g) In administering the disaster loan program authorized by
section 7 of this Act, to the maximum extent possible, the Adminis- tration shall provide assistance and counseling to disaster victims in filing applications, providing information relevant to loan proc- essing, and in loan closing and prompt disbursement of loan pro- ceeds and shall give the disaster program a high priority in allo- cating funds for administrative expenses.
(h)(1) With respect to the programs and activities authorized by this Act, the Congress finds that—
(A) women owned business has become a major contributor to the American economy by providing goods and services, rev- enues, and jobs;
(B) over the past two decades there have been substantial gains in the social and economic status of women as they have sought economic equality and independence;
(C) despite such progress, women, as a group, are sub- jected to discrimination in entrepreneurial endeavors due to their gender;
(D) such discrimination takes many overt and subtle forms adversely impacting the ability to raise or secure capital, to ac- quire managerial talents, and to capture market opportunities;
(E) it is in the national interest to expeditiously remove discriminatory barriers to the creation and development of small business concerns owned and controlled by women;
(F) the removal of such barriers is essential to provide a fair opportunity for full participation in the free enterprise sys- tem by women and to further increase the economic vitality of the Nation;
(G) increased numbers of small business concerns owned and controlled by women will directly benefit the United States Government by expanding the potential number of suppliers of goods and services to the Government; and
(H) programs and activities designed to assist small busi- ness concerns owned and controlled by women must be imple-
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mented in such a way as to remove such discriminatory bar- riers while not adversely affecting the rights of socially and economically disadvantaged individuals. (2) It is, therefore, the purpose of those programs and activities
conducted under the authority of this Act that assist women entre- preneurs to—
(A) vigorously promote the legitimate interests of small business concerns owned and controlled by women;
(B) remove, insofar as possible, the discriminatory barriers that are encountered by women in accessing capital and other factors of production; and
(C) require that the Government engage in a systematic and sustained effort to identify, define and analyze those dis- criminatory barriers facing women and that such effort directly involve the participation of women business owners in the pub- lic/private sector partnership. (i) PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS NOT
LAWFULLY WITHIN THE UNITED STATES.—None of the funds made available pursuant to this Act may be used to provide any direct benefit or assistance to any individual in the United States if the Administrator or the official to which the funds are made available receives notification that the individual is not lawfully within the United States.
(j) CONTRACT BUNDLING.—In complying with the statement of congressional policy expressed in subsection (a), relating to fos- tering the participation of small business concerns in the con- tracting opportunities of the Government, each Federal agency, to the maximum extent practicable, shall—
(1) comply with congressional intent to foster the participa- tion of small business concerns as prime contractors, sub- contractors, and suppliers;
(2) structure its contracting requirements to facilitate com- petition by and among small business concerns, taking all rea- sonable steps to eliminate obstacles to their participation; and
(3) avoid unnecessary and unjustified bundling of contract requirements that precludes small business participation in procurements as prime contractors.
SEC. 3. ø15 U.S.C. 632¿ DEFINITIONS. (a) SMALL BUSINESS CONCERNS.—
(1) IN GENERAL.—For the purposes of this Act, a small- business concern, including but not limited to enterprises that are engaged in the business of production of food and fiber, ranching and raising of livestock, aquaculture, and all other farming and agricultural related industries, shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation: Provided, That not- withstanding any other provision of law, an agricultural enter- prise shall be deemed to be a small business concern if it (in- cluding its affiliates) has annual receipts not in excess of $750,000.
(2) ESTABLISHMENT OF SIZE STANDARDS.— (A) IN GENERAL.—In addition to the criteria specified
in paragraph (1), the Administrator may specify detailed
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definitions or standards by which a business concern may be determined to be a small business concern for the pur- poses of this Act or any other Act.
(B) ADDITIONAL CRITERIA.—The standards described in paragraph (1) may utilize number of employees, dollar vol- ume of business, net worth, net income, a combination thereof, or other appropriate factors.
(C) REQUIREMENTS.—Unless specifically authorized by statute, no Federal department or agency may prescribe a size standard for categorizing a business concern as a small business concern, unless such proposed size stand- ard—
(i) is proposed after an opportunity for public no- tice and comment;
(ii) provides for determining— (I) the size of a manufacturing concern as
measured by the manufacturing concern’s average employment based upon employment during each of the manufacturing concern’s pay periods for the preceding 12 months;
(II) the size of a business concern providing services on the basis of the annual average gross receipts of the business concern over a period of not less than 3 years;
(III) the size of other business concerns on the basis of data over a period of not less than 3 years; or
(IV) other appropriate factors; and (iii) is approved by the Administrator.
(3) VARIATION BY INDUSTRY AND CONSIDERATION OF OTHER FACTORS.—When establishing or approving any size standard pursuant to paragraph (2), the Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.
(4) EXCLUSION OF CERTAIN SECURITY EXPENSES FROM CON- SIDERATION FOR PURPOSE OF SMALL BUSINESS SIZE STAND- ARDS.—
(A) DETERMINATION REQUIRED.—Not later than 30 days after the date of enactment of this paragraph, the Ad- ministrator shall review the application of size standards established pursuant to paragraph (2) to small business concerns that are performing contracts in qualified areas and determine whether it would be fair and appropriate to exclude from consideration in the average annual gross re- ceipts of such small business concerns any payments made to such small business concerns by Federal agencies to re- imburse such small business concerns for the cost of sub- contracts entered for the sole purpose of providing security services in a qualified area.
(B) ACTION REQUIRED.—Not later than 60 days after the date of enactment of this paragraph, the Administrator shall either—
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(i) initiate an adjustment to the size standards, as described in subparagraph (A), if the Administrator determines that such an adjustment would be fair and appropriate; or
(ii) provide a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Rep- resentatives explaining in detail the basis for the de- termination by the Administrator that such an adjust- ment would not be fair and appropriate. (C) QUALIFIED AREAS.—In this paragraph, the term
‘‘qualified area’’ means— (i) Iraq, (ii) Afghanistan, and (iii) any foreign country which included a combat
zone, as that term is defined in section 112(c)(2) of the Internal Revenue Code of 1986, at the time of perform- ance of the relevant Federal contract or subcontract.
(5) ALTERNATIVE SIZE STANDARD.— (A) IN GENERAL.—The Administrator shall establish
an alternative size standard for applicants for business loans under section 7(a) and applicants for development company loans under title V of the Small Business Invest- ment Act of 1958 (15 U.S.C. 695 et seq.), that uses max- imum tangible net worth and average net income as an al- ternative to the use of industry standards.
(B) INTERIM RULE.—Until the date on which the alter- native size standard established under subparagraph (A) is in effect, an applicant for a business loan under section 7(a) or an applicant for a development company loan under title V of the Small Business Investment Act of 1958 may be eligible for such a loan if—
(i) the maximum tangible net worth of the appli- cant is not more than $15,000,000; and
(ii) the average net income after Federal income taxes (excluding any carry-over losses) of the applicant for the 2 full fiscal years before the date of the appli- cation is not more than $5,000,000.
(6) PROPOSED RULEMAKING.—In conducting rulemaking to revise, modify or establish size standards pursuant to this sec- tion, the Administrator shall consider, and address, and make publicly available as part of the notice of proposed rulemaking and notice of final rule each of the following:
(A) a detailed description of the industry for which the new size standard is proposed;
(B) an analysis of the competitive environment for that industry;
(C) the approach the Administrator used to develop the proposed standard including the source of all data used to develop the proposed rule making; and
(D) the anticipated effect of the proposed rulemaking on the industry, including the number of concerns not cur- rently considered small that would be considered small under the proposed rule making and the number of con-
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cerns currently considered small that would be deemed other than small under the proposed rulemaking. (7) COMMON SIZE STANDARDS.—In carrying out this sub-
section, the Administrator may establish or approve a single size standard for a grouping of 4-digit North American Indus- try Classification System codes only if the Administrator makes publicly available, not later than the date on which such size standard is established or approved, a justification demonstrating that such size standard is appropriate for each individual industry classification included in the grouping.
(8) NUMBER OF SIZE STANDARDS.—The Administrator shall not limit the number of size standards established pursuant to paragraph (2), and shall assign the appropriate size standard to each North American Industry Classification System Code. (b) For purposes of this Act, any reference to an agency or de-
partment of the United States, and the term ‘‘Federal agency,’’ shall have the meaning given the term ‘‘agency’’ by section 551(1) of title 5, United States Code, but does not include the United States Postal Service or the General Accounting Office.
(c)(1) For purposes of this Act, a qualified employee trust shall be eligible for any loan guarantee under section 7(a) with respect to a small business concern on the same basis as if such trust were the same legal entity as such concern.
(2) For purposes of this Act, the term ‘‘qualified employee trust’’ means, with respect to a small business concern, a trust—
(A) which forms part of an employee stock ownership plan (as defined in section 4975(e)(7) of the Internal Revenue Code of 1954)—
(i) which is maintained by such concern, and (ii) which provides that each participant in the plan is
entitle to direct the plan as to the manner in which voting rights under qualifying employer securities (as defined in section 4975(e)(8) of such Code) which are allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or charter) must be decided by a majority vote of outstanding common shares voted; and (B) in the case of any loan guarantee under section 7(a),
the trustee of which enters into an agreement with the Admin- istrator of which enters into an agreement with the Adminis- trator which is binding on the trust and no such small busi- ness concern and which provides that—
(i) the loan guaranteed under section 7(a) shall be used solely for the purchase of qualifying employer securi- ties of such concern.
(ii) all funds acquired by the concern in such purchase shall be used by such concern solely for the purposes for which such loan was guaranteed,
(iii) such concern will provide such funds as may be necessary for the timely repayment of such loan, and the property of such concern shall be available as security for repayment of such loan, and
(iv) all qualifying employer securities acquired by such trust in such purchase shall be allocated to the accounts
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of participants in such plan who are entitled to share in such allocation, and each participant has a nonforfeitable right, not later than the date such loan is repaid, to all such qualifying employer securities which are so allocated to the participant’s account.
(3) Under regulations which may be prescribed by the Adminis- trator, a trust may be treated as a qualified employee trust with respect to a small business concern if—
(A) the trust is maintained by an employee organization which represents at least 51 percent of the employee of such concern, and
(B) such concern maintains a plan— (i) which is an employee benefit plan which is de-
signed to invest primarily in qualifying employer securities (as defined in section 4975(e)(8) of the Internal Revenue Code of 1954).
(ii) which provides that each participant in the plan is entitled to direct the plan as to the manner in which vot- ing rights under qualifying employer securities which are allocated to the account of such participant are to be exer- cised with respect to a corporate matter which (by law or charter) must be decided by a majority vote of the out- standing common shares voted,
(iii) which provides that each participant who is enti- tled to distribution from the plan has a right, in the case of qualifying employer securities which are not readily tradable on an established market, to require that the con- cern repurchase such securities under a fair valuation for- mula, and
(iv) which meets such other requirements (similar to requirements applicable to employee ownership plans as defined in section 4975(e)(7) of the Internal Revenue Code of 1954) as the Administrator may prescribe, and (C) in the case of a loan guarantee under section 7(a), such
organization enters into an agreement with the Administration which is described in paragraph (2)(B). (d) For purposes of section 7 of this Act, the term ‘‘qualified In-
dian tribe’’ means an Indian tribe as defined in section 4(a) of the Indian Self-Determination and Education Assistance Act, which owns and controls 100 per centum of a small business concern.
(e) For purposes of section 7 of this Act, the term ‘‘public or pri- vate organization for the handicapped’’ means one—
(1) which is organized under the laws of the United States or of any State, operated in the interest of handicapped indi- viduals, the net income of which does not insure in whole or in part to the benefit of any shareholder or other individual;
(2) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
(3) which, in the production of commodities and in the pro- vision of services during any fiscal year in which it received fi- nancial 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.
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(f) For purposes of section 7 of this Act, the term ‘‘handicapped individual’’ means an individual—
(1) 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 employ- ment for which the person would otherwise be qualified or qualifiable; or
(2) who is a service-disabled veteran. (g) For purposes of section 7 of this Act, the term ‘‘energy
measures’’ includes— (1) solar thermal energy equipment which is either of the
active type based upon mechanically forced energy transfer or of the passive type based on convective, conductive, or radiant energy transfer or some combination equipment;
(2) photovoltaic cells and related equipment; (3) a product or service the primary purpose of which is
conservation of energy through devices or techniques which in- crease the energy through devices or techniques which increase the energy efficiency of existing equipment, methods of oper- ation, or systems which use fossil fuels, and which is on the Energy Conservation Measures list of the Secretary of Energy or which the Administrator determines to be consistent with the intent of this subsection;
(4) equipment the primary purpose of which is production of energy from wood, biological waste, grain, or other biomass source of energy;
(5) equipment the primary purpose of which is industrial cogeneration of energy, district heating, or production of energy from industrial waste;
(6) hydroelectric power equipment; (7) wind energy conversion equipment; and (8) engineering, architectural, consulting, or other profes-
sional services which are necessary or appropriate to aid citi- zens in using any of the measures described in paragraph (1) through (7). (h) For purposes of this Act, the term ‘‘credit elsewhere’’ means
the availability of credit from non-Federal sources on reasonable terms and conditions taking into consideration the prevailing rates and terms in the community in or near where the concern trans- acts business, or the homeowner resides, for similar purposes and periods of time.
(i) For purposes of section 7 of this Act, the term ‘‘homeowners’’ includes owners and lessees of residential property and also in- cludes personal property.
(j) For the purposes of this Act, the term ‘‘small agricultural co- operative’’ means an association (corporate or otherwise) acting pursuant to the provisions of the Agricultural Marketing Act (12 U.S.C. 1141j), whose size does not exceed the size standard estab- lished by the Administration for other similar agricultural small business concerns. In determining such size, the Administration shall regard the association as a business concern and shall not in- clude the income or employees of any member shareholder of such cooperative.
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6 So in original. Subsection enacted without a paragraph (2).
(k)(1) For the purposes of this Act, the term ‘‘disaster’’ means a sudden event which causes severe damage including, but not lim- ited to, floods, hurricanes, tornadoes, earthquakes, fires, explosions, volcanoes, windstorms, landslides or mudslides, tidal waves, com- mercial fishery failures or fishery resource disasters (as determined by the Secretary of Commerce under section 308(b) of the Inter- jurisdictional Fisheries Act of 1986), ocean conditions resulting in the closure of customary fishing waters, riots, civil disorders or other catastrophes, except it does not include economic dislocations.
(2) For purposes of section 7(b)(2), the term ‘‘disaster’’ in- cludes—
(A) drought; (B) below average water levels in the Great Lakes, or on
any body of water in the United States that supports commerce by small business concerns; and
(C) ice storms and blizzards. (l) For purposes of this Act—
(1) 6 the term ‘‘computer crime’’ means’’— (A) any crime committed against a small business con-
cern by means of the use of a computer; and (B) any crime involving the illegal use of, or tampering
with, a computer owned or utilized by a small business concern.
(m) For purposes of this Act, the term ‘‘simplified acquisition threshold’’ has the meaning given such term in section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)).
(n) For the purposes of this Act, a small business concern is a small business concern owned and controlled by women if—
(1) at least 51 percent of small business concern is owned by one or more women or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and
(2) the management and daily business operations of the business are controlled by one or more women. (o) DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS
AND RELATED TERMS.—In this Act: (1) BUNDLED CONTRACT.—The term ‘‘bundled contract’’
means a contract that is entered into to meet requirements that are consolidated in a bundling of contract requirements.
(2) BUNDLING OF CONTRACT REQUIREMENTS.—The term ‘‘bundling of contract requirements’’ means consolidating 2 or more procurement requirements for goods or services pre- viously provided or performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small-business concern due to—
(A) the diversity, size, or specialized nature of the ele- ments of the performance specified;
(B) the aggregate dollar value of the anticipated award;
(C) the geographical dispersion of the contract per- formance sites; or
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(D) any combination of the factors described in sub- paragraphs (A), (B), and (C). (3) SEPARATE SMALLER CONTRACT.—The term ‘‘separate
smaller contract’’, with respect to a bundling of contract re- quirements, means a contract that has been performed by 1 or more small business concerns or was suitable for award to 1 or more small business concerns. (p) DEFINITIONS RELATING TO HUBZONES.—In this Act:
(1) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The term ‘‘historically underutilized business zone’’ means any area located within 1 or more—
(A) qualified census tracts; (B) qualified nonmetropolitan counties; (C) lands within the external boundaries of an Indian
reservation; (D) redesignated areas; or (E) base closure areas.
(2) HUBZONE.—The term ‘‘HUBZone’’ means a historically underutilized business zone.
(3) HUBZONE SMALL BUSINESS CONCERN.—The term ‘‘HUBZone small business concern’’ means—
(A) a small business concern that is at least 51 percent owned and controlled by United States citizens;
(B) a small business concern that is— (i) an Alaska Native Corporation owned and con-
trolled by Natives (as determined pursuant to section 29(e)(1) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(1))); or
(ii) a direct or indirect subsidiary corporation, joint venture, or partnership of an Alaska Native Cor- poration qualifying pursuant to section 29(e)(1) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(1)), if that subsidiary, joint venture, or part- nership is owned and controlled by Natives (as deter- mined pursuant to section 29(e)(2)) of the Alaska Na- tive Claims Settlement Act (43 U.S.C. 1626(e)(2))); (C) a small business concern—
(i) that is wholly owned by one or more Indian tribal governments, or by a corporation that is wholly owned by one or more Indian tribal governments; or
(ii) that is owned in part by one or more Indian tribal governments, or by a corporation that is wholly owned by one or more Indian tribal governments, if all other owners are either United States citizens or small business concerns; (D) a small business concern that is—
(i) wholly owned by a community development cor- poration that has received financial assistance under part 1 of subchapter A of the Community Economic Development Act of 1981 (42 U.S.C. 9805 et seq.); or
(ii) owned in part by one or more community de- velopment corporations, if all other owners are either United States citizens or small business concerns; or (E) a small business concern that is—
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(i) a small agricultural cooperative organized or incorporated in the United States;
(ii) wholly owned by 1 or more small agricultural cooperatives organized or incorporated in the United States; or
(iii) owned in part by 1 or more small agricultural cooperatives organized or incorporated in the United States, if all owners are small business concerns or United States citizens.
(4) QUALIFIED AREAS.— (A) QUALIFIED CENSUS TRACT.—The term ‘‘qualified
census tract’’ has the meaning given that term in section 42(d)(5)(C)(ii) of the Internal Revenue Code of 1986.
(B) QUALIFIED NONMETROPOLITAN COUNTY.—The term ‘‘qualified nonmetropolitan county’’ means any county—
(i) that was not located in a metropolitan statis- tical area (as defined in section 143(k)(2)(B) of the In- ternal Revenue Code of 1986) at the time of the most recent census taken for purposes of selecting qualified census tracts under section 42(d)(5)(C)(ii) of the Inter- nal Revenue Code of 1986; and
(ii) in which— (I) the median household income is less than
80 percent of the nonmetropolitan State median household income, based on the most recent data available from the Bureau of the Census of the Department of Commerce;
(II) the unemployment rate is not less than 140 percent of the average unemployment rate for the United States or for the State in which such county is located, whichever is less, based on the most recent data available from the Secretary of Labor; or
(III) there is located a difficult development area, as designated by the Secretary of Housing and Urban Development in accordance with sec- tion 42(d)(5)(C)(iii) of the Internal Revenue Code of 1986, within Alaska, Hawaii, or any territory or possession of the United States outside the 48 contiguous States.
(C) REDESIGNATED AREA.—The term ‘‘redesignated area’’ means any census tract that ceases to be qualified under subparagraph (A) and any nonmetropolitan county that ceases to be qualified under subparagraph (B), except that a census tract or a nonmetropolitan county may be a ‘‘redesignated area’’ only until the later of—
(i) the date on which the Census Bureau publicly releases the first results from the 2010 decennial cen- sus; or
(ii) 3 years after the date on which the census tract or nonmetropolitan county ceased to be so quali- fied. (D) BASE CLOSURE AREA.—The term ‘‘base closure
area’’ means lands within the external boundaries of a
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military installation that were closed through a privatiza- tion process under the authority of—
(i) the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of division B of Public Law 101–510; 10 U.S.C. 2687 note);
(ii) title II of the Defense Authorization Amend- ments and Base Closure and Realignment Act (Public Law 100–526; 10 U.S.C. 2687 note);
(iii) section 2687 of title 10, United States Code; or
(iv) any other provision of law authorizing or di- recting the Secretary of Defense or the Secretary of a military department to dispose of real property at the military installation for purposes relating to base clo- sures of redevelopment, while retaining the authority to enter into a leaseback of all or a portion of the prop- erty for military use.
(5) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.— (A) IN GENERAL.—A HUBZone small business concern
is ‘‘qualified’’, if— (i) the small business concern has certified in
writing to the Administrator (or the Administrator otherwise determines, based on information submitted to the Administrator by the small business concern, or based on certification procedures, which shall be es- tablished by the Administration by regulation) that—
(I) it is a HUBZone small business concern— (aa) pursuant to subparagraph (A), (B),
(C), (D), or (E) of paragraph (3), and that its principal office is located in a HUBZone and not fewer than 35 percent of its employees re- side in a HUBZone; or
(bb) pursuant to paragraph (3)(C), and not fewer than 35 percent of its employees en- gaged in performing a contract awarded to the small business concern on the basis of a pref- erence provided under section 31(b) reside within any Indian reservation governed by one or more of the tribal government owners, or reside within any HUBZone adjoining any such Indian reservation; (II) the small business concern will attempt to
maintain the applicable employment percentage under subclause (I) during the performance of any contract awarded to the small business concern on the basis of a preference provided under section 31(b); and
(III) with respect to any subcontract entered into by the small business concern pursuant to a contract awarded to the small business concern under section 31, the small business concern will ensure that the requirements of section 46 are satisfied; and
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(ii) no certification made or information provided by the small business concern under clause (i) has been, in accordance with the procedures established under section 31(c)(1)—
(I) successfully challenged by an interested party; or
(II) otherwise determined by the Adminis- trator to be materially false.
(B) LIST OF QUALIFIED SMALL BUSINESS CONCERNS.— The Administrator shall establish and maintain a list of qualified HUBZone small business concerns, which list shall, to the extent practicable—
(i) once the Administrator has made the certifi- cation required by subparagraph (A)(i) regarding a qualified HUBZone small business concern and has determined that subparagraph (A)(ii) does not apply to that concern, include the name, address, and type of business with respect to each such small business con- cern;
(ii) be updated by the Administrator not less than annually; and
(iii) be provided upon request to any Federal agen- cy or other entity.
(6) NATIVE AMERICAN SMALL BUSINESS CONCERNS.— (A) ALASKA NATIVE CORPORATION.—The term ‘‘Alaska
Native Corporation’’ has the same meaning as the term ‘‘Native Corporation’’ in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).
(B) ALASKA NATIVE VILLAGE.—The term ‘‘Alaska Na- tive Village’’ has the same meaning as the term ‘‘Native village’’ in section 3 of the Alaska Native Claims Settle- ment Act (43 U.S.C. 1602).
(C) INDIAN RESERVATION.—The term ‘‘Indian reserva- tion’’—
(i) has the same meaning as the term ‘‘Indian country’’ in section 1151 of title 18, United States Code, except that such term does not include—
(I) any lands that are located within a State in which a tribe did not exercise governmental ju- risdiction on the date of the enactment of this paragraph, unless that tribe is recognized after that date of the enactment by either an Act of Congress or pursuant to regulations of the Sec- retary of the Interior for the administrative rec- ognition that an Indian group exists as an Indian tribe (part 83 of title 25, Code of Federal Regula- tions); and
(II) lands taken into trust or acquired by an Indian tribe after the date of the enactment of this paragraph if such lands are not located with- in the external boundaries of an Indian reserva- tion or former reservation or are not contiguous to the lands held in trust or restricted status on that date of the enactment; and
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(ii) in the State of Oklahoma, means lands that— (I) are within the jurisdictional areas of an
Oklahoma Indian tribe (as determined by the Sec- retary of the Interior); and
(II) are recognized by the Secretary of the In- terior as eligible for trust land status under part 151 of title 25, Code of Federal Regulations (as in effect on the date of the enactment of this para- graph).
(7) AGRICULTURAL COMMODITY.—The term ‘‘agricultural commodity’’ has the same meaning as in section 102 of the Ag- ricultural Trade Act of 1978 (7 U.S.C. 5602). (q) DEFINITIONS RELATING TO VETERANS.—In this Act, the fol-
lowing definitions apply: (1) SERVICE-DISABLED VETERAN.—The term ‘‘service-dis-
abled veteran’’ means a veteran with a disability that is serv- ice-connected (as defined in section 101(16) of title 38, United States Code).
(2) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS.—The term ‘‘small business con- cern owned and controlled by service-disabled veterans’’ means a small business concern—
(A) not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and
(B) the management and daily business operations of which are controlled by one or more service-disabled vet- erans or, in the case of a veteran with permanent and se- vere disability, the spouse or permanent caregiver of such veteran. (3) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY
VETERANS.—The term ‘‘small business concern owned and con- trolled by veterans’’ means a small business concern—
(A) not less than 51 percent of which is owned by one or more veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and
(B) the management and daily business operations of which are controlled by one or more veterans. (4) VETERAN.—The term ‘‘veteran’’ has the meaning given
the term in section 101(2) of title 38, United States Code. (5) RELIEF FROM TIME LIMITATIONS.—
(A) IN GENERAL.—Any time limitation on any quali- fication, certification, or period of participation imposed under this Act on any program that is available to small business concerns shall be extended for a small business concern that—
(i) is owned and controlled by— (I) a veteran who was called or ordered to ac-
tive duty under a provision of law specified in sec- tion 101(a)(13)(B) of title 10, United States Code, on or after September 11, 2001; or
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(II) a service-disabled veteran who became such a veteran due to an injury or illness incurred or aggravated in the active military, naval, or air service during a period of active duty pursuant to a call or order to active duty under a provision of law referred to in subclause (I) on or after Sep- tember 11, 2001; and (ii) was subject to the time limitation during such
period of active duty. (B) DURATION.—Upon submission of proper docu-
mentation to the Administrator, the extension of a time limitation under subparagraph (A) shall be equal to the period of time that such veteran who owned or controlled such a concern was on active duty as described in that subparagraph.
(C) EXCEPTION FOR PROGRAMS SUBJECT TO FEDERAL CREDIT REFORM ACT OF 1990.—The provisions of subpara- graphs (A) and (B) shall not apply to any programs subject to the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
(r) DEFINITIONS RELATING TO SMALL BUSINESS LENDING COM- PANIES.—As used in section 23 of this Act:
(1) SMALL BUSINESS LENDING COMPANY.—The term ‘‘small business lending company’’ means a business concern that is authorized by the Administrator to make loans pursuant to section 7(a) and whose lending activities are not subject to reg- ulation by any Federal or State regulatory agency.
(2) NON-FEDERALLY REGULATED SBA LENDER.—The term ‘‘non-Federally regulated SBA lender’’ means a business con- cern if—
(A) such concern is authorized by the Administrator to make loans under section 7;
(B) such concern is subject to regulation by a State; and
(C) the lending activities of such concern are not regu- lated by any Federal banking authority.
(s) MAJOR DISASTER.—In this Act, the term ‘‘major disaster’’ has the meaning given that term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).
(t) SMALL BUSINESS DEVELOPMENT CENTER.—In this Act, the term ‘‘small business development center’’ means a small business development center described in section 21.
(u) REGION OF THE ADMINISTRATION.—In this Act, the term ‘‘re- gion of the Administration’’ means the geographic area served by a regional office of the Administration established under section 4(a).
(v) MULTIPLE AWARD CONTRACT.—In this Act, the term ‘‘mul- tiple award contract’’ means—
(1) a multiple award task order contract or delivery order contract that is entered into under the authority of sections 303H through 303K of the Federal Property and Administra- tive Services Act of 1949 (41 U.S.C. 253h through 253k); and
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(2) any other indefinite delivery, indefinite quantity con- tract that is entered into by the head of a Federal agency with 2 or more sources pursuant to the same solicitation. (w) PRESUMPTION.—
(1) IN GENERAL.—In every contract, subcontract, coopera- tive agreement, cooperative research and development agree- ment, or grant which is set aside, reserved, or otherwise classi- fied as intended for award to small business concerns, there shall be a presumption of loss to the United States based on the total amount expended on the contract, subcontract, coop- erative agreement, cooperative research and development agreement, or grant whenever it is established that a business concern other than a small business concern willfully sought and received the award by misrepresentation.
(2) DEEMED CERTIFICATIONS.—The following actions shall be deemed affirmative, willful, and intentional certifications of small business size and status:
(A) Submission of a bid or proposal for a Federal grant, contract, subcontract, cooperative agreement, or co- operative research and development agreement reserved, set aside, or otherwise classified as intended for award to small business concerns.
(B) Submission of a bid or proposal for a Federal grant, contract, subcontract, cooperative agreement, or co- operative research and development agreement which in any way encourages a Federal agency to classify the bid or proposal, if awarded, as an award to a small business con- cern.
(C) Registration on any Federal electronic database for the purpose of being considered for award of a Federal grant, contract, subcontract, cooperative agreement, or co- operative research agreement, as a small business concern. (3) CERTIFICATION BY SIGNATURE OF RESPONSIBLE OFFI-
CIAL.— (A) IN GENERAL.—Each solicitation, bid, or application
for a Federal contract, subcontract, or grant shall contain a certification concerning the small business size and sta- tus of a business concern seeking the Federal contract, subcontract, or grant.
(B) CONTENT OF CERTIFICATIONS.—A certification that a business concern qualifies as a small business concern of the exact size and status claimed by the business concern for purposes of bidding on a Federal contract or sub- contract, or applying for a Federal grant, shall contain the signature of an authorized official on the same page on which the certification is contained. (4) REGULATIONS.—The Administrator shall promulgate
regulations to provide adequate protections to individuals and business concerns from liability under this subsection in cases of unintentional errors, technical malfunctions, and other simi- lar situations. (x) ANNUAL CERTIFICATION.—
(1) IN GENERAL.—Each business certified as a small busi- ness concern under this Act shall annually certify its small
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business size and, if appropriate, its small business status, by means of a confirming entry on the Online Representations and Certifications Application database of the Administration, or any successor thereto.
(2) REGULATIONS.—Not later than 1 year after the date of enactment of this subsection, the Administrator, in consulta- tion with the Inspector General and the Chief Counsel for Ad- vocacy of the Administration, shall promulgate regulations to ensure that—
(A) no business concern continues to be certified as a small business concern on the Online Representations and Certifications Application database of the Administration, or any successor thereto, without fulfilling the require- ments for annual certification under this subsection; and
(B) the requirements of this subsection are imple- mented in a manner presenting the least possible regu- latory burden on small business concerns.
(y) POLICY ON PROSECUTIONS OF SMALL BUSINESS SIZE AND STATUS FRAUD.—Not later than 1 year after the date of enactment of this subsection, the Administrator, in consultation with the At- torney General, shall issue a Government-wide policy on prosecu- tion of small business size and status fraud, which shall direct Fed- eral agencies to appropriately publicize the policy.
(z) AQUACULTURE BUSINESS DISASTER ASSISTANCE.—Subject to section 18(a) and notwithstanding section 18(b)(1), the Adminis- trator may provide disaster assistance under section 7(b)(2) to aquaculture enterprises that are small businesses.
(aa) VENTURE CAPITAL OPERATING COMPANY.—In this Act, the term ‘‘venture capital operating company’’ means an entity de- scribed in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13, Code of Federal Regulations (or any successor thereto).
(bb) HEDGE FUND.—In this Act, the term ‘‘hedge fund’’ has the meaning given that term in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
(cc) PRIVATE EQUITY FIRM.—In this Act, the term ‘‘private eq- uity firm’’ has the meaning given the term ‘‘private equity fund’’ in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
(dd) DEFINITIONS PERTAINING TO SUBCONTRACTING.—In this Act:
(1) SUBCONTRACT.—The term ‘‘subcontract’’ means a le- gally binding agreement between a contractor that is already under contract to another party to perform work, and a third party, hereinafter referred to as the subcontractor, for the sub- contractor to perform a part, or all, of the work that the con- tractor has undertaken.
(2) FIRST TIER SUBCONTRACTOR.—The term ‘‘first tier sub- contractor’’ means a subcontractor who has a subcontract di- rectly with the prime contractor.
(3) AT ANY TIER.—The term ‘‘at any tier’’ means any sub- contractor other than a subcontractor who is a first tier sub- contractor. SEC. 4. ø15 U.S.C. 633¿ (a) In order to carry out the policies
of this Act there is hereby created an agency under the name
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7 Section 103 of Public Law 96–481 (94 Stat. 2321) amended section 4(b) of the Small Business Act by ‘‘striking all after the phrase ‘Capital Ownership Development’ through the period and inserting in lieu thereof ‘and shall be responsible to the Administrator for the formulation and execution of the policies and programs under sections 7(j) and 8(a) of this Act which provide assistance to minority small business concerns.’ ’’.
There is uncertainty as to the correct manner in which to carry out this amendment. The version shown above was carried as if the amendment instruction stated ‘‘...through the period at the end...’’ of the subsection as opposed to the end of the penultimate sentence.
The last sentence of section 4(b), prior to the enactment of the amendment made by section 103 of Public Law 96–481, reads as follows: ‘‘The Deputy Administrator shall be Acting Adminis- trator of the Administration during the absence or disability of the Administrator or in the event of a vacancy in the office of the Administrator.’’.
‘‘Small Business Administration’’ (herein referred to as the Admin- istration), which Administration shall be under the general direc- tion and supervision of the President and shall not be affiliated with or be within any other agency or department of the Federal Government. The principal office of the Administration shall be lo- cated in the District of Columbia. The Administration may estab- lish such branch and regional offices in other places in the United States as may be determined by the Administrator of the Adminis- tration. As used in this Act, the term ‘‘United States’’ includes the several States, the Territories and possessions of the United States, the Commonwealth of Puerto Rico, the Trust territory of the Pacific Islands, and the District of Columbia.
(b)(1) The management of the Administration shall be vested in an Administrator who shall be appointed from civilian life by the President, by and with the advice and consent of the Senate, and who shall be a person of outstanding qualifications known to be fa- miliar and sympathetic with small business needs and problems. The Administrator shall not engage in any other business, voca- tion, or employment than that of serving as Administrator. In car- rying out the programs administered by the Small Business Ad- ministration including its lending and guaranteeing functions, the Administrator shall not discriminate on the basis of sex or marital status against any person or small business concern applying for or receiving assistance from the Small Business Administration, and the Small Business Administration shall give special consider- ation to veterans of the Armed Forces of the United States and their survivors or dependents. The President also may appoint a Deputy Administrator, by and with the advice and consent of the Senate. The Administrator is authorized to appoint Associate Ad- ministrators (including the Associate Administrator specified in section 201 of the Small Business Investment Act of 1958) to assist in the execution of the functions vested in the Administration. One such Associate Administrator shall be the Associate Administrator for Veterans Business Development, who shall administer the Of- fice of Veterans Business Development established under section 32. One of the Associate Administrators shall be designated at the time of his appointment as the Associate Administrator for Minor- ity Small Business and Capital Ownership Development who shall be an employee in the competitive service or in the Senior Execu- tive Service and a career appointee and shall be responsible to the Administrator for the formulation and execution of the policies and programs under sections 7(j) and 8(a) of this Act which provide as- sistance to minority small business concerns. 7 One such Associate Administrator shall be the Associate Administrator for Inter-
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national Trade, who shall be the head of the Office of International Trade established under section 22.
(2) the Administrator also shall be responsible for— (A) establishing and maintaining an external small busi-
ness economic data base for the purpose of providing the Con- gress and the Administration information on the economic con- dition and the expansion or contraction of the small business sector. To that end, the Administrator shall publish on a reg- ular basis national small business economic indices and, to the extent feasible, regional small business economic indices, which shall include, but need not be limited to, data on—
(i) employment layoffs, and new hires; (ii) number of business establishments and the types
of such establishments such as sole proprietorships, cor- porations, and partnerships;
(iii) number of business formation and failures; (iv) sales and new orders; (v) back orders; (vi) investment in plant and equipment; (vii) changes in inventory and rate of inventory turn-
over; (viii) sources and amounts of capital investment, in-
cluding debt, equity, and internally generated funds; (ix) debt to equity ratios; (x) exports; (xi) number and dollar amount of mergers and acquisi-
tions by size of acquiring and acquired firm; and (xii) concentration ratios; and
(B) publishing annually a report giving a comparative analysis and interpretation of the historical trends of the small business sector as reflected by the data acquired pursuant to subparagraph (A) of this subsection.
(3) RISK MANAGEMENT DATABASE.— (A) ESTABLISHMENT.—The Administration shall estab-
lish, within the management system for the loan programs authorized by subsections (a) and (b) of section 7 of this Act and title V of the Small Business Investment Act of 1958, a management information system that will gen- erate a database capable of providing timely and accurate information in order to identify loan underwriting, collec- tions, recovery, and liquidation problems.
(B) INFORMATION TO BE MAINTAINED.—In addition to such other information as the Administration considers ap- propriate, the database established under subparagraph (A) shall, with respect to each loan program described in subparagraph (A), include information relating to—
(i) the identity of the institution making the guar- anteed loan or issuing the debenture;
(ii) the identity of the borrower; (iii) the total dollar amount of the loan or deben-
ture; (iv) the total dollar amount of government expo-
sure in each loan;
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(v) the district of the Administration in which the borrower has its principal office;
(vi) the principal line of business of the borrower, as identified by Standard Industrial Classification Code (or any successor to that system);
(vii) the delinquency rate for each program (in- cluding number of instances and days overdue);
(viii) the number and amount of repurchases, losses, and recoveries in each program;
(ix) the number of deferrals or forbearances in each program (including days and number of in- stances);
(x) comparisons on the basis of loan program, lender, district and region of the Administration, for all the data elements maintained; and
(xi) underwriting characteristics of each loan that has entered into default, including term, amount and type of collateral, loan-to-value and other actual and projected ratios, line of business, credit history, and type of loan. (C) DEADLINE FOR OPERATIONAL CAPABILITY.—The
database established under subparagraph (A) shall— (i) be operational not later than June 30, 1997;
and (ii) capture data beginning on the first day of the
second quarter of fiscal year 1997 beginning after such date and thereafter.
(4)(A) The Administrator shall establish a small business com- puter security and education program to—
(i) provide small business concerns information regard- ing—
(I) utilization and management of computer tech- nology;
(II) computer crimes committed against small business concerns; and
(III) security for computers owned or utilized by small business concerns; (ii) provide for periodic forums for small business concerns
to improve their knowledge of the matters described in clause (i); and
(iii) provide training opportunities to educate small busi- ness users on computer security techniques. (B) The Administrator, after consultation with the Director of
Institute of Computer Sciences and Technology within the Depart- ment of Commerce, shall develop information and materials to carry out the activities described in subparagraph (A) of this para- graph.
(c)(1) There are hereby established in the Treasury the fol- lowing revolving funds; (A) a disaster loan fund which shall be available for financing functions performed under section 7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 7(d)(2), and 7(m) of this Act; and (B) a busi- ness loan and investment fund which shall be available for financ- ing functions performed under sections 5(g), 7(a), and 8(a) of this
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Act, and titles III, IV and V of the Small Business Investment Act of 1958.
(2) All repayments of loans and debentures, payments of inter- est and other receipts arising out of transactions heretofore or hereafter entered into by the Administration (A) pursuant to sec- tions 7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 7(b)(5), 7(b)(6), (7(b)(7), 7(b)(8), 7(d)(2), and 7(g) of this Act shall be paid into a disaster loan fund; and (B) pursuant to sections 5(g), 7(a), 7(h), 7(i), 7(l), 7(m), and 8(a) of this Act, and titles III, IV and V of the Small Business Invest- ment Act of 1958, shall be paid into the business loan and invest- ment fund.
(3) Unexpended balances of appropriations made to the fund pursuant to this subsection, as in effect immediately prior to the effective date of this paragraph, shall be allocated, together with related assets and liabilities, to the funds established by paragraph (1) in such amounts as the Administrator shall determine.
(4) The Administration shall submit to the Committees on Ap- propriations. Senate Select Committee on Small Business, and the Committee on Small Business of the House of Representatives, as soon as possible after the beginning of each calendar quarter, a full and complete report on the status of each of the funds established by paragraph (1). Business-type budgets for each of the funds es- tablished by paragraph (1) shall be prepared, transmitted to the Committees on Appropriations, the Senate Select Committee on Small Business, and the Committee on Small Business of the House of Representatives, and considered, and enacted in the man- ner prescribed by law (sections 102, 103, and 104 of the Govern- ment Corporation Control Act (31 U.S.C. 847–849)) for wholly owned Government corporations.
(5)(A) The Administration is authorized to make and issue notes to the Secretary of the Treasury for the purpose of obtaining funds necessary for discharging obligations under the revolving funds created by section 4(c)(1) of this Act and for authorized ex- penditures out of the funds. Such notes shall be in such form and denominations and have such maturities and be subject to such terms and conditions as may be prescribed by the Administration with the approval of the Secretary of the Treasury. Such notes shall bear interest at a rate fixed by the Secretary of the Treasury, taking into consideration the current average market yield of out- standing marketable obligations of the United States having matu- rities comparable to the notes issued by the Administration under this paragraph. The Secretary of the Treasury is authorized and di- rected to purchase any notes of the Administration issued here- under, and, for that purpose, the Secretary of the Treasury is au- thorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which such securities may be issued under such Act, as amended, are extended to include the purchase of notes issued by the Administration. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes shall be treated as public debt transactions of the United States. All borrowing authority contained herein shall be effective only to such extent or in such amounts as are provided in advance in ap- propriation Acts.
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(B)(i) Moneys in the funds established in subsection (c)(1) not needed for current operations may be paid into miscellaneous re- ceipts of the Treasury.
(ii) Following the close of each fiscal year, the Administration shall pay into the miscellaneous receipts of the United States Treasury the actual interest that the Administration collects dur- ing that fiscal year on all financings made under this Act.
(C) Except on those loan disbursements on which interest is paid under subsection (B)(ii), the Administration shall pay into miscellaneous receipts of the Treasury, following the close of each fiscal year, interest received by the Administration on financing functions performed under this Act and titles III and V of the Small business Investment Act of 1958 providing the capital used to perform such functions originated from appropriated funds. Such payments shall be treated by the Department of the Treasury as interest income, not as retirement of indebtedness.
(D) There are authorized to be appropriated, in any fiscal year, such sums as may be necessary for losses and interest subsidies in- curred by the funds established by subsection (c)(1), but not pre- viously reimbursed.
(d) There is hereby created the Loan Policy Board of the Small Business Administration, which shall consist of the following mem- bers, all ex officio: The Administration, as Chairman, the Secretary of the Treasury, and the Secretary of Commerce. Either of the said Secretaries may designate an officer of his Department, who has been appointed by the President by and with the advice and con- sent of the Senate, to act in his stead as a member of the Loan Pol- icy Board with respect to any matter or matters. The Loan Policy Board shall establish general policies (particularly with reference to the public interest involved in the granting and denial of appli- cations for financial assistance by the Administration and with ref- erence to the coordination of the functions of the Administration with other activities and policies of the Government), which shall govern the granting and denial of applications for financial assist- ance by the Administration.
(e) PROHIBITION ON THE PROVISION OF ASSISTANCE.—Notwith- standing any other provision of law, the Administration is prohib- ited from providing any financial or other assistance to any busi- ness concern or other person engaged in the production or distribu- tion of any product or service that has been determined to be ob- scene by a court of competent jurisdiction.
(f) CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT OBLI- GATIONS.—
(1) IN GENERAL.—For financial assistance approved after the promulgation of final regulations to implement this section, each recipient of financial assistance under this Act, including a recipient of a direct loan or a loan guarantee, shall certify that the recipient is not more than 60 days delinquent under the terms of any—
(A) administrative order; (B) court order; or (C) repayment agreement entered into between the re-
cipient and the custodial parent or State agency providing child support enforcement services,
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that requires the recipient to pay child support, as such term is defined in section 462(b) of the Social Security Act.
(2) ENFORCEMENT.—Not later than 6 months after the date of enactment of this subsection, the Administration shall pro- mulgate such regulations as may be necessary to enforce com- pliance with the requirements of this subsection. SEC. 5. ø15 U.S.C. 634¿ (a) The Administration shall have
power to adopt, alter, and use a seal, which shall be judicially no- ticed. The Administrator is authorized, subject to the civil-service and classification laws, to select, employ, appoint, and fix the com- pensation of such officers, employees, attorneys, and agents as shall be necessary to carry out the provisions of this Act; to define their authority and duties; and to pay the costs of qualification of certain authority and duties; and to pay the costs of qualification of certain of them as notaries public. The Administration, with the consent of any board, commission, independent establishment, or executive department of the Government, may avail itself on a re- imbursable or nonreimbursable basis of the use of information, services, facilities (including any field service thereof), officers, and employees thereof, in carrying out the provisions of this Act.
(b) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act the Administrator may—
(1) sue and be sued in any court of record of a State hav- ing general jurisdiction, or in any United States district court, and jurisdiction is conferred upon such district court to deter- mine such controversies without regard to the amount in con- troversy; but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Ad- ministrator or his property;
(2) under regulations prescribed by him, assign or sell at public or private sale, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any evidence of debt, contract claim, personal prop- erty, or security assigned to or held by him in connection with the payment of loans granted under this Act, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such loans until such time as such obligations may be referred to the Attorney General for suit or collection;
(3) deal with, complete, renovate, improve, modernize, in- sure, or rent, or sell for cash or credit upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any real property conveyed to or otherwise acquired by him in connection with the pay- ment of loans granted under this Act;
(4) pursue to final collection, by way of compromise or oth- erwise, all claims against third parties assigned to the Admin- istrator in connection with loans made by him. This shall in- clude authority to obtain deficiency judgments or otherwise in the case of mortgages assigned to the Administrator. Section 3709 of the Revised Statutes, as amended (41 U.S.C., sec 5), shall not be construed to apply to any contract of hazard insur-
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8 So in law. Probably should read ‘‘Provided,’’.
ance or to any purchase or contract for services or supplies on account of property obtained by the Administrator as a result of loans made under this Act if the premium therefor or the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Administrator deeds of con- veyance, deeds of release, assignments and satisfactions of mortgages and any other written instrument relating to real property or any interest therein acquired by the Administrator pursuant to the provisions of this Act may be exercised by the Administrator or by any officer or agent appointed by him without the execution of any express delegation of power or power of attorney. Nothing in this section shall be construed to prevent the Administrator form delegating such power by order or by power of attorney, in his discretion, to any officer or agent he may appoint;
(5) acquire, in any lawful manner, any property (real, per- sonal, or mixed, tangible or intangible), whenever deemed nec- essary or appropriate to the conduct of the activities authorized in sections 7(a) and 7(b);
(6) make such rules and regulations as he deems necessary to carry out the authority vested in him by or pursuant to this Act;
(7) in addition to any powers, functions, privileges and im- munities otherwise vested in him, take any and all actions (in- cluding the procurement of the services of attorneys by con- tract in any office where an attorney or attorneys are not or cannot be economically employed full time to render such serv- ices) when he determines such actions are necessary or desir- able in making, servicing, compromising, modifying, liqui- dating, or otherwise dealing with or realizing on loans made under the provisions of this Act: Provided 8, That with respect to deferred participation loans, the Administrator may, in the discretion of and pursuant to regulations promulgated by the Administrator, authorize participating lending institutions to take actions relating to loan servicing on behalf of the Admin- istrator, including determining eligibility and creditworthiness and loan monitoring, collection, and liquidation.
(8) pay the transportation expenses and per diem in lieu of subsistence expenses, in accordance with the Travel Expense Act of 1949, for travel of any person employed by the Adminis- tration to render temporary services not in excess of six months in connection with any disaster referred to in section 7(b) from place of appointment to, and while at, the disaster area and any other temporary posts of duty and return upon completion of the assignment: Provided, That the Adminis- trator may extend the six-month limitation for an additional six months if the Administrator determines the extension is necessary to continue efficient disaster loan making activities;
(9) accept the service and facilities of Federal, State, and local agencies and groups, both public and private, and utilize such gratuitous services and facilities as may, from time to time, be necessary, to further the objectives of section 7(b);
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(10) upon purchase by the Administration of any deferred participation entered into under section 7 of this Act, continue to charge a rate of interest not to exceed that initially charged by the participating institution on the amount so purchased for the remaining term of the indebtedness;
(11) make sure such investigations as he deems necessary to determine whether a recipient of or participant in any as- sistance under this Act or any other person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this Act, or of any rule or regulation under this Act, or of any order issued under this Act. The Administration shall permit any person to file with it a statement in writing, under oath or otherwise as the Administration shall determine, as to all the facts and cir- cumstances concerning the matter to be investigated. For the purpose of any investigation, the Administration is empowered to administer oaths and affirmations, subpena witnesses, com- pel their attendance, take evidence, and require the production of any books, papers, and documents which are relevant to the inquiry. Such attendance of witnesses and the production of any such records may be required from any place in the United States. In case of contumacy by, or refusal to obey a subpena issued to, any person, including a recipient or participant, the Administration may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or car- ries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, and documents; and such court may issue an order requiring such person to ap- pear before the Administration, there to produce records, if so ordered, or to give testimony touching the matter under inves- tigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof. All process in any such case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found;
(12) impose, retain, and use only those fees which are spe- cifically authorized by law or which are in effect on September 30, 1994, and in the amounts and at the rates in effect on such date, except that the Administrator may, subject to approval in appropriations Acts, impose, retain, and utilize, additional fees—
(A) not to exceed $100 for each loan servicing action (other than a loan assumption) requested after disburse- ment of the loan, including any substitution of collateral, release or substitution of a guarantor, reamortization, or similar action;
(B) not to exceed $300 for loan assumptions; (C) not to exceed 1 percent of the amount of requested
financings under title III of the Small Business Investment Act of 1958 for which the applicant requests a commitment from the Administration for funding during the following year; and
(D) to recover the direct, incremental cost involved in the production and dissemination of compilations of infor-
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mation produced by the Administration under the author- ity of this Act and the Small Business Investment Act of 1958; (13) collect, retain and utilize, subject to approval in appro-
priations Acts, any amounts collected by fiscal transfer agents and not used by such agent as payment of the cost of loan pool- ing or debenture servicing operations, except that amounts col- lected under this paragraph and paragraph (12) shall be uti- lized solely to facilitate the administration of the program that generated the excess amounts; and
(14) require any lender authorized to make loans under section 7 of this Act to pay examination and review fees, which shall be deposited in the account for salaries and expenses of the Administration, and shall be available for the costs of ex- aminations, reviews, and other lender oversight activities. (c) To such extent as he finds necessary to carry out the provi-
sions of this Act, the Administrator is authorized to procure the temporary (not in excess of one year) or intermittent services of ex- perts or consultants or organizations thereof, including steno- graphic reporting services, by contract or appointment, and in such cases such services shall be without regard to the civil-service and classification laws and, except in the case of stenographic reporting services by organizations, without regard to the civil-service and classification laws and, except in the case of stenographic reporting services by organizations, without regard to section 3709 of the Re- vised Statutes, as amended (41 U.S.C., sec. 5). Any individual so employed may be compensated at a rate not in excess of the daily equivalent of the highest rate payable under section 5332 of title 5, United States Code, including traveltime, and, while such indi- vidual is away from his or her home or regular place of business, he or she may be allowed travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5, United States Code.
(d) Section 3648 of the Revised Statutes (31 U.S.C. 529) shall not apply to prepayments of rentals made by the Administration on safety deposit boxes used by the Administration for the safe- guarding of instruments held as security for loans or for the safe- guarding of other documents.
(e)(1) Subject to the requirements and conditions contained in this subsection, upon application by a small business concern which is the recipient of a loan made under this Act, the Adminis- tration may undertake the small business concern’s obligation to make the required payments under such loan or may suspend such obligation if the loan was a direct loan made by the Administra- tion. While such payments are being made by the Administration pursuant to the undertaking of such obligation or while such obli- gation is suspended, no such payment with respect to the loan may be required from the small business concern.
(2) The Administration may undertake or suspend for a period of not to exceed 5 years any small business concern’s obligation under this subsection only if—
(A) without such undertaking or suspension of the obliga- tion, the small business concern would, in the sole discretion of the Administration, become insolvent or remain insolvent;
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(B) with the undertaking or suspension of the obligation, the small business concern would, in the sole discretion of the Administration, become or remain a viable small business enti- ty; and
(C) the small business concern executes an agreement in writing satisfactory to the Administration as provided by para- graph (4). (3) Notwithstanding the provisions of sections 7(a)(4)(C) and
7(i)(1) of this Act, the Administration may extend the maturity of any loan on which the Administration undertakes or suspends the obligation pursuant to this subsection for a corresponding period of time.
(4)(A) Prior to the undertaking or suspension by the Adminis- tration of any small business concern’s obligation under this sub- section, the Administration, consistent with the purposes sought to be achieved herein, small require the small business concern to agree in writing to repay to it the aggregate amount of the pay- ments which were required under the loan during the period for which such obligation was undertaken or suspended, either—
(i) by periodic payments not less in amount or less fre- quently falling due than those which were due under the loan during such period, or
(ii) pursuant to a repayment schedule agreed upon by the Administration and the small business concern, or
(iii) by a combination of the payments described in clause (i) and clause (ii). (B) In addition to requiring the small business concern to exe-
cute the agreement described in subparagraph (A), the Administra- tion shall, prior to the undertaking or suspension of the obligation, take such action, and require the small business concern to take such action as the Administration deems appropriate in the cir- cumstances, including the provision of such security as the Admin- istration deems necessary or appropriate to insure that the rights and interests of the lender (Small Business Administration or par- ticipant) will be safeguarded adequately during and after the pe- riod in which such obligation is so undertaken or suspended.
(f)(1) The guaranteed portion of any loan made pursuant to this Act may be sold by the lender, and by any subsequent holder, consistent with regulations on such sales as the Administration shall establish, subject to the following limitations:
(A) prior to the Administration’s approval of the sale, or upon any subsequent resale, of any loan guaranteed by the Ad- ministration, if the lender certifies that such loan has been property closed and that the lender has substantially complied with the provisions of the guarantee agreement and the regula- tions of the Administration, the Administration shall review and approve only materials not previously approved;
(B) all fees due the Administration on a guaranteed loan shall have been paid in full prior to any sale; and
(C) each loan, except each loan made under section 7(a)(14), shall have been fully disbursed to the borrower prior to any sale. (2) After a loan is sold in the secondary market, the lender
shall remain obligated under its guarantee agreement with the Ad-
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9 Section 7 of the Small Business Guaranteed Credit Enhancement Act of 1993, Public Law 103–81, 107 Stat. 782, repeals section 3 of such Act, which amended this paragraph, effective September 30, 1996. The repeal probably should have included a provision to amend the text of this paragraph on the effective date so as to read as it did before the date of enactment. With- out this provision, however, the repeal does not repeal the amendment. Indentation so in law.
ministration, and shall continue to service the loan in a manner consistent with the terms and conditions of such agreement.
(3) The Administration shall develop such procedures as are necessary for the facilitation, administration, and promotion of sec- ondary market operations, and for assessing the increase of small business access to capital at reasonable rates and terms as a result of secondary market operations. Beginning on March 31, 1997, the sale of the unguaranteed portion of any loan made under section 7(a) shall not be permitted until a final regulation that applies uni- formly to both depository institutions and other lenders is promul- gated by the Administration setting forth the terms and conditions under which such sales can be permitted, including maintenance of appropriate reserve requirements and other safeguards to protect the safety and soundness of the program.
(4) Nothing in this subsection or subsection (g) of this section shall be interpreted to impede or extinguish the right of the bor- rower or the successor in interest to such borrower to prepay (in whole or in part) any loan made pursuant to section 7(a) of this Act, the guaranteed portion of which may be included in such trust or pool, or to impede or extinguish the rights of any party pursuant to section 7(a)(6)(C) or subsection (e) of this section.
(g)(1) The Administration is authorized to issue trust certifi- cates representing ownership of all or a fractional part of the guar- anteed portion of one or more loans which have been guaranteed by the Administration under this Act, or under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 660): Provided, That such trust certificates shall be based on and backed by a trust or pool approved by the Administration and composed solely of the entire guaranteed portion of such loans.
(2) The Administration is authorized, upon such terms and conditions as are deemed appropriate, to guarantee the timely pay- ment of the principal of and interest on trust certificates issued by the Administration or its agent for purposes of this subsection. Such guarantee shall be limited to the extent of principal and in- terest on the guaranteed portions of loans which compose the trust or pool. In the event that a loan in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid loan represents in the trust or pool. Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Administra- tion only through the date of payment on the guarantee. During the term of the trust default of all loans constituting the pool.
(3) The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee of such trust certificates issued by the Admin- istration or its agent pursuant to this subsection.
(4)(A) 9 The Administration may collect a fee for any loan guarantee sold into the secondary market under subsection (f)
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Section 4(b) of the Small Business Lending Enhancement Act of 1995, Public Law 104–36, 109 Stat. 297, subsequently amends this paragraph.
10 Indentation so in law. See section 3(1) of Public Law 108–306 (118 Stat. 1131).
in an amount equal to not more than 50 percent of the portion of the sale price that exceeds 110 percent of the outstanding principal amount of the portion of the loan guaranteed by the Administration. Any such fee imposed by the Administration shall be collected by the Administration or by the agent which carries out on behalf of the Administration the central registra- tion functions required by subsection (h) of this section and shall be paid to the Administration and used solely to reduce the subsidy on loans guaranteed under section 7(a) of this Act: Provided, That such fee shall not be charged to the borrower whose loan is guaranteed: and, Provided further, That nothing herein shall preclude any agent of the Administration from col- lecting a fee approved by the Administration for the functions described in subsection (h)(2).
(B) The Administration is authorized to impose and collect, either directly or through a fiscal and transfer agent, a reason- able penalty on late payments of the fee authorized under sub- paragraph (A) in an amount not to exceed 5 percent of such fee per month plus interest.
(C) 10 The Administration may contract with an agent to carry out, on behalf of the Administration, the assess- ment and collection of the annual fee established under section 7(a)(23). The agent may receive, as compensation for services, any interest earned on the fee while in the control of the agent before the time at which the agent is contractually required to remit the fee to the Administra- tion.
(5)(A) In the event the Administration pays a claim under a guarantee issued under this subsection, it shall be subrogated fully to the rights satisfied by such payment.
(B) No State or local law, and no Federal law, shall preclude or limit the exercise by the Administration of its ownership rights in the portions of loans constituting the trust or pool against which the trust certificates are issued.
(6) If the amount of the guaranteed portion of any loan under section 7(a) is more than $500,000, the Administrator shall, upon request of a pool assembler, divide the loan guarantee into incre- ments of $500,000 and 1 increment of any remaining amount less than $500,000, in order to permit the maximum amount of any loan in a pool to be not more than $500,000. Only 1 increment of any loan guarantee divided under this paragraph may be included in the same pool. Increments of loan guarantees to different bor- rowers that are divided under this paragraph may be included in the same pool.
(h)(1) Upon the adoption of final rules and regulations, the Ad- ministration shall—
(A) provide for a central registration of all loans and trust certificates sold pursuant to subsections (f) and (g) of this section;
(B) contract with an agent to carry out on behalf of the Administration the central registration functions of this
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section and the issuance of trust certificates to facilitate pooling. Such agent shall provide a fidelity bond or insur- ance in such amounts as the Administration determines to be necessary to fully protect the interest of the Govern- ment;
(C) prior to any sale, require the seller to disclose to a purchaser of the guaranteed portion of a loan guaranteed under this Act and to the purchaser of a trust certificate issued pursuant to subsection (g), information on the terms, conditions, and yield of such instrument. As used in this paragraph, if the instrument being sold is a loan, the term ‘‘seller’’ does not include (A) an entity which made the loan or (B) any individual or entity which sells three or fewer guaranteed loans per year; and
(D) have the authority to regulate brokers and dealers in guaranteed loans and trust certificates sold pursuant to subsection (f) and (g) of this section. (2) The agent described in paragraph (1)(B) may be com-
pensated through any of the fees assessed under this section and any interest earned on any funds collected by the agent while such funds are in the control of the agent and before the time at which the agent is contractually required to transfer such funds to the Administration or to the holders of the trust certificates, as appropriate.
(3) Nothing in this subsection shall prohibit the utilization of a book-entry or other electronic form of registration for trust certificates. The Administration may, with the consent of the Secretary of the Treasury, use the book-entry system of the Federal Reserve System. SEC. 6. ø15 U.S.C. 635¿ (a) All moneys of the Administration
not otherwise employed may be deposited with the Treasury of the United States subject to check by authority of the Administration. The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for the Administration in the general performance of its powers conferred by this Act. Any banks insured by the Federal Deposit Insurance Corporation, when designated by the Secretary of the Treasury, shall act as custodians and financial agents for the Administration. Each Federal Reserve bank, when designated by the Administration as fiscal agents for the Administration, shall be entitled to be reimbursed for all ex- penses incurred as such fiscal agent.
(b) The Administrator shall contribute to the employees’ com- pensation fund, on the basis of annual billings as determined by the Secretary of Labor, for the benefit payments made from such fund on account of employees engaged in carrying out functions fi- nanced by the revolving fund established by section 4(c) of this Act. The annual billings shall also include a statement of the fair por- tion of the cost of the administration of such fund, which shall be paid by the Administrator into the Treasury as miscellaneous re- ceipts.
SEC. 7. ø15 U.S.C. 636¿ (a) LOANS TO SMALL BUSINESS CON- CERNS; 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
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11 Section 202 of the Small Business Loan Improvement Act of 2000 (114 Stat. 2763A-679), as enacted into law by section 1(a)(9) of P.L. 106–554, amended ‘‘paragraph (i)’’ and ‘‘paragraph (ii)’’. The amendments were carried out in clauses (i) and (ii) in order to reflect the probable intent of Congress.
12 See footnote on previous page.
to make loans for plant acquisition, construction, conversion, or ex- pansion, 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 ei- ther directly or in cooperation with banks or other financial institu- tions through agreements to participate on an immediate or de- ferred (guaranteed) basis. These powers shall be subject, however, to the following restrictions, limitations, and provisions:
(1) IN GENERAL.— (A) 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 par- ticipation is not available; and no direct financing may be made unless it is shown that a participation is not avail- able.
(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 Admin- istrator 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. (2) LEVEL OF PARTICIPATION IN GUARANTEED LOANS.—
(A) IN GENERAL.—Except as provided in subpara- graphs (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) 11 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) 12 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 speci- fied by subparagraph (A) for any loan under this sub- section may be reduced upon the request of the par- ticipating lender.
(ii) PROHIBITION.—The Administration shall not use the guarantee percentage requested by a partici- pating lender under clause (i) as a criterion for estab- lishing priorities in approving loan guarantee requests under this subsection. (C) INTEREST RATE UNDER PREFERRED LENDERS PRO-
GRAM.—
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(i) IN GENERAL.—The maximum interest rate for a loan guaranteed under the Preferred Lenders Program shall not exceed the maximum interest rate, as deter- mined 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 Lend- er Program of the Export-Import Bank of the United States (or any successor to the Program) shall be eligi- ble 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 be- tween 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 Admin- istration; and
(II) complete authority to service and liq- uidate such loans without obtaining the prior spe- cific 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 participa- tion 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 Administra- tion 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 busi- ness 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 subpara- graph (B);
(B) if the total amount outstanding and committed (on a deferred basis) solely for the purposes provided in para- graph (16) to the borrower from the business loan and in- vestment 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 sec- tion 7(a)(14) for export purposes; and
(C) if effected either directly or in cooperation with banks or other lending institutions through agreements to
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participate on an immediate basis if the amount would ex- ceed $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 pre- scribed by the Administration, and the rate of interest for the Administration’s share of any direct or immediate par- ticipation 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 insti-
tution 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 ear- liest 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 cal- culated 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 cal-
endar year is more than 25 percent of the out- standing 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—
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13 See amendments made by sections 1902 and 1910 of Public Law 97–35 (95 Stat. 767 and 778).
14 The reference in the continuation text for paragraph (6) to ‘‘this subparagraph’’ probably should be to ‘‘this paragraph’’.
(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 there- of 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 ex- panding 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 organiza- tion 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 sta- tus of the business concern: Provided further, That such status need not be as sound as that required for general loans under this subsection; and 13
On that portion of the loan used to refinance existing indebted- ness held by a bank or other lending institution, the Adminis- tration shall limit the amount of deferred participation to 80 per centum of the amount of the loan at the time of disburse- ment: Provided further, That any authority conferred by this subparagraph 14 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 prin- cipal of such loans for a grace period and use such other meth- ods as it deems necessary and appropriate to assure the suc- cessful establishment and operation of such concern.
(8) The Administration may make loans under this sub- section to small business concerns owned and controlled by dis- abled veterans (as defined in section 4211(3) of title 38, United States Code).
(9) The Administration may provide loans under this sub- section to finance residential or commercial construction or re-
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15 So in law. Probably should be ‘‘(B)’’. Section 111(c)(2) of Public Law 100–590 added this ‘‘new subparagraph’’, but in the subparagraph designation probably should be capitalized, and indention probably should be moved two ems to right.
habilitation 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 organiza- tion for the handicapped or to assist any handicapped indi- vidual, including service-disabled veterans, in establishing, ac- quiring, or operating a small business concern.
(11) The Administration may provide loans under this sub- section to any small business concern, or to any qualified per- son 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-in- come 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 engi- neer, manufacture, distribute, market, install, or service en- ergy measures: Provided, however, That such loan proceeds shall not be used primarily for research and development. (b) 15 The Administration may provide deferred participation
loans under this subsection to finance the planning, design, or in- stallation of pollution control facilities for the purposes set forth in section 404 of the Small Business Investment Act of 1958. Notwith- standing the limitation expressed in paragraph (3) of this sub- section, a loan made under this paragraph may not result in a total amount outstanding and committed to a borrower from the busi- ness 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 ex-
tensions 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 partici- pating lending institution may establish the rate of inter- est 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 para-
graph, the Administrator shall collect the fee as- sessed under paragraph (23) not more frequently than once each year.
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(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 guar- antee 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 aggres- sively market its export financing program to small busi- nesses. (15)(A) The Administration may guarantee loans under
this subsection to qualified employee trusts with respect to a small business concern for the purpose of 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.
(B) The plan requiring the Administrator’s approval under subparagraph (A) shall be submitted to the Administration by the trustee of such trust 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 con- cern and which provides that—
(i) not later than the date the loan guaranteed under subparagraph (A) is repaid (or as soon thereafter as is con- sistent with the requirements of section 401(a) of the In- ternal Revenue Code of 1954), at least 51 per centum of the total stock of such concern shall be allocated to the ac- counts 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 ac- counts stock is allocated, and
(iii) there will be adequate management to assure management expertise and continuity. (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 con- sidered.
(D) For purposes of this paragraph, a corporation which is controlled by any other person shall be treated as a small busi- ness concern if such corporation would, after the plan de- scribed in subparagraph (B) is carried out, be treated as a small business concern.
(E) The Administration shall compile a separate list of ap- plications 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 em- ployee-owned firms assisted by the Administration.
(16) INTERNATIONAL TRADE.—
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(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 ad- versely affected by international trade to improve its com- petitive 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 con- ditions, including any debt that qualifies for refi- nancing 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 prop- erty or equipment financed by the loan or on other as- sets 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 deter- mines the lien provides adequate assurance of the pay- ment 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 exist- ing 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 deter- mined by the Administrator, the small business concern—
(i) is confronting increased competition with for- eign 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 Adminis-
trator 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 Administra- tion under—
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(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 institu- tions and other entities in addition to banks to make loans au- thorized under this subsection.
(18) GUARANTEE FEES.— (A) IN GENERAL.—With respect to each loan guaran-
teed under this subsection (other than a loan that is repay- able 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 partici-
pating 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 au-
thorized 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 reg- ulations 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 ex- perience of the lender is excessive as compared to other lend- ers, but such suspension or revocation shall not affect any out- standing guarantee.
(B) In order to encourage all lending institutions and other entities making loans authorized under this subsection to pro- vide loans of $50,000 or less in guarantees to eligible small business loan applicants, the Administration shall develop and
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16 So in law. Probably should be ‘‘AUTHORITY TO LIQUIDATE LOANS’’. 17 So in law. Probably should be ‘‘AUTOMATIC APPROVAL’’. 18 So in original. Probably should be ‘‘ensure’’.
allow participating lenders to solely utilize a uniform and sim- plified loan form for such loans.
(C) Authority to liquidate loans 16.— (i) IN GENERAL.—The Administrator may permit
lenders participating in the Certified Lenders Program to liquidate loans made with a guarantee from the Ad- ministration pursuant to a liquidation plan approved by the Administrator.
(ii) Automatic approval 17.—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 rou- tine liquidation activity under such a plan, within 5 business days) such request shall be deemed to be ap- proved.
(20)(A) The Administration is empowered to make loans ei- ther directly or in cooperation with banks or other financial in- stitutions through agreements to participate on an immediate or deferred (guaranteed) basis to small business concerns eligi- ble for assistance under subsection (j)(10) and section 8(a). Such assistance may be provided only if the Administration de- termines 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 rea- sonable period of time;
(iii) the proceeds of such assistance will be used within a reasonable time for plant construction, conversion, or ex- pansion, 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 arti- cles, equipment, supplies, or material for defense or civil- ian production or as may be necessary to insure 18 a well- balanced national economy; and
(iv) such assistance is of such sound value as reason- ably 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, participa- tion by the Administration shall be not less than 85 per cen- tum 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:
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19 So in law. All of section 7(a)(21) indentions probably should be moved two ems to right.
(I) No immediate participation may be purchased un- less it is shown that a deferred participation is not avail- able.
(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 imme-
diate participation loan made pursuant to this paragraph shall be any secured debt instrument—
(i) that is subordinated by its terms to all other bor- rowings 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 cen- tum;
(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 annu- ally.
(21)(A) 19 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 rea- sonably be expected to be) detrimentally affected by—
(I) the closure (or substantial reduction) of a Depart- ment of Defense installation; or
(II) the termination (or substantial reduction) of a De- partment of Defense program on which such small busi- ness was a prime contractor or subcontractor (or supplier) at any tier; or (ii) to a qualified individual or a veteran seeking to estab-
lish (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 regard- ing the sound value of the proposed loan in accordance with para- graph (6).
(C) Loans pursuant to this paragraph shall be authorized in such 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 pursu- ant to a program providing bonuses or other inducements to encourage voluntary separation or early retirement;
(ii) a civilian employee of the Department of Defense invol- untarily separated from Federal service or retired pursuant to
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20 Margin so in law.
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 termi- nated pursuant to a program offering inducements to encour- age voluntary separation or early retirement) due to the termi- nation (or substantial reduction) of a Department of Defense program.
(E) 20 JOB CREATION AND COMMUNITY BENEFIT.—In providing assistance under this paragraph, the Adminis- tration shall develop procedures to ensure, to the max- imum 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 re- ductions in Federal defense expenditures; or
(II) preventing the loss of jobs by employees of small business concerns described in subpara- graph (A)(i); and (ii) have substantial potential for stimulating new
economic activity in communities most affected by re- ductions in Federal defense expenditures.
(22) The Administration is authorized to permit partici- pating 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 pay- ment per month plus interest.
(23) YEARLY FEE.— (A) IN GENERAL.—With respect to each loan approved
under this subsection, the Administration shall assess, col- lect, 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 Fed- eral Credit Reform Act of 1990 (2 U.S.C. 661a).
(B) PAYER.—The yearly fee assessed under subpara- graph (A) shall be payable by the participating lender and shall not be charged to the borrower.
(C) LOWERING OF BORROWER FEES.—If the Administra- tion 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)
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21 So in original. Probably should read ‘‘paragraph’’. 22 Paragraph (27) was repealed.
through (iii) of paragraph (18)(A), to the maximum ex- tent 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 affect- ing 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 Octo- ber 1, 1996.
(B) PILOT PROGRAM DEFINED.—In this paragraph, the term ‘‘pilot program’’ means any lending program initia- tive, project, innovation, or other activity not specifically authorized by law.
(C) LOW DOCUMENTATION LOAN PROGRAM.—The Ad- ministrator may carry out the low documentation loan pro- gram 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 21, the Administrator shall promulgate regulations defining the experience necessary for participa- tion 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) 22 LEASING.—In addition to such other lease arrange- ments 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 perma- nently occupies and uses not less than 60 percent of the total business space in the property.
(29) REAL ESTATE APPRAISALS.—With respect to a loan under this subsection that is secured by commercial real prop- erty, an appraisal of such property by a State licensed or cer- tified appraiser—
(A) shall be required by the Administration in connec- tion with any such loan for more than $250,000; or
(B) may be required by the Administration or the lend- er in connection with any such loan for $250,000 or less,
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23 Effective September 27, 2011, section 1135(b) of Public Law 111–240 provides for an amend- ment to section 7(a)(31)(D) to strike ‘‘$1,000,000’’ and insert ‘‘$350,000’’.
if such appraisal is necessary for appropriate evaluation of creditworthiness. (30) OWNERSHIP REQUIREMENTS.—Ownership requirements
to determine the eligibility of a small business concern that ap- plies 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 commu- nity property laws of a State for purposes of determining mar- ital interests.
(31) EXPRESS LOANS.— (A) DEFINITIONS.—As used in this paragraph:
(i) The term ‘‘express lender’’ means any lender authorized by the Administration to participate in the Express Loan Program.
(ii) 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 anal- yses, procedures, and documentation.
(iii) The term ‘‘Express Loan Program’’ means the program for express loans established by the Adminis- tration 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 Administra- tion. 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 ex- press lender shall retain such designation unless the Ad- ministration determines that the express lender has vio- lated the law or regulations promulgated by the Adminis- tration or modifies the requirements to be an express lend- er and the lender no longer satisfies those requirements.
(D) MAXIMUM LOAN AMOUNT.—The maximum loan amount under the Express Loan Program is $1,000,000 23.
(E) OPTION TO PARTICIPATE.—Except as otherwise pro- vided 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 EN- ERGY 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—
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(AA) agricultural crops; (BB) trees grown for energy produc-
tion; (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 recy- cled; 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 bio- diesel), 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. (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 pur-
chase energy efficient designs, equipment, or fix- tures, or to reduce the energy consumption of the borrower by 10 percent or more; and (iii) the term ‘‘pilot program’’ means the pilot pro-
gram established under subparagraph (B) (B) ESTABLISHMENT.—The Administrator shall estab-
lish and carry out a pilot program under which the Admin- istrator 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.
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(D) MAXIMUM PARTICIPATION.—A covered energy effi- ciency 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 effi-
ciency loan shall be equal to 50 percent of the fee oth- erwise 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 effi- ciency 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 author- ity 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 Ad- ministrator—
(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 Comp- troller General of the United States shall submit to the Committee on Small Business of the House of Rep- resentatives 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 sav- ings with the pilot program;
(III) a description of the impact of the pilot program on the program under this subsection;
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(IV) an evaluation of the efficacy and poten- tial 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 pro- gram 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 estab-
lish and carry out a pilot program under which the Admin- istrator 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 sub- section.
(E) FEES.— (i) IN GENERAL.—The fee on a veteran participa-
tion loan shall be equal to 50 percent of the fee other- wise 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 partici- pation 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 author- ity 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 Ad- ministrator—
(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
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24 Effective on September 30, 2013, section 1133(b) of Public Law 111–240 provides for amend- ments striking pargraph (34) of section 7(a) and redesignating paragraph (35) as paragraph (34).
(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 pro- gram. (F) GAO REPORT.—
(i) IN GENERAL.—Not later than 1 year after the date that the pilot program terminates, the Comp- troller General of the United States shall submit to the Committee on Small Business of the House of Rep- resentatives 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 pro- gram;
(II) a description of the impact of the pilot program on the program under this subsection;
(III) an evaluation of the efficacy and poten- tial fraud and abuse of the pilot program; and
(IV) recommendations for improving the pilot program.
(34) 24 FLOOR PLAN FINANCING PROGRAM.— (A) DEFINITION.—In this paragraph, the term ‘‘eligible
retail good’’— (i) means a good for which a title may be obtained
under State law; and (ii) includes an automobile, recreational vehicle,
boat, and manufactured home. (B) PROGRAM.—The Administrator may guarantee the
timely payment of an open-end extension of credit to a small business concern, the proceeds of which may be used for the purchase of eligible retail goods for resale.
(C) AMOUNT.—An open-end extension of credit guaran- teed under this paragraph shall be in an amount not less than $500,000 and not more than $5,000,000.
(D) TERM.—An open-end extension of credit guaran- teed under this paragraph shall have a term of not more than 5 years.
(E) GUARANTEE PERCENTAGE.—The Administrator may guarantee—
(i) not less than 60 percent of an open-end exten- sion of credit under this paragraph; and
(ii) not more than 75 percent of an open-end ex- tension of credit under this paragraph.
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25 Effective on September 30, 2013, section 1133(b) of Public Law 111–240 provides for amend- ments striking pargraph (34) of section 7(a) and redesignating paragraph (35) as paragraph (34).
(F) ADVANCE RATE.—The lender for an open-end exten- sion of credit guaranteed under this paragraph may allow the borrower to draw funds on the line of credit in an amount equal to not more than 100 percent of the value of the eligible retail goods to be purchased. (35) 25 EXPORT EXPRESS PROGRAM.—
(A) DEFINITIONS.—In this paragraph— (i) the term ‘‘export development activity’’ in-
cludes— (I) obtaining a standby letter of credit when
required as a bid bond, performance bond, or ad- vance payment guarantee;
(II) participation in a trade show that takes place outside the United States;
(III) translation of product brochures or cata- logues for use in markets outside the United States;
(IV) obtaining a general line of credit for ex- port 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 manage- ment company, to develop a market outside the United States; and
(IX) acquiring, constructing, renovating, mod- ernizing, improving, or expanding a production fa- cility 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 ap- plication. (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 guar- antee—
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(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.
(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 appropria- tion 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 appro- priate to repair, rehabilitate or replace property, real or per- sonal, 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 com- pensated 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, but not limited to, construction of retaining walls and sea walls, grading and contouring land, relocating utilities and modifying structures;
(B) to refinance any mortgage or other lien against a to- tally destroyed or substantially damaged home or business con- cern: 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 re- paired, 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 di- rectly or in cooperation with banks or other lending institu- tions through agreements to participate on an immediate or deferred (guaranteed) basis), as the Administrator may deter- mine to be necessary or appropriate, to enable small busi- nesses to use mitigation techniques in support of a formal miti- gation program established by the Federal Emergency Manage- ment Agency, except that no loan or guarantee may be ex- tended to a small business under this subparagraph unless the Administration finds that the small business is otherwise un- able to obtain credit for the purposes described in this subpara- graph;
(2) to make sure 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 appro- priate to any small business concern, private nonprofit organi- zation, or small agricultural cooperative located in an area af- fected by a disaster, (including drought), with respect to both
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farm-related and nonfarm-related small business concerns, if the Administration determines that the concern, the organiza- tion, or the cooperative has suffered a substantial economic in- jury as a result of such disaster and if such disaster con- stitutes—
(A) a major disaster, as determined by the President under the Robert T. Stafford Disaster Relief and Emer- gency 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 pro- vided 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, pri- vate nonprofit organizations, or small agricultural coopera- tives (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 strick- en area. Not later than 30 days after the date of receipt of such certification by a Governor of a State, the Adminis- tration shall respond in writing to that Governor on its de- termination 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 pursu- ant 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 success- ful day-to-day operations of that small business concern;
(ii) the term ‘‘period of military conflict’’ has the mean- ing 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 in- ability 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 (ei- ther directly or in cooperation with banks or other lending in- stitutions through agreements to participate on an immediate or deferred basis) to assist a small business concern that has
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26 The word ‘‘have’’ probably should be ‘‘has’’. 27 Margins for subparagraphs (G) and (H) of paragraph (3) so in law.
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 para- graph during the period beginning on the date on which the es- sential employee is ordered to active duty and ending on the date that is 1 year after the date on which such essential em- ployee is discharged or released from active duty. The Adminis- trator may, when appropriate (as determined by the Adminis- trator), extend the ending date specified in the preceding sen- tence by not more than 1 year.
(D) Any loan or guarantee extended pursuant to this para- graph shall be made at the same interest rate as economic in- jury loans under paragraph (2).
(E) No loan may be made under this paragraph, either di- rectly or in cooperation with banks or other lending institu- tions 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 26 become due to changed economic circumstances, a major source of employ- ment in its surrounding area, as determined by the Adminis- tration, 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) 27 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) 27 The Administrator shall give priority to any ap-
plication 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 Adminis- trator, in consultation with the Administrator of the Fed- eral Emergency Management Agency, shall ensure, to the
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maximum extent practicable, that all application periods for disaster relief under this Act correspond with applica- tion 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 de- clares 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 as- sistance under this Act relating to that major disaster;
(ii) information regarding the number of loan ap- plications and disbursements processed by the Admin- istrator 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 appli- cants that have not submitted an application relating to that major disaster.
(5) PUBLIC AWARENESS OF DISASTERS.—If a disaster is de- clared under this subsection or the Administrator declares eli- gibility for additional disaster assistance under paragraph (9), the Administrator shall make every effort to communicate through radio, television, print, and web-based outlets, all rel- evant information needed by disaster loan applicants, includ- ing—
(A) the date of such declaration; (B) cities and towns within the area of such declara-
tion; (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 assist- ance websites, including links to websites providing infor- mation regarding assistance available from the Federal Emergency Management Agency;
(F) information on eligibility criteria for Administra- tion loan programs, including where such applications can be found; and
(G) application materials that clearly state the func- tion 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 con-
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tractor, as determined by the Administrator, to process loans under this subsection in the event of a major dis- aster (including any major disaster relating to which the Administrator declares eligibility for additional disaster assistance under paragraph (9)), under which the Adminis- trator shall pay the contractor a fee for each loan proc- essed.
(B) LOAN LOSS VERIFICATION SERVICES.—The Adminis- trator may enter into an agreement with a qualified lender or loss verification professional, as determined by the Ad- ministrator, to verify losses for loans under this subsection in the event of a major disaster (including any major dis- aster relating to which the Administrator declares eligi- bility 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 Ad- ministrator may, where practicable, ensure that the num- ber 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 Dis- aster Assistance or the Disaster Cadre of the Administra- tion 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 ap-
propriate by the Administrator, additional funds for additional employees; and
(iii) containing such additional information, as de- termined appropriate by the Administrator.
(8) INCREASED LOAN CAPS.— (A) AGGREGATE LOAN AMOUNTS.—Except as provided
in subparagraph (B), and notwithstanding any other provi- sion of law, the aggregate loan amount outstanding and committed to a borrower under this subsection may not ex- ceed $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.
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(9) DECLARATION OF ELIGIBILITY FOR ADDITIONAL DISASTER ASSISTANCE.—
(A) IN GENERAL.—If the President declares a major disaster, the Administrator may declare eligibility for addi- tional disaster assistance in accordance with this para- graph.
(B) THRESHOLD.—A major disaster for which the Ad- ministrator declares eligibility for additional disaster as- sistance under this paragraph shall—
(i) have resulted in extraordinary levels of casual- ties or damage or disruption severely affecting the population (including mass evacuations), infrastruc- ture, environment, economy, national morale, or gov- ernment functions in an area;
(ii) be comparable to the description of a cata- strophic 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 in- capable of providing adequate and timely assist- ance 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 AS- SISTANCE.—
(i) IN GENERAL.—If the Administrator declares eli- gibility for additional disaster assistance under this paragraph, the Administrator may make such loans under this subparagraph (either directly or in coopera- tion 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 deter-
mines that the average processing time for appli- cations 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 applica- tions is not more than 15 days.
(II) SUSPENSION OF APPLICATIONS FROM OUT- SIDE DISASTER AREA.—If the Administrator deter- mines that the average processing time for appli-
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cations for disaster loans under this subparagraph relating to a specific major disaster is more than 30 days, the Administrator shall suspend the proc- essing of such applications submitted by eligible small business concerns located outside the dis- aster area, until the Administrator determines that the average processing time for such applica- tions is not more than 15 days. (iii) LOAN TERMS.—A loan under this subpara-
graph 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 eco- nomic injury’’ means economic harm to a business con- cern that results in the inability of the business con- cern 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 con- cern 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 substan-
tial 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 busi- ness 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.
No loan under this subsection, including renewals and exten- sions thereof, may be made for a period or periods exceeding thirty years: Provided, That the Administrator may consent to a suspen- sion 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 bor- rower 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 dis- aster 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 fur- ther, That the provisions of paragraph (1) of subsection (d) of this
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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) here- of 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 para- graph (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 re- spect 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 para- graph. The principal amount of any loan made pursuant to para- graph (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 de- termines 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 dis- aster. 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 Rep- resentatives, and the Committee of the Senate and House of Rep- resentatives having jurisdiction over measures relating to energy conservation, a report on its activities under this paragraph, in- cluding therein an evaluation of the effect of such activities on en- couraging the installation of insulation in property which is re- paired or replaced after a disaster which is subject to this para- graph, and its recommendations with respect to the continuation, modification, or termination of such activities.
In the administration of the disaster loan program under para- graphs (1) and (2) of this subsection, in the case of property loss or damage or injury resulting from a major disaster as determined
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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 dam- age or injury is not compensated for by insurance or otherwise—
(A) may make any loan for repair, rehabilitation, or re- placement of property damaged or destroyed without regard to whether the required financial assistance is otherwise avail- able 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, rehabili- tated, or replaced, except that (1) in the case of a business con- cern, 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 refi- nancing;
(C) may, in the case of a loan made under clause (A) or a mortgage or other lien refinanced under clause (B) in connec- tion 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 suspen- sion 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 dam- age or injury and a bona fide estimate of cost of repair, reha- bilitation, 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 ex- ceed $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 out- standing on the date of enactment of this paragraph, the Adminis- trator 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 can-
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28 Section 109(d) of the Disaster Relief and Emergency Assistance Amendments of 1988, Public Law 100–707, 102 Stat. 4708, amended this paragraph by striking out ‘‘section 302(a) of the Disaster Relief Act of 1974’’ and inserting in lieu thereof ‘‘sections 402 and 502 of the Disaster Relief and Emergency Assistance Act’’. Reference to ‘‘Disaster Relief and Emergency Assistance Act’’ was so in original. In light of sec. 102(a) Public Law 100–707, probably should read ‘‘Robert T. Stafford Disaster Relief and Emergency Assistance Act’’.
29 So in law. Section 12078(c)(2)(B) of Public Law 110–246 amends ‘‘the undesignated matter at the end’’ at the end of subsection (b) by striking ‘‘, (2), or (4)’’ and inserting ‘‘(2)’’.
celed, 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 Emer- gency Assistance Act 28 to a disaster loan under paragraph (1) (2) 29 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 dis- aster 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 Ad- ministrator declares eligibility for additional disaster as- sistance 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 partici-
pating 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 pri-
vately-owned bank or other lending institution that— (i) is not a preferred lender; and (ii) the Administrator determines meets the cri-
teria 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 time- ly 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.
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(3) USE OF LOANS.—A loan guaranteed by the Adminis- trator under this subsection may be used for any purpose au- thorized under subsection (b).
(4) ONLINE APPLICATIONS.— (A) ESTABLISHMENT.—The Administrator may estab-
lish, 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 para- graph may be considered for any other Federal assistance program for disaster relief.
(C) CONSULTATION.—In establishing an online applica- tion process under this paragraph, the Administrator shall consult with appropriate persons from the public and pri- vate 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 sub-
section made to— (i) a qualified individual may be made by a pre-
ferred 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 oper- ating 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 partici- pating 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
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30 So in law. Section 7(c)(2) and (3) indentions probably should be moved two ems to left.
amount agreed upon in advance between the qualified pri- vate lender or preferred lender and the Administrator. (9) DOCUMENTATION.—A qualified private lender or pre-
ferred 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 pro- mulgated 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 Admin- istrator shall submit a report on the progress of the regu- lations 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 Rep- resentatives. (11) AUTHORIZATION OF APPROPRIATIONS.—
(A) IN GENERAL.—Amounts necessary to carry out this subsection shall be made available from amounts appro- priated to the Administration to carry out subsection (b).
(B) AUTHORITY TO REDUCE INTEREST RATES AND OTHER TERMS AND CONDITIONS.—Funds appropriated to the Ad- ministration 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 trans- ferred 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) 30 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 participa- tion 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)
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31 So in original. Probably should be preceded by ‘‘to’’. 32 Subparagraphs (A) and (B) of section 7(c)(3) should be moved 4 ems to the left. 33 So in original. Should be ‘‘source’’.
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 31 effective date of this Act, on the Ad- ministration’s share of loans made pursuant to paragraph (1) of subsection (b)—
(A) 32 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) 32 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 deter- mined by the Administration, but not in excess of 5 percent per annum; and (C) if the loan proceeds are to repair or replace prop-
erty damaged or destroyed and if the applicant is a busi- ness concern which is able to obtain sufficient credit else- where, the interest rate shall not exceed the current aver- age market yield on outstanding marketable obligations of the United States with remaining periods to maturity com- parable to the average maturities of such loans and ad- justed to the nearest one-eight of 1 percent, and an addi- tional 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 33 at reasonable rates and terms for loans of simi- lar 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 par- ticipate 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 employ- ment in an area suffering a disaster, in which case the Ad- ministration, 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 sub- section (b) shall be—
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34 So in law. All of section 7(d)(5) indentions probably should be moved two ems to left.
(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 Sec- retary of the Treasury taking into consideration the cur- rent average market yield on outstanding marketable obli- gations of the United States with remaining periods to ma- turity 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 ad- justed 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 com- parable to the average maturities of such loans plus an ad- ditional 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 de- ferred participation (guaranteed) loans under section 7(a) of this Act. Loans under this subparagraph shall be lim- ited to a maximum term of three years. (5) 34 Notwithstanding the provisions of any other law, the
interest rate on the Federal share of any loan made under sub- section (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 Sec- retary of the Treasury taking into consideration the cur- rent average market yield on outstanding marketable obli- gations of the United States with remaining periods to ma- turity 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 ad- justed 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 com-
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35 So in law. All of section 7(c)(6) indentions probably should be moved two ems to left.
parable to the average maturities of such loans plus an ad- ditional 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 organi- zation, or other concern, including agricultural coopera- tives, 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 pre- scribed 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 max- imum term of 7 years. (6) 35 Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by subpara- graphs (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 pursu- ant 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 institu- tions 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 ex- ceed $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 Adminis- tration, 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 es- tate to less than $100,000 for each disaster nor for any home- owner 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 Adminis- tration shall not require collateral for loans of $14,000 or less (or such higher amount as the Administrator determines ap- propriate in the event of a major disaster) which are made under paragraph (1) of subsection (b). 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 enact- ment of this paragraph and which was made on account of a dis- aster commencing on or after October 1, 1982, the Administrator
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36 So in law. No paragraph (2) was enacted into law by section 12068(a)(2) of Public Law 110– 246.
37 So in law. Section 7 has two subsections designated as subsections (e) and (f). See section 107(b) and (c) of division D of title I of Public Law 104–208, 110 Stat. 3009.
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, de- termined to be a disaster by the President, the Secretary of Agri- culture or the Administrator of the Small Business Administration.
(e) The Administration shall not fund any Small Business De- velopment Center or any variation thereof, except as authorized in section 21 of this Act.
(f) 36 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 sub- paragraph (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 re- quire the borrower to pay any non-amortized amount for the first five years after repayment begins.
(e) øRESERVED¿. 37 (f) øRESERVED¿. 37 (h)(1) The Administration also is empowered, where other fi-
nancial 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 imme- diate 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 handi- capped 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 re- ceives 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 participa-
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tion or otherwise) to the borrower from the business loan and in- vestment fund established by section 4(c)(1)(B) of this Act would exceed $350,000. In agreements to participate in loans on a de- ferred basis under this subsection, the Administration’s participa- tion 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 cen- tum 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 appli- cant.
(3) For purposes of this subsection, the term ‘‘handicapped in- dividual’’ 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 employ- ment for which the person would otherwise be qualified or qualifiable.
(i)(1) The Administration also is empowered to make, partici- pate (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 preserva- tion 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, how- ever, That no such loans shall be made, participated in, or guaran- teed if the total of such Federal assistance to a single borrower out- standing at any one time would exceed $100,000. The Administra- tion may defer payments on the principal of such loans for a grace period and use such other methods as it deems necessary and ap- propriate to assure the successful establishment and operation of such concern. The Administration may, in its discretion, as a condi- tion of such financial assistance, require that the borrower take steps to improve his management skills by participating in a man- agement training program approved by the Administration: Pro- vided, however, That any management training program so ap- proved must be of sufficient scope and duration to provide reason- able opportunity for the individuals served to develop entrepre- neurial 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 pri- vate lending activities to such concerns through the use of the loan guarantees, participations in loans, and pooling arrangements au- thorized 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 deter- mine necessary.
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(4) The Administration shall provide for the continuing evalua- tion 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 stimu- lated, and the results of such evaluation together with rec- ommendations shall be included in the report required by section 10(a) of this Act.
(5) Loans made pursuant to this subsection (including imme- diate participation in and guarantees of such loans) shall have such terms and conditions as the Administration shall determine, sub- ject 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 con- sideration 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 applica- ble 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 admin- istrative expenses and probable losses may be required on loan guarantees. (6) The Administration shall take such steps as may be nec-
essary 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 identi- fied by the Administration as having high concentrations of unem- ployed 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
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38 So in law. Probably should be ‘‘7(j)(10)’’ (Public Law 95–507, section 204, 92 Stat. 1963).
low-income individuals, to small businesses eligible to receive con- tracts 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 op- portunities;
(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) 38, and 8(a) of this Act;
(D) the establishment and strengthening of business serv- ice agencies, including trade associations and cooperative; and
(E) the furnishing of business counseling, management training, and legal and other related services, with special em- phasis 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 man- agement 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 sub-
contracts by businesses with small business concerns located in area of high concentration of unemployed or low-income individ- uals, with small businesses owned by low-income individuals, and with small businesses eligible to receive contracts pursuant to sec- tion 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 con- cerns 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 individ- uals and small business concerns served.
øParagraph (8) of section 7(j) repealed by Public Law 101– 574.¿
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39 So in law. Section 7(j)(10)(A)(i) indentions probably should be moved two ems to left. 40 So in original. The period should probably be a semicolon.
(9) The Administration shall take such steps as may be nec- essary 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 Govern- ment 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 busi- ness and capital ownership development program (hereinafter re- ferred to as the ‘‘Program’’) which shall provide assistance exclu- sively for small business concerns eligible to receive contracts pur- suant to section 8(a) of this Act. The program, and all other serv- ices 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 su- pervision of, and responsible to, the Administrator.
(A) The Program shall— (i) 39 assist small business concerns participating
in the Program (either through public or private orga- nizations) to develop and maintain comprehensive business plans which set forth the Program Partici- pant’s specific business targets, objectives, and goals developed and maintained in conformity with subpara- graph (D). 40 (ii) provide for such other nonfinancial services as
deemed necessary for the establishment, preservation, and growth of small business concerns participating in the Pro- gram, including but not limited to (I) loan packaging, (II) financing counseling, (III) accounting and bookkeeping as- sistance, (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 re- porting 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 fail- ure of small business concerns participating in the Pro- gram; and
(vi) provide assistance necessary to help small busi- ness concerns participating in the Program to procure sur- ety bonds, with such assistance including, but not limited to, (I) the preparation of application forms required to re- ceive 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.
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41 So in law. All of section 7(j)(10)(D)(i) indentions probably should be moved two ems to left.
(B) Small business concerns eligible to receive contracts pursuant to section 8(a) of this Act shall participate in the Pro- gram.
(C)(i) A small business concern participating in any pro- gram or activity conducted under the authority of this para- graph or eligible for the award of contracts pursuant to section 8(a) on September 1, 1988, shall be permitted continued par- ticipation and eligibility in such program or activity for a pe- riod 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 termi- nation or graduation pursuant to subparagraph (F) or (H) for issues unrelated to the expiration of any time period limita- tion.
(D)(i) 41 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 Oppor- tunity Specialist assigned to assist such Program Partici- pant. The Business Opportunity Specialist shall have a Level I Federal Acquisition Certification in Contracting (or any successor certification) or the equivalent Department of Defense certification, except that a Business Oppor- tunity Specialist serving at the time of the date of enact- ment of the National Defense Authorization Act for Fiscal Year 2013 may continue to serve as a Business Oppor- tunity Specialist for a period of 5 years beginning on that date of enactment without such a certification. The plan may be a revision of a preliminary business plan sub- mitted by the Program Participant or required by the Ad- ministration 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 cir- cumstances upon which the Administration determined eli- gibility pursuant to section 8(a)(6). Such plan, and subse- quent modifications submitted under clause (iii) of this subparagraph, shall be approved by the business oppor- tunity specialist prior to the Program Participant being eli- gible 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 op- erations during the term of program participation and after graduation.
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(II) An analysis of the Program Participant’s strengths and weaknesses with particular attention to correcting any financial, managerial, technical, or per- sonnel 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 dur- ing the next and succeeding years utilizing the results of the analyses conducted pursuant to subclauses (I) and (II).
(IV) A transition management plan outlining spe- cific steps to assure profitable business operations after graduation (to be incorporated into the Program Participant’s plan during the first year of the transi- tional stage of Program participation).
(V) Estimates of contract awards pursuant to sec- tion 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 Administra- tion for approval. The currently approved plan shall be considered valid until such time as a modified plan is ap- proved by the Business Opportunity Specialist. Annual re- views pertaining to years in the transitional stage of pro- gram participation shall require, as appropriate, a written verification that such Program Participant has complied with the requirements of subparagraph (I) relating to at- taining 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 dur- ing 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 activ- ity from sources other than contracts awarded pursu- ant to section 8(a),
(II) the types of contract opportunities being sought, identified by Standard Industrial Classifica- tion (SIC) Code or otherwise,
(III) an estimate of the dollar value of contract support to be sought on a competitive basis, and
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(IV) such other information as may be requested by the Business Opportunity Specialist to provide ef- fective business development assistance to the Pro- gram 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 de- nied 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 pro-
ceeding 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 ‘‘termi-
nated’’ 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 participa- tion in term. An action for termination shall be based upon good cause, including—
(i) the failure by such concern to maintain its eligi- bility 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 in- dicators, 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 re- quired 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 embezzle- ment, theft, forgery, bribery, falsification or violation of section 16. For purposes of this clause, no termination ac- tion 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 ac- quiesced 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 Ad- ministrator for Minority Small Business and Capital Owner- ship Development. Whenever the Associate Administrator, or a
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designee of such officer, determines such termination is appro- priate, within 15 days after making such a determination the Program Participant shall be provided a written notice of in- tent 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 Partici- pant is recognized as successfully completing the program by substantially achieving the targets, objectives, and goals con- tained 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 tar- gets.’’). Such efforts shall be made a part of the business plan and shall be sufficient in scope and duration to satisfy the Ad- ministration that the Program Participant will engage a rea- sonable marketing strategy that will maximize its potential to achieve its business activity targets.
(ii) During the transitional stage of the Program a Pro- gram Participant shall be subject to regulations regarding business activity targets that are promulgated by the Adminis- tration 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 suc- ceeding year of Program Participation; such targets, for such period of time, shall reflect a reasonably consistent increase in contracts awarded other than pursuant to sec- tion 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 sub- paragraph;
(II) require a Program Participant to attain its busi- ness activity targets;
(III) provide that, before the receipt of any contract to be awarded pursuant to section 8(a), the Program Partici- pant (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 re- medial measures as may have been ordered pursuant to regulations issued under subclause (V);
(IV) require the Administration to review each Pro- gram Participant’s performance regarding attainment of business activity targets during periodic reviews of such Participant’s business plan; and
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42 So in law. All of section 7(b)(11)(B) indentions probably should be moved two ems to left.
(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 reme- dial 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 infor- mation alleging that such Program Participant no longer meets the requirements for Program eligibility. Upon making a find- ing that a Program Participant is no longer eligible, the Ad- ministration shall initiate a termination proceeding in accord- ance 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 govern- ment, or any other business enterprise owned by the tribe, un- less the Administrator determines that one or more such trib- ally owned business concerns have obtained, or are likely to ob- tain, a substantial unfair competitive advantage within an in- dustry category.
(III) Any joint venture established under the authority of section 602(b) of Public Law 100–656, the ‘‘Business Oppor- tunity 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 Busi-
ness 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) 42 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 dis-
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advantage with respect to any other concern making appli- cation 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 eligi- ble 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 el- igible to receive contracts under this program, and
(II) the individuals responsible for the manage- ment and daily operations of the concern do not man- age 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 pro- gram 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 eco- nomically 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 Di- vision’’) 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 per- form 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 certifi- cation 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 com- plete 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 Cap- ital Ownership Development;
(iv) review and evaluate financial statements and other submissions from concerns participating in the program estab- lished by paragraph (10) to ascertain continued eligibility to re- ceive subcontracts pursuant to section 8(a);
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43 So in law. All of section 7(j)(11)(F)(vi) indentions probably should be moved two ems to left. 44 So in law. All of section 7(j)(11)(H) indentions probably should be moved two ems to left.
(v) make a request for the initiation of termination or graduation proceedings, as appropriate, to the Associate Ad- ministrator for Minority Small Business and Capital Owner- ship Development;
(vi) 43 make recommendations to the Associate Ad- ministrator for Minority Small Business and Capital Ownership Development concerning protests from ap- plicants 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 sub- section 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 pro-
gram 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 un- likely to procure the types of products or services offered by the concern; or
(ii) the purchases of such products or services by the Fed- eral 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) 44 Not later than 90 days after receipt of a com- pleted application for Program certification, the Associate Administrator for Minority Small Business and Capital Ownership Development shall certify a small business con- cern as a Program Participant or shall deny such applica- tion.
(I) Thirty days before the conclusion of each fiscal year, the Di- rector of the Division shall review all concerns that have been ad- mitted into the Program during the preceding 12-month period. The review shall ascertain the number of entrants, their geo- graphic 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 Spe- cialists, 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 Busi- ness and Capital Ownership Development by September 30 of each year. Based on such report and such additional data as may be rel- evant, the Associate Administrator shall, by October 31 of each year, issue policy and program directives applicable to such fiscal year that—
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45 So in original. Probably should be ‘‘(12)’’.
(i) establish priorities for the solicitation of program appli- cations from underrepresented regions and industry categories;
(ii) assign staffing levels and allocate other program re- sources 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 con- cerns owned and controlled by socially and economically dis- advantaged 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 Owner-
ship 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 finan- cial and managerial skills.
(C) The transitional stage of program participation shall be de- signed to overcome, insofar as practicable, the remaining elements of economic disadvantage and to prepare such concern for gradua- tion 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: 45
(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 con- tracts 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 construc- tion, 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 con- struction, alteration, or repair of said public buildings or public works’’, approved August 24, 1935 (49 Stat. 793), which exemp-
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46 Effective July 1, 2000, Section 405(f)(9) of Public Law 105–277 (112 Stat. 2681–449??) is amended as follows:
(9) SMALL BUSINESS ACT.—The fourth sentence of section 7(j)(13)(E) of the Small Business Act (15 U.S.C. 636(j)(13)(E)) is amended by striking ‘‘the Job Training Partnership Act or’’.
tions 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 un- able 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 In- vestment 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 Par- ticipant 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 employ- ees of such concerns. Such assistance may be made without re- gard to section 18(a). Assistance may be made by direct pay- ment to the training provider or by reimbursing the Program Participant or the Participant’s employee, if such reimburse- ment 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 the Job Training Partnership Act or 46 title I of the Workforce Investment Act of 1998. The Administration shall, in consultation with the Secretary of Labor, promulgate rules and regulations to implement this subparagraph that es- tablish acceptable training and upgrading performance stand- ards 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 subpara- graph unless the Administrator determines that—
(i) such concern has documented that it has first ex- plored the use of existing cost-free or cost-subsidized train- ing 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 employ- ees 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;
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(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 up- graded employee has provided a similar assurance to re- main 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 Ad- ministration together with such interest and costs of col- lection 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 pro- vider; and
(vii) such concern will maintain such records as the Administration deems appropriate to ensure that the pro- visions of this paragraph and any other applicable law have not been violated. (F) 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 Partici- pants 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 Govern- ment) during such concern’s term of participation in the Pro- gram and for one year thereafter.
(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 develop- ment 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, develop- ment, 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.
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(J) Program Participants in the developmental stage of Program participation shall be eligible for the assistance pro- vided 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 sub- paragraphs (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 develop- mental stage of Program Participation; and
(B) no more than five years may be spent in the transi- tional stage of Program Participation. (16)(A) The Administrator shall develop and implement a proc-
ess 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 participa- tion in the Program during the immediately preceding fiscal year. The Administrator shall also indicate the dollar distribu- tion of net worths, at $50,000 increments, of all such individ- uals found to be socially and economically disadvantaged. For the first report required pursuant to this paragraph the Ad- ministrator shall also provide the data specified in the pre- ceding 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 award- ed pursuant to section 8(a).
(iii) A compilation and evaluation of those business con- cerns 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 busi- ness operations, those that have ceased or substantially cur- tailed 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 Pro- gram, the Administrator shall also separately detail the bene- fits and costs that have accrued to the economy during the im- mediately 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 con-
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tracts received in the preceding year, the dollar amount of ad- vance payments received by each concern pursuant to contracts awarded under section 8(a), and a description including (if ap- propriate) an estimate of the dollar value of all benefits re- ceived 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 award- ed 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 con- sent 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 em- ploy 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, not- withstanding 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 Ex- penses 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 busi- ness, travel expenses (including per diem in lieu of subsistence) a authorized by section 5 of such Act (5 U.S.C. 73b–2) for per- sons in the Government service employed intermittently, while so employed: Provided, however, That contracts for such em- ployment 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—
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(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 develop- ment corporation;
(II) a consortium of private, nonprofit organi- zations or nonprofit community development cor- porations; and
(III) an agency of or nonprofit entity estab- lished 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 inter- mediaries, 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 Ad- ministrator may provide loans to eligible intermediaries to enable the eligible intermediaries to provide loans to start- up, newly established, and growing small business con- cerns 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 as- sisted;
(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 eco-
nomic, 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 out- standing and committed to the eligible intermediary by the Administrator would, as a result of such loan, exceed
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$1,000,000 during the participation of the eligible inter- mediary in the Program.
(C) LOAN DURATION.—Loans made by the Adminis- trator 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 Pro- gram shall bear an annual interest rate equal to 1.00 per- cent.
(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 sub- section.
(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 dur- ing 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 Adminis- trator 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 eligi-
ble intermediary, shall make loans to startup, newly estab- lished, and growing small business concerns for working capital, real estate, and the acquisition of materials, sup- plies, 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 eligi- ble intermediary in the application of the eligible inter- mediary for a loan under this subsection.
(D) REVIEW RESTRICTIONS.—The Administrator may not review individual loans made by an eligible inter- mediary 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 en- trepreneurs and business owners and other individuals
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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 adminis- tered by the Small Business Administration—
(I) to make loans to eligible intermediaries to en- able 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 ac- quisition 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-in- come 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 Busi- ness 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 assist- ance under the State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), or under any comparable State funded means tested program of assistance for low-income individuals, in order to ade- quately assist those individuals in—
(I) establishing small businesses; and (II) eliminating their dependence on that assist-
ance. (B) ESTABLISHMENT.—There is established a microloan
program, under which the Administration may— (i) make direct loans to eligible intermediaries, as pro-
vided 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 inter- mediaries for the purpose of providing intensive mar- keting, management, and technical assistance to small
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business concerns that are borrowers under this sub- section; and
(iii) subject to the requirements of paragraph (5), make grants to nonprofit entities for the purpose of pro- viding 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 ex- ceed $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 eco-
nomic, 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 as- sistance 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 assist- ance providers (such as counselors from the Service Corps of Retired Executives or small business develop- ment centers) or private sector lenders in assisting se- lected business concerns. (ii) SELECTION OF INTERMEDIARIES.—In selecting inter-
mediaries 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
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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 $5,000,000 in the remaining years of the intermediary’s participation in the program.
(D)(i) IN GENERAL.—The Administrator shall, by regu- lation, 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 sub- section 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 ini- tial 5 years of an intermediary’s participation in the program authorized by this subsection, the Adminis- trator shall, at the request of the intermediary, con- duct a review of the annual loss rate of the inter- mediary. Any intermediary in operation under this subsection prior to October 1, 1994, that requests a re- duction in its loan loss reserve shall be reviewed based on the most recent 5-year period preceding the re- quest.
(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 out- standing balance of the notes receivable owed to the intermediary.
(IV) REQUIREMENTS.—The Administrator may re- duce 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 im- pair 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
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47 So in law. Probably should be redesignated as clause (vi).
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 Adminis-
tration under this subsection shall be for a term of 10 years.
(ii) APPLICABLE INTEREST RATES.—Except as pro- vided in clause (iii), loans made by the Administration under this subsection to an intermediary shall bear an interest rate equal to 1.25 percentage points below the rate determined by the Secretary of the Treasury for obligations of the United States with a period of matu- rity 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 con- cerns 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 OF- FICES.—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) 47 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 sub- paragraphs (B) and (D), the Administration shall not charge any fees or require collateral other than an assign-
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48 Section 113(a)(4)(A) of Public Law 102–366 instructed in paragraph (4)(A) of this subsection by striking ‘‘Subject to’’ and inserting ‘‘Except as otherwise provided in subparagraph (C) and subject to’’. Section 113(a)(4)(B) of Public Law 102–366 struck existing subparagraph (A) and inserted a new subparagraph (A) shown above.
49 Section 208(a)(2) of the Small Business Administration Reauthorization and Amendments Act of 1994 (P.L. 103–403; 108 Stat. 4182) strikes subparagraph (C)(i), and inserts this new clause (i). Subsection (c) of such section provides the amendments made by this section shall remain in effect until October 1, 1997.
ment of the notes receivable of the microloans with respect to any loan made to an intermediary under this sub- section. (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) 48 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 assist- ance to small business concerns that are borrowers under this subsection. Except as provided in subparagraph (C), each intermediary meeting the requirements of subpara- graph (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 per- cent of the amount of the grant, obtained solely from non- Federal sources. In addition to cash or other direct fund- ing, 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) 49 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 inter- mediary under this subsection if—
(I) the intermediary provides not less than 25 percent of its loans to small business concerns lo- cated 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.
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(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 CON- CERNS.—
(i) IN GENERAL.—Each intermediary may expend an amount not to exceed 25 percent of the grant funds received under paragraph (1)(B)(ii) to provide informa- tion and technical assistance to small business con- cerns that are prospective borrowers under this sub- section.
(ii) TECHNICAL ASSISTANCE.—An intermediary may expend not more than 25 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 Govern- ment to make grants in accordance with this subpara- graph and section 202(b) of the Small Business Reau- thorization 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 de- scribed in paragraph (1)(A)(iv) at the time they ini- tially apply for assistance under this subparagraph.
(ii) ELIGIBLE RECIPIENTS; GRANT AMOUNTS.—In making grants under this subparagraph, the Adminis- tration may select, from among participating inter- mediaries 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 subpara- graph 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 ex- tent such costs are not otherwise paid by State block grants under the Child Care De- velopment 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
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(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 ex- penditures by each grantee under this subpara- graph and each recipient of assistance described in clause (i) who receives assistance from a grant- ee 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 re- quirements:
(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, sup- plies, furniture, fixtures, and equipment.
(B) PORTFOLIO REQUIREMENT.—To the extent prac- ticable, each intermediary that operates a microloan pro- gram 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 per- taining to the rate or amount of interest that may be charged, taken, received, or reserved on a loan, the max- imum rate of interest to be charged on a microloan funded under this subsection shall not exceed the rate of interest
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applicable to a loan made to an intermediary by the Ad- ministration—
(i) in the case of a loan of more than $7,500 made by the intermediary to a small business concern or en- trepreneur 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 TRANSPOR- TATION BUSINESSES.—In addition to other eligible small businesses concerns, borrowers under any program under this subsection may include individuals who will use the loan proceeds to establish for-profit or nonprofit child care establishments or businesses providing for-profit transpor- tation services. (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 inter- mediaries.
(B) ALLOCATION.— (i) MINIMUM ALLOCATION.—Subject to the avail-
ability of appropriations, of the total amount of new loan funds made available for award under this sub- section 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 de- termines that any portion of the amount made avail- able 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 Dis- trict of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and Amer- ican Samoa) without regard to clause (i).
(8) EQUITABLE DISTRIBUTION OF INTERMEDIARIES.—In ap- proving microloan program applicants and providing funding to intermediaries under this subsection, the Administration shall select and provide funding to such intermediaries as will en- sure appropriate availability of loans for small businesses in
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50 So in law. This period was inserted by section 604(2) of the Small Business Administration Reauthorization and Amendments Act of 1994 (P.L. 103–403; 108 Stat. 4203).
all industries located throughout each State, particularly those located in urban and in rural areas.
(9) GRANTS FOR MANAGEMENT, MARKETING, TECHNICAL AS- SISTANCE, 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 micro- lending 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 Administra- tion’s Salaries and Expense Account for the specific pur- pose 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 microenter- prise development and financing. 50 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 fis- cal year, the Administration may use not more than 5 per- cent to provide technical assistance, either directly or through contractors, to welfare-to-work microloan initia- tive 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 op- erate a successful welfare-to-work microloan initiative. (10) REPORT TO CONGRESS.—On November 1, 1995, the Ad-
ministration shall submit to the Committees on Small Busi- ness of the Senate and the House of Representatives a report, including the Administration’s evaluation of the effectiveness of the first 31⁄2 years of the microloan program and the fol- lowing:
(A) the numbers and locations of the intermediaries funded to conduct microloan programs;
(B) the amounts of each loan and each grant to inter- mediaries;
(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 inter-
mediary 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—
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51 Section 208(b) of the Small Business Administration Reauthorization and Amendments Act of 1994 (P.L. 103–403; 108 Stat. 4182) amends subparagraph (C) by striking the period and in- serting ‘‘; and’’ and adds this new subparagraph to the end of paragraph (11). Subsection (c) of such section provides the amendments made by this section shall remain in effect until Octo- ber 1, 1997.
(A) the term ‘‘intermediary’’ means— (i) a private, nonprofit entity; (ii) a private, nonprofit community development
corporation; (iii) a consortium of private, nonprofit organiza-
tions or nonprofit community development corpora- tions;
(iv) a quasi-governmental economic development entity (such as a planning and development district), other than a State, county, municipal government, or any agency thereof, if—
(I) no application is received from an eligible nonprofit organization; or
(II) the Administration determines that the needs of a region or geographic area are not ade- quately served by an existing, eligible nonprofit organization that has submitted an application; 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 Ad- ministration to make microloans to small business con- cerns under this subsection;
(B) the term ‘‘microloan’’ means a short-term, fixed rate loan of not more than $50,000, made by an inter- mediary to a startup, newly established, or growing small business concern;
(C) the term ‘‘rural area’’ means any political subdivi- sion 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 51 (D) 51 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 mak-
ing direct loans to intermediaries as authorized in paragraph (1)(B), during fiscal years 1998 through 2000, the Administra- tion may, on a pilot program basis, participate on a deferred basis of not less than 90 percent and not more than 100 per- cent on loans made to intermediaries by a for-profit or non- profit entity or by alliances of such entities, subject to the fol- lowing conditions:
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(A) NUMBER OF LOANS.—In carrying out this para- graph, the Administration shall not participate in pro- viding financing on a deferred basis to more than 10 inter- mediaries 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 inter- mediary 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 INITIA-
TIVE.—On January 31, 1999, and annually thereafter, the Ad- ministration shall submit to the Committees on Small Busi- ness of the House of Representatives and the Senate a report on any monies distributed pursuant to paragraph (4)(F). (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 em- ployee’’ means an individual who is employed by a small business concern and whose managerial or technical exper- tise 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 bor-
rower’’ 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 re- servist, who is an essential employee, was ordered to active duty.
(2) DEFERRAL OF DIRECT LOANS.— (A) IN GENERAL.—The Administration shall, upon writ-
ten 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.
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(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 pe- riod of deferral described in subparagraph (B), the Admin- istration 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 pro-
gram 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 enact- ment 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 con- cerns 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 defer- ral of repayment or other relief to any intermediary providing relief to a small business borrower under this paragraph.
SEC. 8. ø15 U.S.C. 637¿ (a)(1) It shall be the duty of the Ad- ministration and it is hereby empowered, whenever it determines such action is necessary or appropriate—
(A) to enter into contracts with the United States Govern- ment and any department, agency, or officer thereof having procurement powers obligating the Administration to furnish articles, equipment, supplies, services, or materials to the Gov- ernment 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 Ad- ministration is competent and responsible to perform any spe- cific 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 Ad- ministration and the procurement officer. Whenever the Ad- ministration 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 Admin-
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52 So in law. Paragraphs (a)(1)(C) should probably be moved two ems to the left.
istration is notified of a procurement officer’s adverse decision, the Administration may notify the contracting officer of the in- tent 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 sub- paragraph, a procurement officer’s adverse decision includes a decision not to make available for award pursuant to this sub- section 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 re- garding the procurement until a written decision on the Ad- ministrator’s request for reconsideration has been issued by such Secretary or agency head, unless such officer makes a written determination that urgent and compelling cir- cumstances which significantly affect interests of the United States will not permit waiting for a reconsideration of the ad- verse decision. If the Administrator’s request for reconsider- ation is denied, the Secretary of the department or agency head shall specify the reasons why the selected firm was deter- mined to be incapable to perform the procurement require- ment, 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 so- cially and economically disadvantaged small business concerns for construction work, services, or the manufacture, supply, as- sembly of such articles, equipment, supplies, materials, or parts thereof, or servicing or processing in connection there- with, or such management services as may be necessary to en- able the Administration to perform such contracts;
(C) 52 to make an award to a small business concern owned and controlled by socially and economically dis- advantaged 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 pub- lished solicitation relating to a competition conducted pursuant to subparagraph (D); and
(ii) the prospective contract awardee was a Pro- gram 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 re- stricted to eligible Program Participants if—
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(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 (includ- ing 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 Busi-
ness 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 Partici- pants even if the anticipated award price is not expected to ex- ceed the dollar amounts specified in clause (i)(II). Such approv- als 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 per- sons 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 de- velop, 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 con- cern and such concern has not been participating in any pro- gram conducted under the authority of this subsection for a pe- riod 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
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53 So in original. Probably should be ‘‘ensure’’.
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 pro- curement requirement, or a requirement that does not have a satis- factory 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 Ad- ministration.
(iii) The estimate of a current fair market price for a procure- ment requirement that has a satisfactory procurement history shall be based on recent award prices adjusted to insure 53 com- parability. Such adjustments shall take into account differences in quantities, performance times, plans, specifications, transportation costs, packaging and packing costs, labor and materials costs, over- head 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 informa- tion, studies, analyses, and other data used by such agency. The agency’s estimate of the current fair market price (and any sup- porting 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 sub- section may request the Administration to protest the agency’s esti- mate of the fair market price for such contract pursuant to para- graph (1)(A).
(4)(A) For purposes of this section, the term ‘‘socially and eco- nomically 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 disadvan- taged 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 disadvan-
taged individuals,
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(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 de- scribed 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 subpara- graph (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 owner- ship 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 indi- vidual qualities.
(6)(A) Economically disadvantaged individuals are those so- cially 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 busi- ness area who are not socially disadvantaged. In determining the degree of diminished credit and capital opportunities the Adminis- tration 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 Ad- ministration—
(i) a personal financial statement for each disadvantaged owner;
(ii) a record of all payments made by the Program Partici- pant 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 Pro-
gram Participant pursuant to subparagraph (B) or otherwise, the Administration has reason to believe that the standards to estab- lish 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 en- terprise system due to diminished capital and credit opportunities when compared to other concerns in the same business area, which are not socially disadvantaged.
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(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 as- sistance 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 Pro- gram 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 per- sonal 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 achieve- ment of the targets, objectives, and goals contained in such Pro- gram 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 Partici- pant 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 con- cerns 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 pri- mary personal residences, except that any portion of such eq- uity that is attributable to unduly excessive withdrawals from a Program Participant or a concern applying for program par- ticipation shall be taken into account. (7)(A) No small business concern shall be deemed eligible for
any assistance pursuant to this subsection unless the Administra- tion determines that with contract, financial, technical, and man- agement 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 regula- tions and procedures restricting the award of contracts pursuant to this subsection to a limited number of standard industrial classi- fication codes in an approved business plan shall not be applied in a manner that inhibits the logical business progression by a par- ticipating 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 re- spect to whether a group has been subjected to prejudice or bias
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shall be made by the Administrator after consultation with the As- sociate 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 Ad- ministrator.
(9)(A) Subject to the provisions of subparagraph (E), the Ad- ministration, 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 accord- ance 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 de-
termination 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 con- ducted 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 Adminis- tration’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 out- reach program to inform and recruit small business concerns to apply for eligibility for assistance under this subsection. Such pro- gram shall make a sustained and substantial effort to solicit appli- cations for certification from small business concerns located in areas of concentrated unemployment or underemployment or with- in labor surplus areas and within States having relatively few Pro- gram 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 sub- contracts awarded by the Administration pursuant to this sub- section shall be awarded within the county or State where the work is to be performed.
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(12)(A) The Administration shall require each concern eligible to receive subcontracts pursuant to this subsection to annually pre- pare and submit to the Administration a capability statement. Such statement shall briefly describe such concern’s various con- tract performance capabilities and shall contain the name and tele- phone 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 pri- marily dependent upon local contract support shall be disseminated to appropriate buying activities in the marketing area of the con- cern. The remaining statements shall be disseminated to the Direc- tors of Small and Disadvantaged Business Utilization for the ap- propriate 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 Oppor- tunity 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 Procure- ment Data System contract actions with an aggregate value in ex- cess 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 con- trolled 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 opportu- nities (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 administra- tion 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 con- cerns.
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(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 re- gional or village corporation (within the meaning of the Alaska Na- tive 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 re- quirements of section 46. (15) For purposes of this subsection, the term ‘‘Native Hawai-
ian Organization’’ means any community service organization serv- ing Native Hawaiians in the State of Hawaii which—
(A) is a nonprofit corporation that has filed articles of in- corporation 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 respon- sible 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 Pro- gram 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 for the supply of a product to be let pur- suant to this subsection or subsection (a) of section 15 solely be- cause such concern is other than the actual manufacturer or proc- essor 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 as- signed 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
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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 determina- tion by the contracting officer that no small business man- ufacturer 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 manu- facturer or processor is available to participate in the Fed- eral procurement market.
(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 employ- ment, if such person participated personally (either directly or indi- rectly) 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 own- ership 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 com- pliance 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 Busi-
ness 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
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54 So in original. Probably should be ‘‘solicited’’.
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 Ad- ministration shall expeditiously report to the Inspector General of the Administration any such action for which such employee’s par- ticipation has been solicitated 54 or directed.
(B) Any employee who willfully and knowingly violates sub- paragraph (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 reg- ulation prohibiting or restricting political activity.
(D) The prohibitions of subparagraph (A), and remedial meas- ures 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, ac- countants, consultants, and other parties (other than employ- ees) 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 com- pensation. (B) The Business Opportunity Specialist shall promptly review
and forward such report to the Associate Administrator for Minor- ity Small Business and Capital Ownership Development. Any re- port 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 require- ments of this subsection and applicable regulations shall be consid- ered ‘‘good cause’’ for the initiation of a termination proceeding pur- suant to section 7(j)(10)(F).
(21)(A) Subject to the provisions of subparagraph (B), a con- tract (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
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55 So in law. Section 8(21)(A)(C) should probably be moved two ems to the left.
owner or owners upon whom eligibility was based relinquish own- ership 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 condi- tions 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 con- tract is being performed certifies that termination of the con- tract would severely impair attainment of the agency’s pro- gram objectives or missions;
(iii) Ownership and control of the concern that is per- forming the contract will pass to another small business con- cern 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 inca- pacity or death; or
(v) When, in order to raise equity capital, it is necessary for the disadvantaged owners of the concern to relinquish own- ership of a majority of the voting stock of such concern, but only if—
(I) such concern has exited the Capital Ownership De- velopment Program;
(II) the disadvantaged owners will maintain ownership of the largest single outstanding block of voting stock (in- cluding stock held by affiliated parties); and
(III) the disadvantaged owners will maintain control of daily business operations.
(C) 55 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 relinquish- ment of ownership or control; and
(ii) in the case of subparagraph (B)(iii), he is re- quested to do so as soon as possible after the inca- pacity or death occurs.
(D) Concerns performing contracts awarded pursuant to this subsection shall be required to notify the Administration imme- diately 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 pur- poses of determining ownership and control of a concern under this section, any potential ownership interests held by investment com- panies licensed under the Small Business Investment Act of 1958
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shall be treated in the same manner as interests held by the indi- viduals 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 nec- essary—
(1)(A) to provide— (i) technical, managerial, and informational aids to
small business concerns— (I) by advising and counseling on matters in con-
nection with Government procurement and policies, principles, and practices of good management;
(II) by cooperating and advising with— (aa) voluntary business, professional, edu-
cational, and other nonprofit organizations, asso- ciations, and institutions (except that the Admin- istration shall take such actions as it determines necessary to ensure that such cooperation does not constitute or imply an endorsement by the Admin- istration of the organization or its products or services, and shall ensure that it receives appro- priate recognition in all printed materials); and
(bb) other Federal and State agencies; (III) by maintaining a clearinghouse for informa-
tion on managing, financing, and operating small busi- ness 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, ex- cept that the Administration shall—
(I) take such actions as it determines to be appro- priate 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 mar- keting area is minimized; and (II) develop an agreement, executed on behalf of
the Administration by an employee of the Administra- tion in Washington, the District of Columbia, that pro- vides, at a minimum, that—
(aa) any printed material to announce the co- sponsorship or to be distributed at the cospon- sored activity, shall be approved in advance by the Administration;
(bb) the terms and conditions of the coopera- tion shall be specified;
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(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 cospon- sor shall include a prominent disclaimer that the cooperation does not constitute or imply an en- dorsement by the Administration of any product or service of the cosponsor; and
(ff) the Administration shall ensure that it re- ceives appropriate recognition in all cosponsorship printed materials.
(B) To establish, conduct, and publicize, and to recruit, se- lect, and train volunteers for (and to enter into contracts, grants, or cooperative agreements therefor), volunteer pro- grams, including a Service Corps of Retired Executives (SCORE) and an Active Corps of Executive (ACE) for the pur- poses of section 8(b)(1)(A) of this Act. To facilitate the imple- mentation 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 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 sub- paragraph for such solicitation and the management of the contributions received.
(C) To allow any individual or group of persons partici- pating with it in furtherance of the purposes of subparagraphs (A) and (B) to use the Administration’s office facilities and re- lated material and services as the Administration deems ap- propriate, including clerical and stenographic service:
(i) such volunteers, while carrying out activities under section 8(b)(1) of this Act shall be deemed Federal employ- ees 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 de- fined 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 re- ceived under the entrance salary for a grade GS–11 em- ployee:
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(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 connec- tion with attendance at meetings sponsored by the Admin- istration, or for the cost of malpractice insurance, as the Administrator shall determine, in accordance with regula- tions which he or she shall prescribe, and, while they are carrying out such activities away from their homes or reg- ular 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 with- out 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 pay-
ment 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 pay- ments, or minimum wage laws.
(E) In carrying out its functions under subparagraph (A), to make grants (including contracts and cooperative agree- ments) to any public or private institution of higher education for the establishment and operation of a small business insti- tute, 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 pursu- ant to regulations which the Administrator shall provide, coun- sel 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 volun- teers 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 author- ized 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 intan- gible, received by gift, devise, bequest, or otherwise; and, fur- ther, 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 fa- cilities. In making any such inventory, the appropriate agen- cies in the several States may be requested to furnish an in- ventory of the productive facilities of small-business concerns
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56 So in original. Should be semicolon.
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 ef- fectively utilized;
(4) to consult and cooperative with officers of the Govern- ment 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 sub- contracts and to take action to encourage the letting of sub- contracts by prime contractors to small-business concerns at prices and on conditions and terms which are fair and equi- table;
(6) to determine within any industry the concerns, firms, persons, corporations, partnerships, cooperatives, or other busi- ness 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 re- quested 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 ex- pressed in this Act. Any such certificate shall be subject to rev- ocation 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 promul- gating regulations affecting the distribution of materials or supplies, shall accept as conclusive the Administration’s deter- mination as to which enterprises are to be designated ‘‘small- business concerns’’, as authorized and directed under this para- graph;
(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 Gov- ernment contract. A Government procurement officer or an of- ficer engaged in the sale and disposal of Federal property may not, for any reason specified in the preceding sentence, pre- clude 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. 56
(B) if a Government procurement officer finds that an oth- erwise 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 con-
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tractor 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 pur- suant 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 pow- ers 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 re- ferral 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 pro- curement 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 re- ports concerning the solicitation of bids, time of sale, or other- wise as it may deem pertinent in carrying out its functions under this Act;
(10) to obtain from suppliers of materials information per- taining to the method of filling orders and the bases for allo- cating their supply, whenever it appears that any small busi- ness is unable to obtain materials from its normal sources;
(11) to make studies and recommendations to the appro- priate 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 in- sure that a fair proportion of Government contacts for research and development be placed with small-business concerns, to in- sure 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
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57 Section 3 of Public Law 102–191 repealed old subsection (c) and redesignated subsections (d) through (j) as (c) through (k). Probably should have redesignated subsections (d) through (j) as (c) through (i). Section 232(a)(6) and (7) of Public Law 102–366 redesignated subsections (c) through (i) as (d) through (j) and inserted the above subsection (c).
transportation expenses and a per diem allowance in accord- ance with section 5703 of title 5, United States Code, to the members of such boards and committees for travel and subsist- ence 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 ac- commodations as are needed to facilitate the conduct of such meetings;
(14) to provide at the earliest practicable time such infor- mation and assistance as may be appropriate, including infor- mation concerning eligibility for loans under section 7(b)(3), to local public agencies (as defined in section 110(h) of the Hous- ing 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 oper- ations;
(15) to disseminate, without regard to the provisions of section 3204 of title 39, United States Code, data and informa- tion, in such form as it shall deem appropriate, to public agen- cies, 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 coop- erative agreements with, educational institutions, private busi- nesses, 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 com- ponent of the Armed Forces. (c) 57 øReserved.¿ (d)(1) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by vet- erans, small business concerns owned and controlled by service-dis- abled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economi- cally disadvantaged individuals, and small business concerns owned and controlled by women, shall have the maximum prac- ticable 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
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small business concerns, small business concerns owned and con- trolled 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 Common- wealth 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 vet- erans, small business concerns owned and controlled by serv- ice-disabled veterans, qualified HUBZone small business con- cerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small busi- ness concerns owned and controlled by women shall have the maximum practicable opportunity to participate in the per- formance of contracts let by any Federal agency, including con- tracts and subcontracts for subsystems, assemblies, compo- nents, 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 pur- suant to the terms of their subcontracts with small business concerns, small business concerns owned and controlled by vet- erans, small business concerns owned and controlled by serv- ice-disabled veterans, qualified HUBZone small business con- cerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small busi- ness 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 Administra- tion or the awarding agency of the United States as may be necessary to determine the extent of the contractor’s compli- ance with this clause.
(C) As used in this contract, the term ‘‘small business con- cern’’ shall mean a small business as defined pursuant to sec- tion 3 of the Small Business Act and relevant regulations pro- mulgated pursuant thereto. The term ‘‘small business concern owned and controlled by socially and economically disadvan- taged 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
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(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 disadvan- taged by the Administration pursuant to section 8(a) of the Small Business Act.
(D) The term ‘‘small business concern owned and con- trolled 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 busi- ness, 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 con-
trolled 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 Busi- ness 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 eco- nomically disadvantaged individuals, or a small business con- cern 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. (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 nego- tiated 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 sub- section relating to contracts awarded pursuant to the negotiated method of procurement.
(B) Before the award of any contract to be let, or any amend- ment 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),
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58 So in original. Should be ‘‘imposition’’.
(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 procure- ment authority a subcontracting plan which incorporates the infor- mation 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 re- sponsibility of that offeror for the award of the contract.
(D) No contract shall be awarded to any offeror unless the pro- curement authority determines that the plan to be negotiated by the offeror pursuant to this paragraph provides the maximum prac- ticable opportunity for small business concerns, qualified HUBZone small business concerns, small business concerns owned and con- trolled 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 con- trolled 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 con- tracts let pursuant to the negotiated method of procurement.
(F)(i) Each contract subject to the requirements of this para- graph 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 dem- onstrate a good faith effort regarding compliance prior to the con- tracting officer’s final decision regarding the impositon 58 of dam- ages and the amount thereof. The final decision of a contracting of- ficer 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).
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(iii) Each agency shall ensure that the goals offered by the ap- parent successful bidder or offeror are attainable in relation to—
(I) the subcontracting opportunities available to the con- tractor, commensurate with the efficient and economical per- formance 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 Fed- eral agency as significant factors for purposes of evaluating of- fers for a bundled contract where the head of the agency deter- mines that the contract offers a significant opportunity for sub- contracting:
(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 offer- or, 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 subcon- tracting plans shall be considered by the Federal agency in deter- mining the responsibility of such bidder for the award of the con- tract. 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 con- trolled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and con- trolled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women;
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(B) the name of an individual within the employ of the of- feror 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 con- cerns owned and controlled by service-disabled veterans, quali- fied HUBZone small business concerns, small business con- cerns owned and controlled by socially and economically dis- advantaged 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 sub- contracts 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 of- feror 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 ap- proved subcontracting plans;
(iii) ensure that subcontracting reports are submitted by their subcontractors when required;
(iv) acknowledge receipt of their subcontractors’ re- ports;
(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 offer- or 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 individ- uals, and small business concerns owned and controlled by women; and efforts to identify and award subcontracts to such small business concerns;
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59 Margin so in law.
(G) a recitation of the types of records the successful offer- or 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 estab- lished 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 busi- ness concerns, small business concerns owned and con- trolled by socially and economically disadvantaged individ- uals, and small business concerns owned and controlled by women; and
(ii) efforts to identify and award subcontracts to such small business concerns; and
(H) 59 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 sub- mitting the bid or proposal; and
(ii) provide to the contracting officer a written ex- planation if the offeror or bidder fails to acquire arti- cles, equipment, supplies, services, or materials or ob- tain 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 ob- jectives set forth in subcontracting plans submitted pursu- ant 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 sub- section.
(8) The provisions of paragraphs (4), (5), and (6) shall not apply to offerors or bidders who are small business concerns.
(9) The failure of any contractor or subcontractor to comply in good faith with—
(A) the clause contained in paragraph (3) of this sub- section, or
(B) any plan required of such contractor pursuant to the authority of this subsection to be included in its contract or subcontract,
shall be a material breach of such contract or subcontract and may be considered in any past performance evaluation of the contractor.
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(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 para- graphs (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 sub- section, including the formulation of subcontracting plans pur- suant to paragraph (4);
(B) review any solicitation for any contract to be let pursu- ant to paragraphs (4) and (5) to determine the maximum prac- ticable opportunity for small business concerns, small business concerns owned and controlled by veterans, small business con- cerns owned and controlled by service-disabled veterans, quali- fied HUBZone small business concerns, small business con- cerns owned and controlled by socially and economically dis- advantaged 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 agen- cy, either on a contract-by-contract basis or, in the case of con- tractors having multiple contracts, on an aggregate basis. (12) For purposes of determining the attainment of a sub-
contract utilization goal under any subcontracting plan entered into with any executive agency pursuant to this subsection, a men- tor 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 sec- tion.
(13) PAYMENT OF SUBCONTRACTORS.— (A) DEFINITION.—In this paragraph, the term ‘‘covered con-
tract’’ 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 con-
tract 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 com- pletion 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 con-
tract shall consider the unjustified failure by a prime con-
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tractor 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 his- tory of unjustified, untimely payments to contractors, the con- tracting officer shall record the identity of the contractor in ac- cordance with the regulations promulgated under subpara- graph (E).
(E) REGULATIONS.—Not later than 1 year after the date of enactment of this paragraph, the Federal Acquisition Regu- latory 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 con- tractor 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 avail- able through, the Federal Awardee Performance and Integ- rity Information System, or any successor thereto. (14) An offeror for a covered contract that intends to iden-
tify a small business concern as a potential subcontractor in a bid or proposal for the contract, or in a plan submitted pursu- ant to this subsection in connection with the contract, shall no- tify the small business concern prior to making such identifica- tion.
(15) The Administrator shall establish a reporting mecha- nism that allows a subcontractor or potential subcontractor to report fraudulent activity or bad faith by a contractor with re- spect to a subcontracting plan submitted pursuant to this sub- section. (16) CREDIT FOR CERTAIN SUBCONTRACTORS.—
(A) For purposes of determining whether or not a prime contractor has attained the percentage goals specified in para- graph (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 para- graph (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 responsi-
bility of a prime contractor to make a good-faith effort to achieve the first tier small business subcontracting goals nego- tiated under paragraph (6)(A), or the requirement for sub-
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contractors with further opportunities for subcontracting to make a good-faith effort to achieve the goals established under paragraph (6)(D). (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 ar- rangement,
shall publish a notice described in subsection (f); (B) an executive agency intending to solicit bids or pro-
posals for a contract for property or services shall post, for a period of not less than ten days, in a public place at the con- tracting office issuing the solicitation a notice of solicitation de- scribed in subsection (f)—
(i) in the case of an executive agency other than the Department of Defense, if the contract is for a price ex- pected 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 announc- ing 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 require-
ments under section 18(a)(7) of the Office of Federal Procure- ment Policy Act (41 U.S.C. 416(a)(7)); or
(ii) by the Secretary of Commerce in the Commerce Busi- ness 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 great- er than the simplified acquisition threshold, establish a dead- line 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 ear- lier than the date 30 days after the date the notice re- quired by paragraph (1)(A)(ii) is published;
(ii) in the case of a solicitation for research and devel- opment, is earlier than the date 45 days after the date the notice required by paragraph (1)(A)(i) is published; or
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(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 func- tion, physical dimensions, predominant material of manufac- ture, or similar information that will assist a prospective con- tractor 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 re-
spond to the solicitation will not be furnished as part of such solicitation, and identify the source in the Govern- ment, if any, from which the technical data may be ob- tained; and
(B) state whether an offeror, its product, or service must meet a qualification requirement in order to be eligi- ble 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 con- sidered by the agency;
(5) in the case of a procurement using procedures other than competitive procedures, a statement of the reason justi- fying the use of such procedures and the identity of the in- tended 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 acqui- sition 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 con- ducted by—
(i) using widespread electronic public notice of the so- licitation 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 na- tional security;
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(C) the proposed procurement would result from accept- ance of—
(i) any unsolicited proposal that demonstrates a unique and innovative research concept and the publica- tion 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 tele-
communication 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 fore- seeable 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 Administra- tive 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 Admin- istrator of the Small Business Administration, that it is not appro- priate or reasonable to publish a notice before issuing a solicitation.
(h)(1) An executive agency may not award a contract using pro- cedures other than competitive procedures unless—
(A) except as provided in paragraph (2), a written justifica- tion 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 ad- vocate 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 mem- ber 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)) (with- out further delegation); and
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(B) all other requirements applicable to the use of such procedures under title III of the Federal Property and Adminis- trative 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 com- plete 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 dupli- cation, 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 Fed- eral 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 exec- utive agency subject to subsection (e)(1)(C); and
(B) a business concern that is a subcontractor or sup- plier (at any tier) to such contractor having a subcon- tracting 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 AF-
FECTED BY MILITARY OPERATIONS.—The Administration shall uti- lize, as appropriate, its entrepreneurial development and manage- ment 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 BUSI- NESS CONCERNS.—
(1) DEFINITIONS.—In this subsection, the following defini- tions apply:
(A) CONTRACTING OFFICER.—The term ‘‘contracting of- ficer’’ 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 CON- TROLLED BY WOMEN.—The term ‘‘small business concern
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126Sec. 8 SMALL BUSINESS ACT
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 competi- tion 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 dis- advantaged (and such ownership is determined without re- gard to any community property law);
(B) the contracting officer has a reasonable expecta- tion 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 Ad- ministrator 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— (i) is certified by a Federal agency, a State govern-
ment, or a national certifying entity approved by the Administrator, as a small business concern owned and controlled by women; or
(ii) certifies to the contracting officer that it is a small business concern owned and controlled by women and provides adequate documentation, in ac- cordance with standards established by the Adminis- tration, to support such certification.
(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 underrep- resented.
(4) IDENTIFICATION OF INDUSTRIES.—The Administrator shall conduct a study to identify industries in which small business concerns owned and controlled by women are under- represented 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 inter- ested party, relating to the veracity of a certification made or information provided to the Administration by a small business concern under paragraph (2)(F)); and
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(ii) verification by the Administrator of the accu- racy of any certification made or information provided to the Administration by a small business concern under paragraph (2)(F). (B) EXAMINATIONS.—The procedures established under
subparagraph (A) may provide for program examinations (including random program examinations) by the Adminis- trator of any small business concern making a certification or providing information to the Administrator under para- graph (2)(F).
(C) PENALTIES.—In addition to the penalties described in section 16(d), any small business concern that is deter- mined 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 Adminis- trator, 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 sub- section. (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 enti- ties, or any combination of private and public entities—
(A) to expand business-to-business relationships be- tween 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 de- scribed 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 author- ized 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. 9. ø15 U.S.C. 638¿ (a) Research and development are
major factors in the growth and progress of industry and the na- tional economy. The expense of carrying on research and develop- ment programs is beyond the means of many small-business con- cerns, and such concerns are handicapped in obtaining the benefits of research and development programs conducted at Government expense. These small-business concerns are thereby placed at a competitive disadvantage. This weakens the competitive free enter- prise system and prevents the orderly development of the national
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60 So in original. The word ‘‘and’’ probably should not appear. 61 Section 5131(1)(B) of division E of Public Law 112–81 provides for an amendment to section
9(b)(7) as follows: (B) by striking ‘‘(g)(10), (o)(9), and (o)(15), the number’’ and all that follows through
‘‘under each of the SBIR and STTR programs, and a description’’ and inserting the fol- lowing: ‘‘(g)(8) and (o)(9);
‘‘(B) the number of proposals received from, and the number and total amount of awards to, HUBZone small business concerns and firms with venture capital, hedge fund, or private equity firm investment (including those majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms) under each of the SBIR and STTR programs;
‘‘(C) a description of the extent to which each Federal agency is increasing outreach and awards to firms owned and controlled by women or by socially or economically dis- advantaged individuals under each of the SBIR and STTR programs;
‘‘(D) general information about the implementation of, and compliance with the allo- cation of funds required under, subsection (dd) for firms owned in majority part by ven- ture capital operating companies, hedge funds, or private equity firms and participating in the SBIR program;
‘‘(E) a detailed description of appeals of Phase III awards and notices of noncompli- ance with the SBIR Policy Directive and the STTR Policy Directive filed by the Admin- istrator with Federal agencies;
‘‘(F) an accounting of funds, initiatives, and outcomes under the Commercialization Readiness Program; and
‘‘(G) a description
economy. It is the policy of the Congress that assistance be given to small-business concerns to enable them to undertake and to ob- tain the benefits of research and development in order to maintain and strengthen the competitive free enterprise system and the na- tional economy.
(b) It shall be the duty of the Administration, and it is hereby empowered—
(1) to assist small-business concerns to obtain Government contracts for research and development;
(2) to assist small-business concerns to obtain the benefits of research and development performed under Government contracts or at Government expense;
(3) to provide technical assistance to small-business con- cerns to accomplish the purposes of this section; and 60
(4) to develop and maintain a source file and an informa- tion program to assure each qualified and interested small business concern the opportunity to participate in Federal agency small business innovation research programs and small business technology transfer programs;
(5) to coordinate with participating agencies a schedule for release of SBIR and STTR solicitations, and to prepare a mas- ter release schedule so as to maximize small business’ opportu- nities to respond to solicitations;
(6) to independently survey and monitor the operation of SBIR and STTR programs within participating Federal agen- cies;
(7) to report not less than annually to the Committee on Small Business of the Senate, and to the Committee on Science and the Committee on Small Business of the House of Rep- resentatives, on the SBIR and STTR programs of the Federal agencies and the Administration’s information and monitoring efforts related to the SBIR and STTR programs, including—
(A) the data on output and outcomes collected pursu- ant to subsections (g)(10), (o)(9), and (o)(15), and including an accounting of funds, initiatives, and outcomes under the Commercialization Pilot Program the number 61 of pro-
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The amendment could not be executed because of a previous amendment made by section 1067(a)(1) of division A of such Public Law.
posals received from, and the number and total amount of awards to, HUBZone small business concerns under each of the SBIR and STTR programs, and a description of the extent to which Federal agencies are providing in a timely manner information needed to maintain the database de- scribed in subsection (k); (8) to provide for and fully implement the tenets of Execu-
tive Order No. 13329 (Encouraging Innovation in Manufac- turing); and
(9) to coordinate the implementation of electronic data- bases at each of the Federal agencies participating in the SBIR program or the STTR program, including the technical ability of the participating agencies to electronically share data. (c) The Administration is authorized to consult and cooperate
with all Government agencies and to make studies and rec- ommendations to such agencies, and such agencies are authorized and directed to cooperate with the Administration in order to carry out and to accomplish the purposes of this section.
(d)(1) The Administrator is authorized to consult with rep- resentatives of small-business concerns with a view to assisting and encouraging such firms to undertake joint programs for re- search and development carried out through such corporate or other mechanism as may be most appropriate for the purpose. Such joint programs may, among other things, include the following pur- poses:
(A) to construct, acquire, or establish laboratories and other facilities for the conduct of research;
(B) to undertake and utilize applied research; (C) to collect research information related to a particular
industry and disseminate it to participating members; (D) to conduct applied research on a protected, proprietary,
and contractual basis with member or nonmember firms, Gov- ernment agencies, and others;
(E) to prosecute applications for patents and render patent services for participating members; and
(F) to negotiate and grant licenses under patents held under the point program, and to establish corporations de- signed to exploit particular patents obtained by it. (2) The Administrator may, after consultation with the Attor-
ney General and the Chairman of the Federal Trade Commission, and with the prior written approval of the Attorney General, ap- prove any agreement between small-business firms providing for a joint program of research and development, if the Administrator finds that the joint program proposed will maintain and strengthen the free enterprise system and the economy of the Nation. The Ad- ministrator or the Attorney General may at any time withdraw his approval of the agreement and the joint program of research and development covered thereby, if he finds that the agreement or the joint program carried on under it is no longer in the best interests of the competitive free enterprise system and the economy of the Nation. A copy of the statement of any such finding and approval
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62 Amendment made by section 103(c) of the Small Business Research and Development En- hancement Act of 1992 is unexecutable. This is probably a result of an amendment made by P.L. 102–484 which added text similar to this unexecutable amendment.
intended to be within the coverage of this subsection, and a copy of any modification or withdrawal of approval, shall be published in the Federal Register. The authority conferred by this subsection on the Administrator shall not be delegated by him.
(3) No act or omission to act pursuant to and within the scope of any joint program for research and development, under an agreement approved by the Administrator under this subsection, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act. Upon publication in the Federal Register of the notice of withdrawal of his approval of the agreement granted under this subsection, either by the Adminis- trator or by the Attorney General, the provisions of this subsection shall not apply to any subsequent act or omission to act by reason of such agreement or approval.
(e) For the purpose of this section— (1) the term ‘‘extramural budget’’ means the sum of the
total obligations minus amounts obligated for such activities by employees of the agency in or through Government-owned, Government-operated facilities, except that for the Agency for International Development it shall not include amounts obli- gated solely for general institutional support of international research centers or for grants to foreign countries, and except that for the Department of Energy it shall not include amounts obligated for atomic energy defense programs for weapons and weapons-related activities or for naval reactor programs 62;
(2) the term ‘‘Federal agency’’ means an executive agency as defined in section 105 of title 5, United States Code, or a military department as defined in section 102 of such title, ex- cept that it does not include any agency within the Intelligence Community (as the term is defined in section 3.4(f) of Execu- tive Order 12333 or its successor orders);
(3) the term ‘‘funding agreement’’ means any contract, grant, or cooperative agreement entered into between any Fed- eral agency and any small business for the performance of ex- perimental, developmental, or research work funded in whole or in part by the Federal Government;
(4) the term ‘‘Small Business Innovation Research Pro- gram’’ or ‘‘SBIR’’ means a program under which a portion of a Federal agency’s research or research and development effort is reserved for award to small business concerns through a uni- form process having—
(A) a first phase for determining, insofar as possible, the scientific and technical merit and feasibility of ideas that appear to have commercial potential, as described in subparagraph (B), submitted pursuant to SBIR program solicitations;
(B) a second phase, which shall not include any invita- tion, pre-screening, or pre-selection process for eligibility for Phase II, that will further develop proposals which meet particular program needs, in which awards shall be made based on the scientific and technical merit and feasi-
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bility of the proposals, as evidenced by the first phase, con- sidering, among other things, the proposal’s commercial potential, as evidenced by—
(i) the small business concern’s record of success- fully commercializing SBIR or other research;
(ii) the existence of second phase funding commit- ments from private sector or non-SBIR funding sources;
(iii) the existence of third phase, follow-on commit- ments for the subject of the research; and
(iv) the presence of other indicators of the com- mercial potential of the idea; and (C) where appropriate, a third phase for work that de-
rives from, extends, or completes efforts made under prior funding agreements under the SBIR program—
(i) in which commercial applications of SBIR-fund- ed research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-SBIR Federal funding awards; or
(ii) for which awards from non-SBIR Federal fund- ing sources are used for the continuation of research or research and development that has been competi- tively selected using peer review or merit-based selec- tion procedures;
(5) the term ‘‘research’’ or ‘‘research and development’’ means any activity which is (A) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a systematic study directed specifically to- ward applying new knowledge to meet a recognized need; or (C) a systematic application of knowledge toward the produc- tion of useful materials, devices, and systems or methods, in- cluding design, development, and improvement of prototypes and new processes to meet specific requirements;
(6) the term ‘‘Small Business Technology Transfer Pro- gram’’ or ‘‘STTR’’ means a program under which a portion of a Federal agency’s extramural research or research and devel- opment effort is reserved for award to small business concerns for cooperative research and development through a uniform process having—
(A) a first phase, to determine, to the extent possible, the scientific, technical, and commercial merit and feasi- bility of ideas submitted pursuant to STTR program solici- tations;
(B) a second phase, which shall not include any invita- tion, pre-screening, or pre-selection process for eligibility for Phase II, that will further develop proposals that meet particular program needs, in which awards shall be made based on the scientific, technical, and commercial merit and feasibility of the idea, as evidenced by the first phase and by other relevant information; and
(C) where appropriate, a third phase for work that de- rives from, extends, or completes efforts made under prior funding agreements under the STTR program—
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(i) in which commercial applications of STTR- funded research or research and development are funded by non-Federal sources of capital or, for prod- ucts or services intended for use by the Federal Gov- ernment, by follow-on non-STTR Federal funding awards; and
(ii) for which awards from non-STTR Federal funding sources are used for the continuation of re- search or research and development that has been competitively selected using peer review or scientific review criteria;
(7) the term ‘‘cooperative research and development’’ means research or research and development conducted jointly by a small business concern and a research institution in which not less than 40 percent of the work is performed by the small business concern, and not less than 30 percent of the work is performed by the research institution;
(8) the term ‘‘research institution’’ means a nonprofit insti- tution, as defined in section 4(5) of the Stevenson-Wydler Tech- nology Innovation Act of 1980, and includes federally funded research and development centers, as identified by the Na- tional Scientific Foundation in accordance with the govern- mentwide Federal Acquisition Regulation issued in accordance with section 35(c)(1) of the Office of Federal Procurement Pol- icy Act (or any successor regulation thereto);
(9) the term ‘‘commercial applications’’ shall not be con- strued to exclude testing and evaluation of products, services, or technologies for use in technical or weapons systems, and further, awards for testing and evaluation of products, services, or technologies for use in technical or weapons systems may be made in either Phase II or Phase III of the Small Business In- novation Research Program and of the Small Business Tech- nology Transfer Program, as defined in this subsection;
(10) the term ‘‘commercialization’’ means— (A) the process of developing products, processes, tech-
nologies, or services; and (B) the production and delivery (whether by the origi-
nating party or by others) of products, processes, tech- nologies, or services for sale to or use by the Federal Gov- ernment or commercial markets; (11) the term ‘‘Phase I’’ means—
(A) with respect to the SBIR program, the first phase described in paragraph (4)(A); and
(B) with respect to the STTR program, the first phase described in paragraph (6)(A); (12) the term ‘‘Phase II’’ means—
(A) with respect to the SBIR program, the second phase described in paragraph (4)(B); and
(B) with respect to the STTR program, the second phase described in paragraph (6)(B); and (13) the term ‘‘Phase III’’ means—
(A) with respect to the SBIR program, the third phase described in paragraph (4)(C); and
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63 Section 5141(b)(3)(A) of division E of Public Law 112–81 provides for an amendment that is subject to a delayed effective date as follows:
(3) PROSPECTIVE REPEAL.—Effective on the first day of the fourth full fiscal year following the date of enactment of this Act ødate of enactment is December 31, 2011¿, section 9 of the Small Business Act (15 U.S.C. 638), as amended by paragraph (1) of this section, is amended—
(B) with respect to the STTR program, the third phase described in paragraph (6)(C).
(f) FEDERAL AGENCY EXPENDITURES FOR THE SBIR PROGRAM.— (1) REQUIRED EXPENDITURE AMOUNTS.—Except as provided
in paragraph (2)(B), each Federal agency which has an extra- mural budget for research or research and development in ex- cess of $100,000,000 for fiscal year 1992, or any fiscal year thereafter, shall expend with small business concerns—
(A) not less than 1.5 percent of such budget in each of fiscal years 1993 and 1994;
(B) not less than 2.0 percent of such budget in each of fiscal years 1995 and 1996;
(C) not less than 2.5 percent of such budget in each of fiscal years 1997 through 2011;
(D) not less than 2.6 percent of such budget in fiscal year 2012;
(E) not less than 2.7 percent of such budget in fiscal year 2013;
(F) not less than 2.8 percent of such budget in fiscal year 2014;
(G) not less than 2.9 percent of such budget in fiscal year 2015;
(H) not less than 3.0 percent of such budget in fiscal year 2016; and
(I) not less than 3.2 percent of such budget in fiscal year 2017 and each fiscal year thereafter,
specifically in connection with SBIR programs which meet the requirements of this section, policy directives, and regulations issued under this section.
(2) 63 LIMITATIONS.—A Federal agency shall not make available for the purpose of meeting the requirements of para- graph (1) an amount of its extramural budget for basic re- search which exceeds the percentages specified in paragraph (1).
(A) in subsection (f)(2), by striking ‘‘shall not make available for the purpose’’ and inserting the following: ‘‘shall not—
‘‘(A) use any of its SBIR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with sala- ries and expenses; or
‘‘(B) make available for the purpose’’; and (3) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—Fund-
ing agreements with small business concerns for research or research and development which result from competitive or single source selections other than an SBIR program shall not be considered to meet any portion of the percentage require- ments of paragraph (1).
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(4) RULE OF CONSTRUCTION.—Nothing in this subsection may be construed to prohibit a Federal agency from expending with small business concerns an amount of the extramural budget for research or research and development of the agency that exceeds the amount required under paragraph (1). (g) Each Federal agency required by subsection (f) to establish
a small business innovation research program shall, in accordance with this Act and regulations issued hereunder—
(1) unilaterally determine categories of projects to be in its SBIR program;
(2) issue small business innovation research solicitations in accordance with a schedule determined cooperatively with the Small Business Administration;
(3) unilaterally determine research topics within the agen- cy’s SBIR solicitations, giving special consideration to broad re- search topics and to topics that further 1 or more critical tech- nologies, as identified by—
(A) the National Critical Technologies Panel (or its successor) in the 1991 report required under section 603 of the National Science and Technology Policy, Organization, and Priorities Act of 1976, and in subsequent reports issued under that authority; or
(B) the Secretary of Defense, in the 1992 report issued in accordance with section 2522 of title 10, United States Code, and in subsequent reports issued under that author- ity; (4)(A) unilaterally receive and evaluate proposals resulting
from SBIR proposals; and (B) make a final decision on each proposal submitted
under the SBIR program— (i) not later than 1 year after the date on which the
applicable solicitation closes, if with respect to the Na- tional Institutes of Health or the National Science Founda- tion, or 90 days after the date on which the applicable so- licitation closes, if with respect to any other participating agency; or
(ii) if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the agency under clause (i); (5) subject to subsection (l), unilaterally select awardees
for the SBIR funding agreements and inform each awardee under such an agreement, to the extent possible, of the ex- penses of the awardee that will be allowable under the funding agreement;
(6) administer its own SBIR funding agreements (or dele- gate such administration to another agency);
(7) make payments to recipients of SBIR funding agree- ments on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make pay- ment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period begin- ning on the date of completion of such requirements;
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(8) collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from awardees as is necessary to assess the SBIR program, including information necessary to maintain the database described in subsection (k), includ- ing—
(A) whether an awardee— (i) has venture capital, hedge fund, or private eq-
uity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and, if so—
(I) the amount of venture capital, hedge fund, or private equity firm investment that the award- ee has received as of the date of the award; and
(II) the amount of additional capital that the awardee has invested in the SBIR technology; (ii) has an investor that—
(I) is an individual who is not a citizen of the United States or a lawful permanent resident of the United States and, if so, the name of any such individual; or
(II) is a person that is not an individual and is not organized under the laws of a State or the United States and, if so, the name of any such person; (iii) is owned by a woman or has a woman as a
principal investigator; (iv) is owned by a socially or economically dis-
advantaged individual or has a socially or economi- cally disadvantaged individual as a principal investi- gator;
(v) is a faculty member or a student of an institu- tion of higher education, as that term is defined in sec- tion 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or
(vi) is located in a State described in subsection (u)(3); (B) a justification statement from the agency, if an
awardee receives an award in an amount that is more than the award guidelines under this section; and
(C) data with respect to the Federal and State Tech- nology Partnership Program (FAST Program); (9) make an annual report on the SBIR program to the
Small Business Administration and the Office of Science and Technology Policy;
(10) include, as part of its annual performance plan as re- quired by subsections (a) and (b) of section 1115 of title 31, United States Code, a section on its SBIR program, and shall submit such section to the Committee on Small Business of the Senate, and the Committee on Science and the Committee on Small Business of the House of Representatives;
(11) provide for and fully implement the tenets of Execu- tive Order No. 13329 (Encouraging Innovation in Manufac- turing); and
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(12) provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tri- bunal concerning the SBIR program of the Federal agency. (h) In addition to the requirements of subsection (f), each Fed-
eral agency which has a budget for research or research and devel- opment in excess of $20,000,000 for any fiscal year beginning with fiscal year 1983 or subsequent fiscal year shall establish goals spe- cifically for funding agreements for research or research and devel- opment to small business concerns, and no goal established under this subsection shall be less than the percentage of the agency’s re- search or research and development budget expended under fund- ing agreements with small business concerns in the immediately preceding fiscal year.
(i) ANNUAL REPORTING.— (1) IN GENERAL.—Each Federal agency required by this
section to have an SBIR program or to establish goals shall re- port annually to the Small Business Administration the num- ber of awards (including awards under subsection (y)) pursuant to grants, contracts, or cooperative agreements over $10,000 in amount and the dollar value of all such awards, identifying SBIR awards and comparing the number and amount of such awards with awards to other than small business concerns.
(2) CALCULATION OF EXTRAMURAL BUDGET.— (A) METHODOLOGY.—Not later than 4 months after the
date of the enactment of each appropriations Act for a Fed- eral agency required by this section to have an SBIR pro- gram, the Federal agency shall submit to the Adminis- trator a report, which shall include a description of the methodology used for calculating the amount of the extra- mural budget of that Federal agency.
(B) ADMINISTRATOR’S ANALYSIS.—The Administrator shall include an analysis of the methodology received from each Federal agency referred to in subparagraph (A) in the report required by subsection (b)(7).
(j)(1) POLICY DIRECTIVES.—The Small Business Administration, after consultation with the Administrator of the Office of Federal Procurement Policy, the Director of the Office of Science and Tech- nology Policy, and the Intergovernmental Affairs Division of the Of- fice of Management and Budget, shall, within one hundred and twenty days of the enactment of the Small Business Innovation De- velopment Act of 1982, issue policy directives for the general con- duct of the SBIR programs within the Federal Government, includ- ing providing for—
(A) simplified, standardized, and timely SBIR solicitations; (B) a simplified, standardized funding process which pro-
vides for (i) the timely receipt and review of proposals; (ii) out- side peer review for at least Phase II proposals, if appropriate; (iii) protection of proprietary information provided in proposals; (iv) selection of awardees; (v) retention of rights in data gen- erated in the performance of the contract by the small business concern; (vi) transfer of title to property provided by the agency to the small business concern if such a transfer would be more cost effective than recovery of the property by the agency; (vii) cost sharing; and (viii) cost principles and payment schedules;
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64 Margin so in law.
(C) exemptions from the regulations under paragraph (2) if national security or intelligence functions clearly would be jeopardized;
(D) minimizing regulatory burden associated with partici- pation in the SBIR program for the small business concern which will stimulate the cost-effective conduct of Federal re- search and development and the likelihood of commercializa- tion of the results of research and development conducted under the SBIR program;
(E) simplified, standardized, and timely annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(F) standardized and orderly withdrawal from program participation by an agency having a SBIR program; at the dis- cretion of the Administration, such directives may require a phased withdrawal over a period of time sufficient in duration to minimize any adverse impact on small business concerns; and
(G) the voluntary participation in a SBIR program by a Federal agency not required to establish such a program pur- suant to subsection (f).
(2) 64 MODIFICATIONS.—Not later than 90 days after the date of enactment of the Small Business Research and Devel- opment Enhancement Act of 1992, the Administrator shall modify the policy directives issued pursuant to this subsection to provide for—
(A) retention by a small business concern of the rights to data generated by the concern in the performance of an SBIR award for a period of not less than 4 years;
(B) continued use by a small business concern partici- pating in Phase III of the SBIR program, as a directed bailment, of any property transferred by a Federal agency to the small business concern in Phase II of an SBIR pro- gram for a period of not less than 2 years, beginning on the initial date of the concern’s participation in Phase III of such program;
(C) procedures to ensure, to the extent practicable, that an agency which intends to pursue research, develop- ment, or production of a technology developed by a small business concern under an SBIR program enters into fol- low-on, non-SBIR funding agreements with the small busi- ness concern for such research, development, or produc- tion;
(D) an increase to $150,000 in the amount of funds which an agency may award in Phase I of an SBIR pro- gram, and to $1,000,000 in Phase II of an SBIR program, and an adjustment of such amounts every year for infla- tion;
(E) a process for notifying the participating SBIR agencies and potential SBIR participants of the 1991, 1992, and the current critical technologies, as identified—
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65 Margin so in law.
(i) by the National Critical Technologies Panel (or its successor), in accordance with section 603 of the National Science and Technology Policy, Organization, and Priorities Act of 1976; or
(ii) by the Secretary of Defense, in accordance with section 2522 of title 10, United States Code; (F) enhanced outreach efforts to increase the participa-
tion of socially and economically disadvantaged small busi- ness concerns, as defined in section 8(a)(4), and the partici- pation of small businesses that are 51 percent owned and controlled by women in technological innovation and in SBIR programs, including Phase III of such programs, and the collection of data to document such participation;
(G) technical and programmatic guidance to encourage agencies to develop gap-funding programs to address the delay between an award for Phase I of an SBIR program and the application for and extension of an award for Phase II of such program;
(H) procedures to ensure that a small business concern that submits a proposal for a funding agreement for Phase I of an SBIR program and that has received more than 15 Phase II SBIR awards during the preceding 5 fiscal years is able to demonstrate the extent to which it was able to secure Phase III funding to develop concepts resulting from previous Phase II SBIR awards; and
(I) procedures to ensure that agencies participating in the SBIR program retain the information submitted under subparagraph (H) at least until the General Accounting Office submits the report required under section 105 of the Small Business Research and Development Enhancement Act of 1992. (3) 65 ADDITIONAL MODIFICATIONS.—Not later than 120
days after the date of the enactment of the Small Business In- novation Research Program Reauthorization Act of 2000, the Administrator shall modify the policy directives issued pursu- ant to this subsection—
(A) to clarify that the rights provided for under para- graph (2)(A) apply to all Federal funding awards under this section, including Phase I, Phase II, and Phase III;
(B) to provide for the requirement of a succinct com- mercialization plan with each application for a Phase II award that is moving toward commercialization;
(C) to require agencies to report to the Administration, not less frequently than annually, all instances in which an agency pursued research, development, or production of a technology developed by a small business concern using an award made under the SBIR program of that agency, and determined that it was not practicable to enter into a follow-on non-SBIR program funding agreement with the small business concern, which report shall include, at a minimum—
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(i) the reasons why the follow-on funding agree- ment with the small business concern was not prac- ticable;
(ii) the identity of the entity with which the agen- cy contracted to perform the research, development, or production; and
(iii) a description of the type of funding agreement under which the research, development, or production was obtained; and (D) to implement subsection (v), including establishing
standardized procedures for the provision of information pursuant to subsection (k)(3).
(k) DATABASE.— (1) PUBLIC DATABASE.—Not later than 180 days after the
date of the enactment of the Small Business Innovation Re- search Program Reauthorization Act of 2000, the Adminis- trator shall develop, maintain, and make available to the pub- lic a searchable, up-to-date, electronic database that includes—
(A) the name, size, location, and an identifying num- ber assigned by the Administrator, of each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency;
(B) a description of each Phase I or Phase II SBIR or STTR award received by that small business concern, in- cluding—
(i) an abstract of the project funded by the award, excluding any proprietary information so identified by the small business concern;
(ii) the Federal agency making the award; and (iii) the date and amount of the award;
(C) an identification of any business concern or sub- sidiary established for the commercial application of a product or service for which an SBIR or STTR award is made;
(D) information regarding mentors and Mentoring Networks, as required by section 35(d);
(E) with respect to assistance under the STTR pro- gram only—
(i) whether the small business concern or the re- search institution initiated their collaboration on each assisted STTR project;
(ii) whether the small business concern or the re- search institution originated any technology relating to the assisted STTR project;
(iii) the length of time it took to negotiate any li- censing agreement between the small business concern and the research institution under each assisted STTR project; and
(iv) how the proceeds from commercialization, marketing, or sale of technology resulting from each assisted STTR project were allocated (by percentage) between the small business concern and the research institution; and
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(F) for each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency, whether the small business concern—
(i) has venture capital, hedge fund, or private eq- uity firm investment and, if so, whether the small business concern is registered as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms as required under sub- section (dd)(3);
(ii) is owned by a woman or has a woman as a principal investigator;
(iii) is owned by a socially or economically dis- advantaged individual or has a socially or economi- cally disadvantaged individual as a principal investi- gator;
(iv) is owned by a faculty member or a student of an institution of higher education, as that term is de- fined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or
(v) received assistance under the Federal and State Technology Partnership Program (FAST Pro- gram).
(2) GOVERNMENT DATABASE.—Not later than 90 days after the date of enactment of the SBIR/STTR Reauthorization Act of 2011, the Administrator, in consultation with Federal agen- cies required to have an SBIR program pursuant to subsection (f)(1) or an STTR program pursuant to subsection (n)(1), shall develop and maintain a database to be used exclusively for SBIR and STTR program evaluation that—
(A) contains for each small business concern that ap- plies for, submits a proposal for, or receives an award under Phase I or Phase II of the SBIR program or the STTR program—
(i) the name, size, and location of, and the identi- fying number assigned by the Administration to, the small business concern;
(ii) an abstract of the applicable project; (iii) the specific aims of the project; (iv) the number of employees of the small business
concern; (v) the names and titles of the key individuals
that will carry out the project, the position each key individual holds in the small business concern, and contact information for each key individual;
(vi) the percentage of effort each individual de- scribed in clause (v) will contribute to the project;
(vii) whether the small business concern is major- ity-owned by multiple venture capital operating com- panies, hedge funds, or private equity firms; and
(viii) the Federal agency to which the application is made and contact information for the person or of- fice within the Federal agency that is responsible for reviewing applications and making awards under the SBIR program or the STTR program;
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(B) contains for each Phase II award made by a Fed- eral agency—
(i) information collected in accordance with para- graph (3) on revenue from the sale of new products or services resulting from the research conducted under the award;
(ii) information collected in accordance with para- graph (3) on additional investment from any source, other than Phase I or Phase II SBIR or STTR awards, to further the research and development conducted under the award; and
(iii) any other information received in connection with the award that the Administrator, in conjunction with the SBIR and STTR program managers of Fed- eral agencies, considers relevant and appropriate; (C) includes any narrative information that a small
business concern receiving a Phase II award voluntarily submits to further describe the outputs and outcomes of its awards;
(D) includes, for each awardee— (i) the name, size, and location of, and any identi-
fying number assigned by the Administrator to, the awardee;
(ii) whether the awardee has venture capital, hedge fund, or private equity firm investment and, if so—
(I) the amount of venture capital, hedge fund, or private equity firm investment as of the date of the award;
(II) the percentage of ownership of the award- ee held by a venture capital operating company, hedge fund, or private equity firm, including whether the awardee is majority-owned by mul- tiple venture capital operating companies, hedge funds, or private equity firms; and
(III) the amount of additional capital that the awardee has invested in the SBIR or STTR tech- nology, which information shall be collected on an annual basis; (iii) the names and locations of any affiliates of
the awardee; (iv) the number of employees of the awardee; (v) the number of employees of the affiliates of the
awardee; and (vi) the names of, and the percentage of ownership
of the awardee held by— (I) any individual who is not a citizen of the
United States or a lawful permanent resident of the United States; or
(II) any person that is not an individual and is not organized under the laws of a State or the United States;
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(E) includes any other data collected by or available to any Federal agency that such agency considers may be useful for SBIR or STTR program evaluation;
(F) is available for use solely for program evaluation purposes by the Federal Government or, in accordance with policy directives issued by the Administration, by other authorized persons who are subject to a use and non- disclosure agreement with the Federal Government cov- ering the use of the database; and
(G) includes a timely and accurate list of any indi- vidual or small business concern that has participated in the SBIR program or STTR program that has been—
(i) convicted of a fraud-related crime involving funding received under the SBIR program or STTR program; or
(ii) found civilly liable for a fraud-related violation involving funding received under the SBIR program or STTR program.
(3) UPDATING INFORMATION FOR DATABASE.— (A) IN GENERAL.—A small business concern applying
for a Phase II award under this section shall be required to update information in the database established under this subsection for any prior Phase II award received by that small business concern. In complying with this para- graph, a small business concern may apportion sales or ad- ditional investment information relating to more than one Phase II award among those awards, if it notes the appor- tionment for each award.
(B) ANNUAL UPDATES UPON TERMINATION.—A small business concern receiving a Phase II award under this section shall—
(i) update information in the database concerning that award at the termination of the award period; and
(ii) be requested to voluntarily update such infor- mation annually thereafter for a period of 5 years. (C) GOVERNMENT DATABASE.—Not later than 60 days
after the date established by a Federal agency for submit- ting applications or proposals for a Phase I or Phase II award under the SBIR program or STTR program, the head of the Federal agency shall submit to the Adminis- trator the data required under paragraph (2) with respect to each small business concern that applies or submits a proposal for the Phase I or Phase II award. (4) PROTECTION OF INFORMATION.—Information provided
under paragraph (2) shall be considered privileged and con- fidential and not subject to disclosure pursuant to section 552 of title 5, United States Code.
(5) RULE OF CONSTRUCTION.—Inclusion of information in the database under this subsection shall not be considered to be publication for purposes of subsection (a) or (b) of section 102 of title 35, United States Code.
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(l) REPORTING OF AWARDS MADE FROM SINGLE PROPOSAL, TO MULTIPLE AWARD WINNERS, OR TO CRITICAL TECHNOLOGY TOP- ICS.—
(1) SINGLE PROPOSAL.—If a Federal agency required to es- tablish an SBIR program under subsection (f) makes an award with respect to an SBIR solicitation topic or subtopic for which the agency received only 1 proposal, the agency shall provide written justification for making the award in its next quarterly report to the Administration and in the agency’s next annual report required under subsection (g)(8).
(2) MULTIPLE AWARDS.—An agency referred to in para- graph (1) shall include in its next annual report required under subsection (g)(8) an accounting of the awards the agency has made for Phase I of an SBIR program during the reporting pe- riod to entities that have received more than 15 awards for the Phase II of an SBIR program during the preceding 5 fiscal years.
(3) CRITICAL TECHNOLOGY AWARDS.—An agency referred to in paragraph (1) shall include in its next annual report re- quired under subsection (g)(8), an accounting of the number of awards it has made to critical technology topics, as defined in subsection (g)(3), including an identification of the specific crit- ical technologies topics, and the percentage by number and dol- lar amount of the agency’s total SBIR awards to such critical technology topics. (m) TERMINATION.—The authorization to carry out the Small
Business Innovation Research Program established under this sec- tion shall terminate on September 30, 2017.
(n) REQUIRED EXPENDITURES FOR STTR BY FEDERAL AGEN- CIES.—
(1) REQUIRED EXPENDITURE AMOUNTS.— (A) IN GENERAL.—With respect to each fiscal year
through fiscal year 2017, each Federal agency that has an extramural budget for research, or research and develop- ment, in excess of $1,000,000,000 for that fiscal year, shall expend with small business concerns not less than the per- centage of that extramural budget specified in subpara- graph (B), specifically in connection with STTR programs that meet the requirements of this section and any policy directives and regulations issued under this section.
(B) EXPENDITURE AMOUNTS.—The percentage of the extramural budget required to be expended by an agency in accordance with subparagraph (A) shall be—
(i) 0.15 percent for each fiscal year through fiscal year 2003;
(ii) 0.3 percent for each of fiscal years 2004 through 2011;
(iii) 0.35 percent for each of fiscal years 2012 and 2013;
(iv) 0.40 percent for each of fiscal years 2014 and 2015; and
(v) 0.45 percent for fiscal year 2016 and each fis- cal year thereafter.
(2) LIMITATIONS.—A Federal agency shall not—
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(A) use any of its STTR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with sala- ries and expenses, or, in the case of a small business con- cern or a research institution, costs associated with sala- ries, expenses, and administrative overhead (other than those direct or indirect costs allowable under guidelines of the Office of Management and Budget and the govern- mentwide Federal Acquisition Regulation issued in accord- ance with section 25(c)(1) of the Office of Federal Procure- ment Policy Act); or
(B) make available for the purpose of meeting the re- quirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentage specified in paragraph (1). (3) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—Fund-
ing agreements with small business concerns for research or research and development which result from competitive or single source selections other than an STTR program shall not be considered to meet any portion of the percentage require- ments of paragraph (1). (o) FEDERAL AGENCY STTR AUTHORITY.—Each Federal agency
required to establish an STTR program in accordance with sub- section (n) and regulations issued under this Act, shall—
(1) unilaterally determine categories of projects to be in- cluded in its STTR program;
(2) issue STTR solicitations in accordance with a schedule determined cooperatively with the Administration;
(3) unilaterally determine research topics within the agen- cy’s STTR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified—
(A) by the National Critical Technologies Panel (or its successor) in reports required under section 603 of the Na- tional Science and Technology Policy, Organization, and Priorities Act of 1976; or
(B) by the Secretary of Defense, in accordance with section 2522 of title 10, United States Code; (4)(A) unilaterally receive and evaluate proposals resulting
from STTR solicitations; and (B) make a final decision on each proposal submitted
under the STTR program— (i) not later than 1 year after the date on which the
applicable solicitation closes, if with respect to the Na- tional Institutes of Health or the National Science Founda- tion, or 90 days after the date on which the applicable so- licitation closes, if with respect to any other participating agency; or
(ii) if the Administrator authorizes an extension for a solicitation, not later than 90 days after the date that would be applicable to the agency under clause (i); (5) unilaterally select awardees for its STTR funding
agreements and inform each awardee under such an agree-
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ment, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6) administer its own STTR funding agreements (or dele- gate such administration to another agency);
(7) make payments to recipients of STTR funding agree- ments on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make pay- ment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period begin- ning on the date of the completion of such requirements;
(8) include, as part of its annual performance plan as re- quired by subsections (a) and (b) of section 1115 of title 31, United States Code, a section on its STTR program, and shall submit such section to the Committee on Small Business of the Senate, and the Committee on Science and the Committee on Small Business of the House of Representatives;
(9) collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from applicants and awardees as is necessary to assess the STTR program outputs and out- comes, including information necessary to maintain the data- base described in subsection (k), including—
(A) whether an applicant or awardee— (i) has venture capital, hedge fund, or private eq-
uity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and, if so—
(I) the amount of venture capital, hedge fund, or private equity firm investment that the appli- cant or awardee has received as of the date of the application or award, as applicable; and
(II) the amount of additional capital that the applicant or awardee has invested in the STTR technology; (ii) has an investor that—
(I) is an individual who is not a citizen of the United States or a lawful permanent resident of the United States and, if so, the name of any such individual; or
(II) is a person that is not an individual and is not organized under the laws of a State or the United States and, if so, the name of any such person; (iii) is owned by a woman or has a woman as a
principal investigator; (iv) is owned by a socially or economically dis-
advantaged individual or has a socially or economi- cally disadvantaged individual as a principal investi- gator;
(v) is a faculty member or a student of an institu- tion of higher education, as that term is defined in sec- tion 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or
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(vi) is located in a State in which the total value of contracts awarded to small business concerns under all STTR programs is less than the total value of con- tracts awarded to small business concerns in a major- ity of other States, as determined by the Adminis- trator in biennial fiscal years, beginning with fiscal year 2008, based on the most recent statistics com- piled by the Administrator; (B) if an awardee receives an award in an amount that
is more than the award guidelines under this section, a statement from the agency that justifies the award amount; and
(C) data with respect to the Federal and State Tech- nology Partnership Program (FAST Program); (10) submit an annual report on the STTR program to the
Administration and the Office of Science and Technology Pol- icy;
(11) adopt the agreement developed by the Administrator under subsection (w) as the agency’s model agreement for allo- cating between small business concerns and research institu- tions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(12) develop, in consultation with the Office of Federal Pro- curement Policy and the Office of Government Ethics, proce- dures to ensure that federally funded research and develop- ment centers (as defined in subsection (e)(8)) that participate in STTR agreements—
(A) are free from organizational conflicts of interests relative to the STTR program;
(B) do not use privileged information gained through work performed for an STTR agency or private access to STTR agency personnel in the development of an STTR proposal; and
(C) use outside peer review, as appropriate; (13) not later than July 31, 1993, develop procedures for
assessing the commercial merit and feasibility of STTR pro- posals, as evidenced by—
(A) the small business concern’s record of successfully commercializing STTR or other research;
(B) the existence of Phase II funding commitments from private sector or non-STTR funding sources;
(C) the existence of Phase III follow-on commitments for the subject of the research; and
(D) the presence of other indicators of the commercial potential of the idea; (14) implement an outreach program to research institu-
tions and small business concerns for the purpose of enhancing its STTR program, in conjunction with any such outreach done for purposes of the SBIR program;
(15) provide for and fully implement the tenets of Execu- tive Order No. 13329 (Encouraging Innovation in Manufac- turing); and
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(16) provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tri- bunal concerning the STTR program of the Federal agency. (p) STTR POLICY DIRECTIVE.—
(1) ISSUANCE.—The Administrator shall issue a policy di- rective for the general conduct of the STTR programs within the Federal Government. Such policy directive shall be issued after consultation with—
(A) the heads of each of the Federal agencies required by subsection (n) to establish an STTR program;
(B) the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; and
(C) the Director of the Office of Federal Procurement Policy. (2) CONTENTS.—The policy directive required by paragraph
(1) shall provide for— (A) simplified, standardized, and timely STTR solicita-
tions; (B) a simplified, standardized funding process that
provides for— (i) the timely receipt and review of proposals; (ii) outside peer review, if appropriate; (iii) protection of proprietary information provided
in proposals; (iv) selection of awardees; (v) retention by a small business concern of the
rights to data generated by the concern in the per- formance of an STTR award for a period of not less than 4 years;
(vi) continued use by a small business concern, as a directed bailment, of any property transferred by a Federal agency to the small business concern in Phase II of the STTR program for a period of not less than 2 years, beginning on the initial date of the concern’s participation in Phase III of such program;
(vii) cost sharing; (viii) cost principles and payment schedules; and (ix) 1-year awards for Phase I of an STTR pro-
gram, generally not to exceed $150,000, and 2-year awards for Phase II of an STTR program, generally not to exceed $1,000,000, (each of which the Adminis- trator shall adjust for inflation annually) greater or lesser amounts to be awarded at the discretion of the awarding agency, and shorter or longer periods of time to be approved at the discretion of the awarding agen- cy where appropriate for a particular project; (C) minimizing regulatory burdens associated with
participation in STTR programs; (D) guidelines for a model agreement, to be used by all
agencies, for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
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(E) procedures to ensure that— (i) a recipient of an STTR award is a small busi-
ness concern, as defined in section 3 and the regula- tions promulgated thereunder; and
(ii) such small business concern exercises manage- ment and control of the performance of the STTR funding agreement pursuant to a business plan pro- viding for the commercialization of the technology that is the subject matter of the award; and (F) procedures to ensure, to the extent practicable,
that an agency which intends to pursue research, develop- ment, or production of a technology developed by a small business concern under an STTR program enters into fol- low-on, non-STTR funding agreements with the small busi- ness concern for such research, development, or produc- tion. (3) MODIFICATIONS.—Not later than 120 days after the
date of enactment of this paragraph, the Administrator shall modify the policy directive issued pursuant to this subsection to clarify that the rights provided for under paragraph (2)(B)(v) apply to all Federal funding awards under this section, includ- ing Phase I, Phase II, and Phase III. (q) DISCRETIONARY TECHNICAL ASSISTANCE.—
(1) IN GENERAL.—Each Federal agency required by this section to conduct an SBIR program or STTR program may enter into an agreement with a vendor selected under para- graph (2) to provide small business concerns engaged in SBIR or STTR projects with technical assistance services, such as ac- cess to a network of scientists and engineers engaged in a wide range of technologies, or access to technical and business lit- erature available through on-line data bases, for the purpose of assisting such concerns in—
(A) making better technical decisions concerning such projects;
(B) solving technical problems which arise during the conduct of such projects;
(C) minimizing technical risks associated with such projects; and
(D) developing and commercializing new commercial products and processes resulting from such projects. (2) VENDOR SELECTION.—Each agency may select a vendor
to assist small business concerns to meet the goals listed in paragraph (1) for a term not to exceed 5 years. Such selection shall be competitive and shall utilize merit-based criteria.
(3) ADDITIONAL TECHNICAL ASSISTANCE.— (A) PHASE I.—A Federal agency described in para-
graph (1) may— (i) provide to the recipient of a Phase I SBIR or
STTR award, through a vendor selected under para- graph (2), the services described in paragraph (1), in an amount equal to not more than $5,000 per year; or
(ii) authorize the recipient of a Phase I SBIR or STTR award to purchase the services described in paragraph (1), in an amount equal to not more than
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$5,000 per year, which shall be in addition to the amount of the recipient’s award. (B) PHASE II.—A Federal agency described in para-
graph (1) may— (i) provide to the recipient of a Phase II SBIR or
STTR award, through a vendor selected under para- graph (2), the services described in paragraph (1), in an amount equal to not more than $5,000 per year; or
(ii) authorize the recipient of a Phase II SBIR or STTR award to purchase the services described in paragraph (1), in an amount equal to not more than $5,000 per year, which shall be in addition to the amount of the recipient’s award. (C) FLEXIBILITY.—In carrying out subparagraphs (A)
and (B), each Federal agency shall provide the allowable amounts to a recipient that meets the eligibility require- ments under the applicable subparagraph, if the recipient requests to seek technical assistance from an individual or entity other than the vendor selected under paragraph (2) by the Federal agency.
(D) LIMITATION.—A Federal agency may not— (i) use the amounts authorized under subpara-
graph (A) or (B) unless the vendor selected under paragraph (2) provides the technical assistance to the recipient; or
(ii) enter a contract with a vendor under para- graph (2) under which the amount provided for tech- nical assistance is based on total number of Phase I or Phase II awards.
(r) PHASE III AGREEMENTS.— (1) IN GENERAL.—In the case of a small business concern
that is awarded a funding agreement for Phase II of an SBIR or STTR program, a Federal agency may enter into a Phase III agreement with that business concern for additional work to be performed during or after the Phase II period. The Phase II funding agreement with the small business concern may, at the discretion of the agency awarding the agreement, set out the procedures applicable to Phase III agreements with that agency or any other agency.
(2) DEFINITION.—In this subsection, the term ‘‘Phase III agreement’’ means a follow-on, non-SBIR or non-STTR funded contract as described in paragraph (4)(C) or paragraph (6)(C) of subsection (e).
(3) INTELLECTUAL PROPERTY RIGHTS.—Each funding agree- ment under an SBIR or STTR program shall include provisions setting forth the respective rights of the United States and the small business concern with respect to intellectual property rights and with respect to any right to carry out follow-on re- search.
(4) PHASE III AWARDS.—To the greatest extent practicable, Federal agencies and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that devel- oped the technology.
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(s) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR PROGRAMS.—All funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection procedures.
(t) INCLUSION IN STRATEGIC PLANS.—Program information re- lating to the SBIR and STTR programs shall be included by each Federal agency in any update or revision required of the Federal agency under section 306(b) of title 5, United States Code.
(u) COORDINATION OF TECHNOLOGY DEVELOPMENT PRO- GRAMS.—
(1) DEFINITION OF TECHNOLOGY DEVELOPMENT PROGRAM.— In this subsection, the term ‘‘technology development program’’ means—
(A) the Experimental Program to Stimulate Competi- tive Research of the National Science Foundation, as es- tablished under section 113 of the National Science Foun- dation Authorization Act of 1988 (42 U.S.C. 1862g);
(B) the Defense Experimental Program to Stimulate Competitive Research of the Department of Defense;
(C) the Experimental Program to Stimulate Competi- tive Research of the Department of Energy;
(D) the Experimental Program to Stimulate Competi- tive Research of the Environmental Protection Agency;
(E) the Experimental Program to Stimulate Competi- tive Research of the National Aeronautics and Space Ad- ministration;
(F) the Institutional Development Award Program of the National Institutes of Health; and
(G) the National Research Initiative Competitive Grants Program of the Department of Agriculture. (2) COORDINATION REQUIREMENTS.—Each Federal agency
that is subject to subsection (f) and that has established a tech- nology development program may, in each fiscal year, review for funding under that technology development program—
(A) any proposal to provide outreach and assistance to one or more small business concerns interested in partici- pating in the SBIR program, including any proposal to make a grant or loan to a company to pay a portion or all of the cost of developing an SBIR proposal, from an entity, organization, or individual located in—
(i) a State that is eligible to participate in that program; or
(ii) a State described in paragraph (3); or (B) any proposal for Phase I of the SBIR program, if
the proposal, though meritorious, is not funded through the SBIR program for that fiscal year due to funding re- straints, from a small business concern located in—
(i) a State that is eligible to participate in a tech- nology development program; or
(ii) a State described in paragraph (3). (3) ADDITIONALLY ELIGIBLE STATE.—A State referred to in
subparagraph (A)(ii) or (B)(ii) of paragraph (2) is a State in which the total value of contracts awarded to small business concerns under all SBIR programs is less than the total value
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of contracts awarded to small business concerns in a majority of other States, as determined by the Administrator in biennial fiscal years, beginning with fiscal year 2000, based on the most recent statistics compiled by the Administrator. (v) REDUCING PAPERWORK AND COMPLIANCE BURDEN.—
(1) STANDARDIZATION OF REPORTING REQUIREMENTS.—The Administrator shall work with the Federal agencies required by this section to have an SBIR or STTR program to stand- ardize reporting requirements for the collection of data from SBIR or STTR applicants and awardees, including data for in- clusion in the database under subsection (k), taking into con- sideration the unique needs of each agency, and to the extent possible, permitting the updating of previously reported infor- mation by electronic means. Such requirements shall be de- signed to minimize the burden on small businesses.
(2) SIMPLIFICATION OF APPLICATION AND AWARD PROCESS.— Not later than 1 year after the date of enactment of this para- graph, and after a period of public comment, the Administrator shall issue regulations or guidelines, taking into consideration the unique needs of each Federal agency, to ensure that each Federal agency required to carry out an SBIR program or STTR program simplifies and standardizes the program pro- posal, selection, contracting, compliance, and audit procedures for the SBIR program or STTR program of the Federal agency (including procedures relating to overhead rates for applicants and documentation requirements) to reduce the paperwork and regulatory compliance burden on small business concerns ap- plying to and participating in the SBIR program or STTR pro- gram. (w) STTR MODEL AGREEMENT FOR INTELLECTUAL PROPERTY
RIGHTS.— (1) IN GENERAL.—The Administrator shall promulgate reg-
ulations establishing a single model agreement for use in the STTR program that allocates between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization.
(2) OPPORTUNITY FOR COMMENT.—In promulgating regula- tions under paragraph (1), the Administrator shall provide to affected agencies, small business concerns, research institu- tions, and other interested parties the opportunity to submit written comments. (x) RESEARCH AND DEVELOPMENT FOCUS.—
(1) REVISION AND UPDATE OF CRITERIA AND PROCEDURES OF IDENTIFICATION.—In carrying out subsection (g), the Secretary of Defense shall, not less often than once every 4 years, revise and update the criteria and procedures utilized to identify areas of the research and development efforts of the Depart- ment of Defense which are suitable for the provision of funds under the Small Business Innovation Research Program and the Small Business Technology Transfer Program.
(2) UTILIZATION OF PLANS.—The criteria and procedures described in paragraph (1) shall be developed through the use of the most current versions of the following plans:
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(A) The Joint Warfighting Science and Technology Plan required under section 270 of the National Defense Authorization Act for Fiscal Year 1997 (Public Law 104– 201; 10 U.S.C. 2501 note).
(B) The Defense Technology Area Plan of the Depart- ment of Defense.
(C) The Basic Research Plan of the Department of De- fense. (3) INPUT IN IDENTIFICATION OF AREAS OF EFFORT.—The
criteria and procedures described in paragraph (1) shall in- clude input in the identification of areas of research and devel- opment efforts described in that paragraph from Department of Defense program managers (PMs) and program executive offi- cers (PEOs). (y) COMMERCIALIZATION READINESS PROGRAM.—
(1) IN GENERAL.—The Secretary of Defense and the Sec- retary of each military department is authorized to create and administer a ‘‘Commercialization Readiness Program’’ to accel- erate the transition of technologies, products, and services de- veloped under the Small Business Innovation Research Pro- gram or Small Business Technology Transfer Program to Phase III, including the acquisition process. The authority to create and administer a Commercialization Readiness Program under this subsection may not be construed to eliminate or re- place any other SBIR program or STTR program that enhances the insertion or transition of SBIR or STTR technologies, in- cluding any such program in effect on the date of enactment of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163; 119 Stat. 3136).
(2) IDENTIFICATION OF RESEARCH PROGRAMS FOR ACCELER- ATED TRANSITION TO ACQUISITION PROCESS.—In carrying out the Commercialization Readiness Program, the Secretary of Defense and the Secretary of each military department shall identify research programs of the Small Business Innovation Research Program or Small Business Technology Transfer Pro- gram that have the potential for rapid transitioning to Phase III and into the acquisition process.
(3) LIMITATION.—No research program may be identified under paragraph (2) unless the Secretary of the military de- partment concerned certifies in writing that the successful transition of the program to Phase III and into the acquisition process is expected to meet high priority military requirements of such military department.
(4) FUNDING.—For payment of expenses incurred to admin- ister the Commercialization Readiness Program under this subsection, the Secretary of Defense and each Secretary of a military department is authorized to use not more than an amount equal to 1 percent of the funds available to the Depart- ment of Defense or the military department pursuant to the Small Business Innovation Research Program. Such funds shall not be used to make Phase III awards.
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øNote: Effective on the first day of the fourth full fiscal year fol- lowing the date of enactment of this Act, section 5141(b)(3)(B) of di- vision E of Public Law 112–81 (date of enactment is December 31, 2011), as amended by section 1615(b) of division A of Public Law 112–239, provides for an amendment to amend paragraph (4) to read as follows:¿
(4) FUNDING.— (A) IN GENERAL.—The Secretary of Defense and each
Secretary of a military department may use not more than an amount equal to 1 percent of the funds available to the Department of Defense or the military department pursuant to the Small Business Innovation Research Program for payment of expenses incurred to administer the Commer- cialization Readiness Program under this subsection.
(B) LIMITATIONS.—The funds described in subpara- graph (A)—
(i) shall not be subject to the limitations on the use of funds in subsection (f)(2); and
(ii) shall not be used to make Phase III awards.
(5) INSERTION INCENTIVES.—For any contract with a value of not less than $100,000,000, the Secretary of Defense is au- thorized to—
(A) establish goals for the transition of Phase III tech- nologies in subcontracting plans; and
(B) require a prime contractor on such a contract to re- port the number and dollar amount of contracts entered into by that prime contractor for Phase III SBIR or STTR projects. (6) GOAL FOR SBIR AND STTR TECHNOLOGY INSERTION.—The
Secretary of Defense shall— (A) set a goal to increase the number of Phase II SBIR
contracts and the number of Phase II STTR contracts awarded by the Secretary that lead to technology transi- tion into programs of record or fielded systems;
(B) use incentives in effect on the date of enactment of the SBIR/STTR Reauthorization Act of 2011, or create new incentives, to encourage agency program managers and prime contractors to meet the goal under subpara- graph (A); and
(C) submit to the Administrator for inclusion in the annual report under subsection (b)(7)—
(i) the number and percentage of Phase II SBIR and STTR contracts awarded by the Secretary that led to technology transition into programs of record or fielded systems;
(ii) information on the status of each project that received funding through the Commercialization Read- iness Program and efforts to transition those projects into programs of record or fielded systems; and
(iii) a description of each incentive that has been used by the Secretary under subparagraph (B) and the
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effectiveness of that incentive with respect to meeting the goal under subparagraph (A).
(z) ENCOURAGING INNOVATION IN ENERGY EFFICIENCY.— (1) FEDERAL AGENCY ENERGY-RELATED PRIORITY.—In car-
rying out its duties under this section relating to SBIR and STTR solicitations by Federal departments and agencies, the Administrator shall—
(A) ensure that such departments and agencies give high priority to small business concerns that participate in or conduct energy efficiency or renewable energy system research and development projects; and
(B) include in the annual report to Congress under subsection (b)(7) a determination of whether the priority described in subparagraph (A) is being carried out. (2) CONSULTATION REQUIRED.—The Administrator shall
consult with the heads of other Federal departments and agen- cies in determining whether priority has been given to small business concerns that participate in or conduct energy effi- ciency or renewable energy system research and development projects, as required by this subsection.
(3) GUIDELINES.—The Administrator shall, as soon as is practicable after the date of enactment of this subsection, issue guidelines and directives to assist Federal agencies in meeting the requirements of this subsection.
(4) DEFINITIONS.—In this subsection— (A) the term ‘‘biomass’’—
(i) means any organic material that is available on a renewable or recurring basis, including—
(I) agricultural crops; (II) trees grown for energy production; (III) wood waste and wood residues; (IV) plants (including aquatic plants and
grasses); (V) residues; (VI) fibers; (VII) animal wastes and other waste mate-
rials; and (VIII) fats, oils, and greases (including recy-
cled fats, oils, and greases); and (ii) does not include—
(I) paper that is commonly recycled; or (II) unsegregated solid waste;
(B) the term ‘‘energy efficiency project’’ means the in- stallation or upgrading of equipment that results in a sig- nificant reduction in energy usage; and
(C) the term ‘‘renewable energy system’’ means a sys- tem of energy derived from—
(i) a wind, solar, biomass (including biodiesel), or geothermal source; or
(ii) hydrogen derived from biomass or water using an energy source described in clause (i).
(aa) LIMITATION ON SIZE OF AWARDS.— (1) LIMITATION.—No Federal agency may issue an award
under the SBIR program or the STTR program if the size of
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the award exceeds the award guidelines established under this section by more than 50 percent.
(2) MAINTENANCE OF INFORMATION.—Participating agen- cies shall maintain information on awards exceeding the guide- lines established under this section, including—
(A) the amount of each award; (B) a justification for exceeding the guidelines for each
award; (C) the identity and location of each award recipient;
and (D) whether an award recipient has received any ven-
ture capital, hedge fund, or private equity firm investment and, if so, whether the recipient is majority-owned by mul- tiple venture capital operating companies, hedge funds, or private equity firms. (3) REPORTS.—The Administrator shall include the infor-
mation described in paragraph (2) in the annual report of the Administrator to Congress.
(4) WAIVER FOR SPECIFIC TOPIC.—Upon the receipt of an application from a Federal agency, the Administrator may grant a waiver from the requirement under paragraph (1) with respect to a specific topic (but not for the agency as a whole) for a fiscal year if the Administrator determines, based on the information contained in the application from the agency, that—
(A) the requirement under paragraph (1) will interfere with the ability of the agency to fulfill its research mission through the SBIR program or the STTR program; and
(B) the agency will minimize, to the maximum extent possible, the number of awards that do not satisfy the re- quirement under paragraph (1) to preserve the nature and intent of the SBIR program and the STTR program. (5) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to prevent a Federal agency from supplementing an award under the SBIR program or the STTR program using funds of the Federal agency that are not part of the SBIR program or the STTR program of the Federal agency. (bb) SUBSEQUENT PHASE II AWARDS.—
(1) AGENCY FLEXIBILITY.—A small business concern that received a Phase I award from a Federal agency under this section shall be eligible to receive a subsequent Phase II award from another Federal agency, if the head of each relevant Fed- eral agency or the relevant component of the Federal agency makes a written determination that the topics of the relevant awards are the same and both agencies report the awards to the Administrator for inclusion in the public database under subsection (k).
(2) SBIR AND STTR PROGRAM FLEXIBILITY.—A small busi- ness concern that received a Phase I award under this section under the SBIR program or the STTR program may receive a subsequent Phase II award in either the SBIR program or the STTR program and the participating agency or agencies shall
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report the awards to the Administrator for inclusion in the public database under subsection (k).
(3) PREVENTING DUPLICATIVE AWARDS.—The head of a Fed- eral agency shall verify that any activity to be performed with respect to a project with a Phase I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency. (cc) PHASE FLEXIBILITY.—During fiscal years 2012 through
2017, the National Institutes of Health, the Department of De- fense, and the Department of Education may each provide to a small business concern an award under Phase II of the SBIR pro- gram with respect to a project, without regard to whether the small business concern was provided an award under Phase I of an SBIR program with respect to such project, if the head of the applicable agency determines that the small business concern has completed the determinations described in subsection (e)(4)(A) with respect to such project despite not having been provided a Phase I award.
(dd) PARTICIPATION OF SMALL BUSINESS CONCERNS MAJORITY- OWNED BY VENTURE CAPITAL OPERATING COMPANIES, HEDGE FUNDS, OR PRIVATE EQUITY FIRMS IN THE SBIR PROGRAM.—
(1) AUTHORITY.—Upon providing a written determination described in paragraph (2) to the Administrator, the Com- mittee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representa- tives, not later than 30 days before the date on which any such award is made—
(A) the Director of the National Institutes of Health, the Secretary of Energy, and the Director of the National Science Foundation may award not more than 25 percent of the funds allocated for the SBIR program of the applica- ble Federal agency to small business concerns that are owned in majority part by multiple venture capital oper- ating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns; and
(B) the head of a Federal agency other than a Federal agency described in subparagraph (A) that participates in the SBIR program may award not more than 15 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in ma- jority part by multiple venture capital operating compa- nies, hedge funds, or private equity firms through competi- tive, merit-based procedures that are open to all eligible small business concerns. (2) DETERMINATION.—A written determination described in
this paragraph is a written determination by the head of a Federal agency that explains how the use of the authority under paragraph (1) will—
(A) induce additional venture capital, hedge fund, or private equity firm funding of small business innovations;
(B) substantially contribute to the mission of the Fed- eral agency;
(C) demonstrate a need for public research; and
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(D) otherwise fulfill the capital needs of small business concerns for additional financing for SBIR projects. (3) REGISTRATION.—A small business concern that is ma-
jority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and qualified for participa- tion in the program authorized under paragraph (1) shall—
(A) register with the Administrator on the date that the small business concern submits an application for an award under the SBIR program; and
(B) indicate in any SBIR proposal that the small busi- ness concern is registered under subparagraph (A) as ma- jority-owned by multiple venture capital operating compa- nies, hedge funds, or private equity firms. (4) COMPLIANCE.—
(A) IN GENERAL.—The head of a Federal agency that makes an award under this subsection during a fiscal year shall collect and submit to the Administrator data relating to the number and dollar amount of Phase I awards, Phase II awards, and any other category of awards by the Fed- eral agency under the SBIR program during that fiscal year.
(B) ANNUAL REPORTING.—The Administrator shall in- clude as part of each annual report by the Administration under subsection (b)(7) any data submitted under subpara- graph (A) and a discussion of the compliance of each Fed- eral agency that makes an award under this subsection during the fiscal year with the maximum percentages under paragraph (1). (5) ENFORCEMENT.—If a Federal agency awards more than
the percent of the funds allocated for the SBIR program of the Federal agency authorized under paragraph (1) for a purpose described in paragraph (1), the head of the Federal agency shall transfer an amount equal to the amount awarded in ex- cess of the amount authorized under paragraph (1) to the funds for general SBIR programs from the non-SBIR and non- STTR research and development funds of the Federal agency not later than 180 days after the date on which the Federal agency made the award that caused the total awarded under paragraph (1) to be more than the amount authorized under paragraph (1) for a purpose described in paragraph (1).
(6) FINAL DECISIONS ON APPLICATIONS UNDER THE SBIR PROGRAM.—
(A) DEFINITION.—In this paragraph, the term ‘‘covered small business concern’’ means a small business concern that—
(i) was not majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms on the date on which the small business concern submitted an application in response to a so- licitation under the SBIR programs; and
(ii) on the date of the award under the SBIR pro- gram is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
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(B) IN GENERAL.—If a Federal agency does not make an award under a solicitation under the SBIR program be- fore the date that is 9 months after the date on which the period for submitting applications under the solicitation ends—
(i) a covered small business concern is eligible to receive the award, without regard to whether the cov- ered small business concern meets the requirements for receiving an award under the SBIR program for a small business concern that is majority-owned by mul- tiple venture capital operating companies, hedge funds, or private equity firms, if the covered small business concern meets all other requirements for such an award; and
(ii) the head of the Federal agency shall transfer an amount equal to any amount awarded to a covered small business concern under the solicitation to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency, not later than 90 days after the date on which the Federal agency makes the award.
(7) EVALUATION CRITERIA.—A Federal agency may not use investment of venture capital or investment from hedge funds or private equity firms as a criterion for the award of contracts under the SBIR program or STTR program. (ee) COLLABORATING WITH FEDERAL LABORATORIES AND RE-
SEARCH AND DEVELOPMENT CENTERS.— (1) AUTHORIZATION.—Subject to the limitations under this
section, the head of each participating Federal agency may make SBIR and STTR awards to any eligible small business concern that—
(A) intends to enter into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award; or
(B) has entered into a cooperative research and devel- opment agreement (as defined in section 12(d) of the Ste- venson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a(d))) with a Federal laboratory. (2) PROHIBITION.—No Federal agency shall—
(A) condition an SBIR or STTR award upon entering into agreement with any Federal laboratory or any feder- ally funded laboratory or research and development center for any portion of the activities to be performed under that award;
(B) approve an agreement between a small business concern receiving an SBIR or STTR award and a Federal laboratory or federally funded laboratory or research and development center, if the small business concern performs a lesser portion of the activities to be performed under that award than required by this section and by the SBIR Policy Directive and the STTR Policy Directive of the Ad- ministrator; or
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(C) approve an agreement that violates any provision, including any data rights protections provision, of this sec- tion or the SBIR and the STTR Policy Directives. (3) IMPLEMENTATION.—Not later than 180 days after the
date of enactment of this subsection, the Administrator shall modify the SBIR Policy Directive and the STTR Policy Direc- tive issued under this section to ensure that small business concerns—
(A) have the flexibility to use the resources of the Fed- eral laboratories or federally funded research and develop- ment centers; and
(B) are not mandated to enter into agreement with any Federal laboratory or any federally funded laboratory or research and development center as a condition of an award. (4) ADVANCE PAYMENT.—If a small business concern receiv-
ing an award under this section enters into an agreement with a Federal laboratory or federally funded research and develop- ment center for portions of the activities to be performed under that award, the Federal laboratory or federally funded re- search and development center may not require advance pay- ment from the small business concern in an amount greater than the amount necessary to pay for 30 days of such activi- ties. (ff) ADDITIONAL SBIR AND STTR AWARDS.—
(1) EXPRESS AUTHORITY FOR AWARDING A SEQUENTIAL PHASE II AWARD.—A small business concern that receives a Phase II SBIR award or a Phase II STTR award for a project remains eligible to receive 1 additional Phase II SBIR award or Phase II STTR award for continued work on that project.
(2) PREVENTING DUPLICATIVE AWARDS.—The head of a Fed- eral agency shall verify that any activity to be performed with respect to a project with a Phase I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency. (gg) PILOT PROGRAM.—
(1) AUTHORIZATION.—The head of each covered Federal agency may allocate not more than 10 percent of the funds al- located to the SBIR program and the STTR program of the cov- ered Federal agency—
(A) for awards for technology development, testing, evaluation, and commercialization assistance for SBIR and STTR Phase II technologies; or
(B) to support the progress of research, research and development, and commercialization conducted under the SBIR or STTR programs to Phase III. (2) APPLICATION BY FEDERAL AGENCY.—
(A) IN GENERAL.—A covered Federal agency may not establish a pilot program unless the covered Federal agen- cy makes a written application to the Administrator, not later than 90 days before the first day of the fiscal year in which the pilot program is to be established, that describes a compelling reason that additional investment in SBIR or STTR technologies is necessary, including unusually high
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regulatory, systems integration, or other costs relating to development or manufacturing of identifiable, highly prom- ising small business technologies or a class of such tech- nologies expected to substantially advance the mission of the agency.
(B) DETERMINATION.—The Administrator shall— (i) make a determination regarding an application
submitted under subparagraph (A) not later than 30 days before the first day of the fiscal year for which the application is submitted;
(ii) publish the determination in the Federal Reg- ister; and
(iii) make a copy of the determination and any re- lated materials available to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Rep- resentatives.
(3) MAXIMUM AMOUNT OF AWARD.—The head of a covered Federal agency may not make an award under a pilot program in excess of 3 times the dollar amounts generally established for Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix).
(4) REGISTRATION.—Any applicant that receives an award under a pilot program shall register with the Administrator in a registry that is available to the public.
(5) AWARD CRITERIA OR CONSIDERATION.—When making an award under this section, the head of a covered Federal agency shall give consideration to whether the technology to be sup- ported by the award is likely to be manufactured in the United States.
(6) REPORT.—The head of each covered Federal agency shall include in the annual report of the covered Federal agen- cy to the Administrator an analysis of the various activities considered for inclusion in the pilot program of the covered Federal agency and a statement of the reasons why each activ- ity considered was included or not included, as the case may be.
(7) TERMINATION.—The authority to establish a pilot pro- gram under this section expires at the end of fiscal year 2017.
(8) DEFINITIONS.—In this subsection— (A) the term ‘‘covered Federal agency’’—
(i) means a Federal agency participating in the SBIR program or the STTR program; and
(ii) does not include the Department of Defense; and (B) the term ‘‘pilot program’’ means each program es-
tablished under paragraph (1). (hh) TIMING OF RELEASE OF FUNDING.—Federal agencies par-
ticipating in the SBIR program or STTR program shall, to the ex- tent possible, attempt to shorten the amount of time between the provision of notice of an award under the SBIR program or STTR program and the subsequent release of funding with respect to the award.
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(ii) REPORTING ON TIMING.—Federal agencies participating in the SBIR program or STTR program shall provide to the Adminis- trator, for the annual report on the SBIR and STTR program under subsection (b)(7), the average amount of time the agency takes to make a final decision on proposals submitted under such programs, the average amount of time the agency takes to release funding with respect to an award under such programs, and the goals es- tablished to reduce such amounts.
(jj) PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PRO- GRAM.—
(1) IN GENERAL.—The Director of the National Institutes of Health may use $5,000,000 of the funds allocated under sub- section (n)(1) for a Proof of Concept Partnership pilot program to accelerate the creation of small businesses and the commer- cialization of research innovations from qualifying institutions. To implement this program, the Director shall award, through a competitive, merit-based process, grants to qualifying institu- tions. These grants shall only be used to administer Proof of Concept Partnership awards in conformity with this sub- section.
(2) DEFINITIONS.—In this subsection— (A) the term ‘‘Director’’ means the Director of the Na-
tional Institutes of Health; (B) the term ‘‘pilot program’’ refers to the Proof of Con-
cept Partnership pilot program; and (C) the terms ‘‘qualifying institution’’ and ‘‘institution’’
mean a university or other research institution that par- ticipates in the National Institutes of Health’s STTR pro- gram. (3) PROOF OF CONCEPT PARTNERSHIPS.—
(A) IN GENERAL.—A Proof of Concept Partnership shall be set up by a qualifying institution to award grants to in- dividual researchers. These grants should provide re- searchers with the initial investment and the resources to support the proof of concept work and commercialization mentoring needed to translate promising research projects and technologies into a viable company. This work may in- clude technical validations, market research, clarifying in- tellectual property rights position and strategy, and inves- tigating commercial or business opportunities.
(B) AWARD GUIDELINES.—The administrator of a Proof of Concept Partnership program shall award grants in ac- cordance with the following guidelines:
(i) The Proof of Concept Partnership shall use a market-focused project management oversight process, including—
(I) a rigorous, diverse review board comprised of local experts in translational and proof of con- cept research, including industry, start-up, ven- ture capital, technical, financial, and business ex- perts and university technology transfer officials;
(II) technology validation milestones focused on market feasibility;
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(III) simple reporting effective at redirecting projects; and
(IV) the willingness to reallocate funding from failing projects to those with more potential. (ii) Not more than $100,000 shall be awarded to-
wards an individual proposal. (C) EDUCATIONAL RESOURCES AND GUIDANCE.—The ad-
ministrator of a Proof of Concept Partnership program shall make educational resources and guidance available to researchers attempting to commercialize their innova- tions. (4) AWARDS.—
(A) SIZE OF AWARD.—The Director may make awards to a qualifying institution for up to $1,000,000 per year for up to 3 years.
(B) AWARD CRITERIA.—In determining which quali- fying institutions receive pilot program grants, the Direc- tor shall consider, in addition to any other criteria the Di- rector determines necessary, the extent to which qualifying institutions—
(i) have an established and proven technology transfer or commercialization office and have a plan for engaging that office in the program’s implementa- tion;
(ii) have demonstrated a commitment to local and regional economic development;
(iii) are located in diverse geographies and are of diverse sizes;
(iv) can assemble project management boards com- prised of industry, start-up, venture capital, technical, financial, and business experts;
(v) have an intellectual property rights strategy or office; and
(vi) demonstrate a plan for sustainability beyond the duration of the funding award.
(5) LIMITATIONS.—The funds for the pilot program shall not be used—
(A) for basic research, but to evaluate the commercial potential of existing discoveries, including—
(i) proof of concept research or prototype develop- ment; and
(ii) activities that contribute to determining a project’s commercialization path, to include technical validations, market research, clarifying intellectual property rights, and investigating commercial and business opportunities; or (B) to fund the acquisition of research equipment or
supplies unrelated to commercialization activities. (6) EVALUATIVE REPORT.—The Director shall submit to the
Committee on Science, Space, and Technology and the Com- mittee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate an evaluative report regarding the activities of the pilot program. The report shall include—
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(A) a detailed description of the institutional and pro- posal selection process;
(B) an accounting of the funds used in the pilot pro- gram;
(C) a detailed description of the pilot program, includ- ing incentives and activities undertaken by review board experts;
(D) a detailed compilation of results achieved by the pilot program, including the number of small business con- cerns included and the number of business packages devel- oped, and the number of projects that progressed into sub- sequent STTR phases; and
(E) an analysis of the program’s effectiveness with supporting data. (7) SUNSET.—The pilot program under this subsection
shall terminate at the end of fiscal year 2017. (kk) PHASE III REPORTING.—The annual SBIR or STTR report
to Congress by the Administration under subsection (b)(7) shall in- clude, for each Phase III award—
(1) the name of the agency or component of the agency or the non-Federal source of capital making the Phase III award;
(2) the name of the small business concern or individual receiving the Phase III award; and
(3) the dollar amount of the Phase III award. (ll) CONSENT TO RELEASE CONTACT INFORMATION TO ORGANIZA-
TIONS.— (1) ENABLING CONCERN TO GIVE CONSENT.—Each Federal
agency required by this section to conduct an SBIR program or an STTR program shall enable a small business concern that is an SBIR applicant or an STTR applicant to indicate to the Federal agency whether the Federal agency has the consent of the concern to—
(A) identify the concern to appropriate local and State- level economic development organizations as an SBIR ap- plicant or an STTR applicant; and
(B) release the contact information of the concern to such organizations. (2) RULES.—The Administrator shall establish rules to im-
plement this subsection. The rules shall include a requirement that a Federal agency include in the SBIR and STTR applica- tion a provision through which the applicant can indicate con- sent for purposes of paragraph (1). (mm) ASSISTANCE FOR ADMINISTRATIVE, OVERSIGHT, AND CON-
TRACT PROCESSING COSTS.— (1) IN GENERAL.—Subject to paragraph (3), for the 3 fiscal
years beginning after the date of enactment of this subsection, the Administrator shall allow each Federal agency required to conduct an SBIR program to use not more than 3 percent of the funds allocated to the SBIR program of the Federal agency for—
(A) the administration of the SBIR program or the STTR program of the Federal agency;
(B) the provision of outreach and technical assistance relating to the SBIR program or STTR program of the Fed-
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eral agency, including technical assistance site visits, per- sonnel interviews, and national conferences;
(C) the implementation of commercialization and out- reach initiatives that were not in effect on the date of en- actment of this subsection;
(D) carrying out the program under subsection (y); (E) activities relating to oversight and congressional
reporting, including waste, fraud, and abuse prevention ac- tivities;
(F) targeted reviews of recipients of awards under the SBIR program or STTR program of the Federal agency that the head of the Federal agency determines are at high risk for fraud, waste, or abuse to ensure compliance with requirements of the SBIR program or STTR program, re- spectively;
(G) the implementation of oversight and quality con- trol measures, including verification of reports and in- voices and cost reviews;
(H) carrying out subsection (dd); (I) contract processing costs relating to the SBIR pro-
gram or STTR program of the Federal agency; and (J) funding for additional personnel and assistance
with application reviews. (2) OUTREACH AND TECHNICAL ASSISTANCE.—
(A) IN GENERAL.—Except as provided in subparagraph (B), a Federal agency participating in the program under this subsection shall use a portion of the funds authorized for uses under paragraph (1) to carry out the policy direc- tive required under subsection (j)(2)(F) and to increase the participation of States with respect to which a low level of SBIR awards have historically been awarded.
(B) WAIVER.—A Federal agency may request the Ad- ministrator to waive the requirement contained in sub- paragraph (A). Such request shall include an explanation of why the waiver is necessary. The Administrator may grant the waiver based on a determination that the agency has demonstrated a sufficient need for the waiver, that the outreach objectives of the agency are being met, and that there is increased participation by States with respect to which a low level of SBIR awards have historically been awarded. (3) PERFORMANCE CRITERIA.—A Federal agency may not
use funds as authorized under paragraph (1) until after the ef- fective date of performance criteria, which the Administrator shall establish, to measure any benefits of using funds as au- thorized under paragraph (1) and to assess continuation of the authority under paragraph (1).
(4) RULES.—Not later than 180 days after the date of en- actment of this subsection, the Administrator shall issue rules to carry out this subsection.
(5) COORDINATION WITH IG.—Each Federal agency shall co- ordinate the activities funded under subparagraph (E), (F), or (G) of paragraph (1) with their respective Inspectors General, when appropriate, and each Federal agency that allocates more
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than $50,000,000 to the SBIR program of the Federal agency for a fiscal year may share such funding with its Inspector General when the Inspector General performs such activities.
(6) REPORTING.—The Administrator shall collect data and provide to the Committee on Small Business and Entrepre- neurship of the Senate and the Committee on Small Business, the Committee on Science, Space, and Technology, and the Committee on Appropriations of the House of Representatives a report on the use of funds under this subsection, including funds used to achieve the objectives of paragraph (2)(A) and any use of the waiver authority under paragraph (2)(B). (nn) ANNUAL REPORT ON SBIR AND STTR PROGRAM GOALS.—
(1) DEVELOPMENT OF METRICS.—The head of each Federal agency required to participate in the SBIR program or the STTR program shall develop metrics to evaluate the effective- ness and the benefit to the people of the United States of the SBIR program and the STTR program of the Federal agency that—
(A) are science-based and statistically driven; (B) reflect the mission of the Federal agency; and (C) include factors relating to the economic impact of
the programs. (2) EVALUATION.—The head of each Federal agency de-
scribed in paragraph (1) shall conduct an annual evaluation using the metrics developed under paragraph (1) of—
(A) the SBIR program and the STTR program of the Federal agency; and
(B) the benefits to the people of the United States of the SBIR program and the STTR program of the Federal agency. (3) REPORT.—
(A) IN GENERAL.—The head of each Federal agency de- scribed in paragraph (1) shall submit to the appropriate committees of Congress and the Administrator an annual report describing in detail the results of an evaluation con- ducted under paragraph (2).
(B) PUBLIC AVAILABILITY OF REPORT.—The head of each Federal agency described in paragraph (1) shall make each report submitted under subparagraph (A) available to the public online.
(C) DEFINITION.—In this paragraph, the term ‘‘appro- priate committees of Congress’’ means—
(i) the Committee on Small Business and Entre- preneurship of the Senate; and
(ii) the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.
(oo) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR PROGRAMS.—All funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection proce- dures.
(pp) LIMITATION ON PILOT PROGRAMS.—
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(1) EXISTING PILOT PROGRAMS.—The Administrator may only carry out a covered pilot program that is in operation on the date of enactment of this subsection during the 3-year pe- riod beginning on such date of enactment.
(2) NEW PILOT PROGRAMS.—The Administrator may only carry out a covered pilot program established after the date of enactment of this subsection—
(A) during the 3-year period beginning on the date on which such program is established; and
(B) if such program does not continue and is not based on, in any manner, a previously established covered pilot program. (3) COVERED PILOT PROGRAM DEFINED.—In this subsection,
the term ‘‘covered pilot program’’ means any initiative, project, innovation, or other activity—
(A) established by the Administrator; (B) relating to an SBIR or STTR program; and (C) not specifically authorized by law.
(qq) MINIMUM STANDARDS FOR PARTICIPATION.— (1) PROGRESS TO PHASE II SUCCESS.—
(A) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMER- CIALIZATION RATE.—Not later than 1 year after the date of enactment of this subsection, the head of each Federal agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appro- priate, the success of small business concerns with re- spect to the receipt of Phase II SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards;
(ii) establish a minimum performance standard for small business concerns with respect to the receipt of Phase II SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether each small business concern that received a Phase I SBIR or STTR award from the agency meets the min- imum performance standard established under clause (ii). (B) CONSEQUENCE OF FAILURE TO MEET MINIMUM COM-
MERCIALIZATION RATE.—If the head of a Federal agency de- termines that a small business concern that received a Phase I SBIR or STTR award from the agency is not meet- ing the minimum performance standard established under subparagraph (A)(ii), such concern may not participate in Phase I (or Phase II if under the authority of subsection (cc)) of the SBIR or STTR program of that agency during the 1-year period beginning on the date on which such de- termination is made. (2) PROGRESS TO PHASE III SUCCESS.—
(A) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMER- CIALIZATION RATE.—Not later than 2 years after the date of enactment of this subsection, the head of each Federal agency participating in the SBIR or STTR program shall—
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(i) establish a system to measure, where appro- priate, the success of small business concerns with re- spect to the receipt of Phase III SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards;
(ii) establish a minimum performance standard for small business concerns with respect to the receipt of Phase III SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether each small business concern that received a Phase I SBIR or STTR award from the agency meets the min- imum performance standard established under clause (ii). (B) CONSEQUENCE OF FAILURE TO MEET MINIMUM COM-
MERCIALIZATION RATE.—If the head of a Federal agency de- termines that a small business concern that received a Phase I SBIR or STTR award from the agency is not meet- ing the minimum performance standard established under subparagraph (A)(ii), such concern may not participate in Phase I (or Phase II if under the authority of subsection (cc)) of the SBIR or STTR program of that agency during the 1-year period beginning on the date on which such de- termination is made. (3) ADMINISTRATION OVERSIGHT.—
(A) APPROVAL AND PUBLICATION OF SYSTEMS AND MIN- IMUM PERFORMANCE STANDARDS.—Each system and min- imum performance standard established under paragraph (1) or paragraph (2) shall be submitted by the head of the applicable Federal agency to the Administrator and shall be subject to the approval of the Administrator. In making a determination with respect to approval, the Adminis- trator shall ensure that the minimum performance stand- ard exceeds a de minimis level. The Administrator shall publish on the Internet Web site of the Administration the systems and minimum performance standards approved.
(B) SUBMISSION OF EVALUATION RESULTS BY AGENCY.— The head of each covered Federal agency shall submit to the Administrator the results of each evaluation conducted under paragraph (1) or paragraph (2). (4) REQUIREMENT OF NOTICE AND COMMENT.—Each system
and minimum performance standard established under para- graph (1) or paragraph (2) and each approval provided by the Administrator under paragraph (3)(A), at least 60 days before becoming effective, shall be preceded by the provision of notice of and an opportunity for public comment on such system, standard, or approval. (rr) PUBLICATION OF CERTAIN INFORMATION.—In order to in-
crease the number of small businesses receiving awards under the SBIR or STTR programs of participating agencies, and to simplify the application process for such awards, the Administrator shall es- tablish and maintain a public Internet Web site on which the Ad- ministrator shall publish such information relating to notice of and application for awards under the SBIR program and STTR program
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of each participating Federal agency as the Administrator deter- mines appropriate.
(ss) REPORT ON ENHANCEMENT OF MANUFACTURING ACTIVI- TIES.—Not later than October 1, 2013, and annually thereafter, the head of each Federal agency that makes more than $50,000,000 in awards under the SBIR and STTR programs of the agency com- bined shall submit to the Administrator, for inclusion in the annual report required under subsection (b)(7), information that includes—
(1) a description of efforts undertaken by the head of the Federal agency to enhance United States manufacturing activi- ties;
(2) a comprehensive description of the actions undertaken each year by the head of the Federal agency in carrying out the SBIR or STTR program of the agency in support of Execu- tive Order 13329 (69 Fed. Reg. 9181; relating to encouraging innovation in manufacturing);
(3) an assessment of the effectiveness of the actions de- scribed in paragraph (2) at enhancing the research and devel- opment of United States manufacturing technologies and proc- esses;
(4) a description of efforts by vendors selected to provide discretionary technical assistance under subsection (q)(1) to help SBIR and STTR concerns manufacture in the United States; and
(5) recommendations that the program managers of the SBIR or STTR program of the agency consider appropriate for additional actions to increase the effectiveness of enhancing manufacturing activities. SEC. 10. ø15 U.S.C. 639¿ (a) The Administration shall, as soon
as practicable each fiscal year make a comprehensive annual report to the President, the President of the Senate, the Senate Select Committee on Small Business, and the Speaker of the House of Representatives. Such report shall include a description of the state of small business in the Nation and the several States, and a de- scription of the operations of the Administration under this chap- ter, including, but not limited to, the general lending, disaster re- lief, Government regulation relief, procurement and property dis- posal, research and development, technical assistance, dissemina- tion of data and information, and other functions under the juris- diction of the Administration during the previous fiscal year. Such report shall contain recommendations for strengthening or improv- ing such programs, or, when necessary or desirable to implement more effectively congressional policies and proposals, for estab- lishing new or alternative programs. In addition, such report shall include the names of the business concerns to whom contracts are let and for whom financing is arranged by the Administration, to- gether with the amounts involved. With respect to minority small business concerns, the report shall include the proportion of loans and other assistance under this Act provided to such concerns, the goals of the Administration for the next fiscal year with respect to such concerns, and recommendations for improving assistance to minority small business concerns under this Act.
(b) The Administration shall make a report to the President, the President of the Senate, and the Speaker of the House of Rep-
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66 So in original. 67 Section 406(e) of Public Law 100–656, 102 Stat. 3876, added a new paragraph (2) without
designating a paragraph (1).
resentatives, to the Senate Select Committee on Small Business, and to the Committee on Small Business of the House of Rep- resentatives, as soon as practicable each fiscal year, showing as ac- curately as possible for each such period the amount of funds ap- propriated to it that it has expended in the conduct of each of its principal activities such as lending, procurement, contracting, and providing technical and managerial aids. Such report shall contain the number and amount of loans, the number of applications, the total amount applied for, and the number and amount of defaults for each type of equipment or service for which loans are author- ized by this 66 this Act. Such report shall provide such information separately on each type of loan made under paragraphs (10) through (15) of section 7(a) and separately for all other loan pro- grams. In addition, the information on loans shall be supplied on a monthly basis to the Committee on Small Business of the Senate and the Committee on Small Business of the House of Representa- tives.
(c) øRepealed by section 1091(f) of Public Law 104–66 (109 Stat. 722).¿
(d) For the purpose of aiding in carrying out the national policy 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, and to maintain and strengthen the overall economy of the Nation, the Department of Defense shall make an annual report to the Committees on Small Business of the Senate and the House of Representatives, showing the amount of funds ap- propriated to the Department of Defense which have been ex- pended, obligated, or contracted to be spent with small business concerns and the amount of such funds expended, obligated, or con- tracted to be spent with firms other than small business in the same fields of operation; and such reports shall show separately the funds expended, obligated, or contracted to be spent for basic and applied scientific research and development.
(e) The Administration and the Inspector General of the Ad- ministration shall retain all correspondence, records of inquiries, memoranda, reports, books, and records, including memoranda as to all investigations conducted by or for the Administration, for a period of at least one year from the date of each thereof, and shall at all times keep the same available for inspection and examination by the Senate Select Committee on Small Business and the Com- mittee on Small Business of the House of Representatives or their duly authorized representatives.
(2) 67 The Committee on Small Business of either the Senate or the House of Representatives may request that the Office of the Inspector General of the Administration conduct an investigation of any program or activity conducted under the authority of section 7(j) or 8(a). Not later than thirty days after the receipt of such a request, the Inspector General shall inform the committee, in writ- ing, of the disposition of the request by such office.
(f) To the extent deemed necessary by the Administrator to protect and preserve small-business interests, the Administration
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shall consult and cooperate with other departments and agencies of the Federal Government in the formulation by the Administration of policies affecting small-business concerns. When requested by the Administrator, each department and agency of the Federal Government shall consult and cooperate with the Administration in the formulation by such department or agency of policies affecting small-business concerns, in order to insure that small-business in- terests will be recognized, protected, and preserved. This sub- section shall not require any department or agency to consult or co- operate with the Administration in any case where the head of such department or agency determines that such consultation or cooperation would unduly delay action which must be taken by such department or agency to protect the national interest in an emergency.
(g) The Administration shall transmit, not later than December 31 of each year, to the Senate Select Committee on Small Business and Committee on Small Business of the House of Representatives a sealed report with respect to—
(1) complaints alleging illegal conduct by employees of the Administration which were received or acted upon by the Ad- ministration during the preceding fiscal year; and
(2) investigations undertaken by the Administration, in- cluding external and internal audits and security and inves- tigation reports. (h) The Administration shall transmit, not later than March 31
of each year, to the Committees on Small Business of the Senate and House of Representatives a report on the secondary market op- erations during the preceding calendar year. This report shall in- clude, but not be limited to, (1) the number and the total dollar amount of loans sold into the secondary market and the distribu- tion of such loans by size of loan, size of lender, geographic location of lender, interest rate, maturity, lender servicing fees, whether the rate is fixed or variable, and premium paid; (2) the number and dollar amount of loans resold in the secondary market with a dis- tribution by size of loan, interest rate, and premiums; (3) the num- ber and total dollar amount of pools formed; (4) the number and total dollar amount of loans in each pool; (5) the dollar amount, in- terest rate, and terms on each loan in each pool and whether the rate is fixed or variable; (6) the number, face value, interest rate, and terms of the trust certificates issued for each pool; (7) to the maximum extent possible, the use by the lender of the proceeds of sales of loans in the secondary market for additional lending to small business concerns; and (8) an analysis of the information re- ported in (1) through (7) to assess small businesses’ access to cap- ital at reasonable rates and terms as a result of secondary market operations.
SEC. 11. ø15 U.S.C. 640¿ (a) The President is authorized to consult with representatives of small-business concerns with a view to encouraging the making by such persons with the approval of the President of voluntary agreements and programs to further the objectives of this Act.
(b) No act or omission to act pursuant to this Act which occurs while this Act is in effect, if requested by the President pursuant to a voluntary agreement or program approved under subsection (a)
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of this section and found by the President to be in the public inter- est as contributing to the national defense, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act of the United States. A copy of each such request intended to be within the coverage of this section, and any modi- fication or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made, and it shall be published in the Federal Register unless pub- lication thereof would, in the opinion of the President, endanger the national security.
(c) The authority granted in subsection (b) of this section shall be delegated only (1) to an official who shall for the purpose of such delegation be required to be appointed by the President by and with the advice and consent of the Senate, (2) upon the condition that such official consult with the Attorney General and the Chair- man of the Federal Trade Commission not less than ten days be- fore making any request or finding thereunder, and (3) upon the condition that such official obtain the approval of the Attorney General to any request thereunder before making the request.
(d) Upon withdrawal of any request or finding hereunder, or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, the provisions of this section shall not apply to any subse- quent act, or omission to act, by reason of such finding or request.
SEC. 12. ø15 U.S.C. 641¿ The President may transfer to the Administration any functions, powers, and duties of any depart- ment or agency which relate primarily to small-business problems. In connection with any such transfer, the President may provide for appropriate transfers of records, property, necessary personnel, and unexpended balances of appropriations and other funds avail- able to the department or agency from which the transfer is made.
SEC. 13. ø15 U.S.C. 642¿ No loan shall be made or equipment, facilities, or services furnished by the Administration under this Act to any business enterprise unless the owners, partners, or offi- cers of such business enterprise (1) certify to the Administration the names of any attorneys, agents, or other persons engaged by or on behalf of such business enterprise for the purpose of expe- diting applications made to the Administration for assistance of any sort, and the fees paid or to be paid to any such persons; (2) execute an agreement binding any such business enterprise for a period of two years after any assistance is rendered by the Admin- istration to such business enterprise, to refrain from employing, tendering any office or employment to, or retaining for professional services, any person who, on the date such assistance or any part thereof was rendered, or within one year prior thereto, shall have served as an officer, attorney, agent, or employee of the Adminis- tration occupying a position or engaging in activities which the Ad- ministration shall have determined involve discretion with respect to the granting of assistance under this Act; and (3) furnish the names of lending institutions to which such business enterprise has applied for loans together with dates, amounts, terms, and proof of refusal.
SEC. 14. ø15 U.S.C. 643¿ To the fullest extent the Administra- tion deems practicable, it shall make a fair charge for the use of
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Government-owned property and make and let contracts on a basis that will result in a recovery of the direct costs incurred by the Ad- ministration.
SEC. 15. ø15 U.S.C. 644¿ (a) To effectuate the purposes of this Act, small-business concerns within the meaning of this Act shall receive any award or contract or any part thereof, and be awarded any contract for the sale of Government property, as to which it is determined by the Administration and the contracting procurement or disposal agency (1) to be in the interest of maintaining or mobi- lizing the Nation’s full productive capacity, (2) to be in the interest of war or national defense programs, (3) to be in the interest of as- suring that a fair proportion of the total purchases and contracts for property and services for the Government in each industry cat- egory are placed with small-business concerns, or (4) to be in the interest of assuring that a fair proportion of the total sales of Gov- ernment property be made to small-business concerns; but nothing contained in this Act shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Government or any agency thereof. These determinations may be made for individual awards or con- tracts or for classes of awards or contracts. If a proposed procure- ment includes in its statement of work goods or services currently being performed by a small business, and if the proposed procure- ment is in a quantity or estimated dollar value the magnitude of which renders small business prime contract participation unlikely, or if a proposed procurement for construction seeks to package or consolidate discrete construction projects, or the solicitation in- volves an unnecessary or unjustified bundling of contract require- ments, as determined by the Administration, the Procurement Ac- tivity shall provide a copy of the proposed procurement to the Pro- curement Activity’s Small Business Procurement Center Represent- ative at least 30 days prior to the solicitation’s issuance along with a statement explaining (1) why the proposed acquisition cannot be divided into reasonably small lots (not less than economic produc- tion runs) to permit offers on quantities less than the total require- ment, (2) why delivery schedules cannot be established on a real- istic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government, (3) why the proposed acquisition cannot be offered so as to make small business participation likely, (4) why construction cannot be procured as separate discrete projects, or (5) why the agency has determined that the bundled contract (as defined in section 3(o)) is necessary and justified. The thirty-day notification process shall occur concurrently with other processing steps required prior to issuance of the solicitation. Within 15 days after receipt of the pro- posed procurement and accompanying statement, if the Procure- ment Center Representative believes that the procurement as pro- posed will render small business prime contract participation un- likely, the Representative shall recommend to the Procurement Ac- tivity alternative procurement methods which would increase small business prime contracting opportunities. Whenever the Adminis- tration and the contracting procurement agency fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or agency by the Adminis-
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trator. For purposes of clause (3) of the first sentence of this sub- section, an industry category is a discrete group of similar goods and services. Such groups shall be determined by the Administra- tion in accordance with the definition of a ‘‘United States industry’’ under the North American Industry Classification System, as es- tablished by the Office of Management and Budget, except that the Administration shall limit such an industry category to a greater extent than provided under such classification codes if the Admin- istration receives evidence indicating that further segmentation for purposes of this paragraph is warranted due to special capital equipment needs or special labor or geographic requirements or to recognize a new industry. A market for goods or services may not be segmented under the preceding sentence due to geographic re- quirements unless the Government typically designates the area where work for contracts for such goods or services is to be per- formed and Government purchases comprise the major portion of the entire domestic market for such goods or services and, due to the fixed location of facilities, high mobilization costs, or similar economic factors, it is unreasonable to expect competition from business concerns located outside of the general areas where such concerns are located. 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) With respect to any work to be performed the amount of which would exceed the maximum amount of any contract for which a surety may be guaranteed against loss under section 411 of the Small Business Investment Act of 1958 (15 U.S.C. 694(b)), the contracting procurement agency shall, to the extent practicable, place contracts so as to allow more than one small business concern to perform such work.
(c)(1) As used in this subsection: (A) The term ‘‘Committee’’ means the Committee for Pur-
chase from the Blind and Other Severely Handicapped estab- lished under the first section of the Act entitled ‘‘An Act to cre- ate a Committee on Purchases of Blind-made Products, and for other purposes’’, approved June 25, 1938 (41 U.S.C. 46).
(B) The term ‘‘public or private organization for the handi- capped’’ has the same meaning given such term in section 3(e).
(C) The term ‘‘handicapped individual’’ has the same meaning given such term in section 3(f). (2)(A) During fiscal year 1995, public or private organizations
for the handicapped shall be eligible to participate in programs au- thorized under this section in an aggregate amount not to exceed $40,000,000.
(B) None of the amounts authorized for participation by sub- paragraph (A) may be placed on the procurement list maintained by the Committee pursuant to section 2 of the Act entitled ‘‘An Act to create a Committee on Purchases of Blind-made Products, and for other purposes’’, approved June 25, 1938 (41 U.S.C. 47).
(3) The Administrator shall monitor and evaluate such partici- pation.
(4)(A) Not later than ten days after the announcement of a pro- posed award of a contract by an agency or department to a public or private organization for the handicapped, a for-profit small busi-
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ness concern that has experienced or is likely to experience severe economic injury as the result of the proposed award may file an ap- peal of the proposed award with the Administrator.
(B) If such a concern files an appeal of a proposed award under subparagraph (A) and the Administrator, after consultation with the Executive Director of the Committee, finds that the concern has experienced or is likely to experience severe economic injury as the result of the proposed award, not later than thirty days after the filing of the appeal, the Administration shall require each agency and department having procurement powers to take such action as may be appropriate to alleviate economic injury sustained or likely to be sustained by the concern.
(5) Each agency and department having procurement powers shall report to the Office of Federal Procurement Policy each time a contract subject to paragraph (2)(A) is entered into, and shall in- clude in its report the amount of the next higher bid submitted by a for-profit small business concern. The Office of Federal Procure- ment Policy shall collect data reported under the preceding sen- tence through the Federal procurement data system and shall re- port to the Administration which shall notify all such agencies and departments when the maximum amount of awards authorized under paragraph (2)(A) has been made during any fiscal year.
(6) For the purpose of this subsection, a contract may be awarded only if at least 75 per centum of the direct labor per- formed on each item being produced under the contract in the shel- tered workshop or performed in providing each type of service under the contract by the sheltered workshop is performed by handicapped individuals.
(7) Agencies awarding one or more contracts to such an organi- zation pursuant to the provisions of this subsection may use multiyear contracts, if appropriate.
(d) For purposes of this section priority shall be given to the awarding of contracts and the placement of subcontracts to small business concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus areas. Notwithstanding any other provison of law, total labor surplus area set-asides pursuant to Defense Manpower Policy Number 4 (32A C.F.R. Chapter 1) or any successor policy shall be authorized if the Secretary or his designee specifically determines that there is a reasonable expectation that offers will be obtained from a sufficient number of eligible concerns so that awards will be made at reasonable prices. As soon as practicable and to the extent possible, in determining labor surplus areas, consideration shall be given to those persons who would be available for employment were suitable employment available. Until such definition reflects such number, the present criteria of such policy shall govern.
(e) PROCUREMENT STRATEGIES; CONTRACT BUNDLING.— (1) IN GENERAL.—To the maximum extent practicable, pro-
curement strategies used by a Federal department or agency having contracting authority shall facilitate the maximum par- ticipation of small business concerns as prime contractors, sub- contractors, and suppliers, and each such Federal department or agency shall—
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(A) provide opportunities for the participation of small business concerns during acquisition planning processes and in acquisition plans; and
(B) invite the participation of the appropriate Director of Small and Disadvantaged Business Utilization in acqui- sition planning processes and provide that Director access to acquisition plans. (2) MARKET RESEARCH.—
(A) IN GENERAL.—Before proceeding with an acquisi- tion strategy that could lead to a contract containing con- solidated procurement requirements, the head of an agen- cy shall conduct market research to determine whether consolidation of the requirements is necessary and justi- fied.
(B) FACTORS.—For purposes of subparagraph (A), con- solidation of the requirements may be determined as being necessary and justified if, as compared to the benefits that would be derived from contracting to meet those require- ments if not consolidated, the Federal Government would derive from the consolidation measurably substantial bene- fits, including any combination of benefits that, in com- bination, are measurably substantial. Benefits described in the preceding sentence may include the following:
(i) Cost savings. (ii) Quality improvements. (iii) Reduction in acquisition cycle times. (iv) Better terms and conditions. (v) Any other benefits.
(C) REDUCTION OF COSTS NOT DETERMINATIVE.—The reduction of administrative or personnel costs alone shall not be a justification for bundling of contract requirements unless the cost savings are expected to be substantial in relation to the dollar value of the procurement require- ments to be consolidated. (3) STRATEGY SPECIFICATIONS.—If the head of a contracting
agency determines that a proposed procurement strategy for a procurement involves a substantial bundling of contract re- quirements, the proposed procurement strategy shall—
(A) identify specifically the benefits anticipated to be derived from the bundling of contract requirements;
(B) set forth an assessment of the specific impedi- ments to participation by small business concerns as prime contractors that result from the bundling of contract re- quirements and specify actions designed to maximize small business participation as subcontractors (including sup- pliers) at various tiers under the contract or contracts that are awarded to meet the requirements; and
(C) include a specific determination that the antici- pated benefits of the proposed bundled contract justify its use. (4) CONTRACT TEAMING.—In the case of a solicitation of of-
fers for a bundled contract that is issued by the head of an agency, a small-business concern may submit an offer that pro- vides for use of a particular team of subcontractors for the per-
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68 So in law. Paragraph (1) used to run into the subsection designation prior to an amendment that was enacted to revise such paragraph in its entirety.
formance of the contract. The head of the agency shall evaluate the offer in the same manner as other offers, with due consid- eration to the capabilities of all of the proposed subcontractors. If a small business concern teams under this paragraph, it shall not affect its status as a small business concern for any other purpose. øSubsection (f) of section 15 repealed by Public Law 103–355.¿ (g) 68
(1) GOVERNMENTWIDE GOALS.— (A) ESTABLISHMENT.—The President shall annually es-
tablish Governmentwide goals for procurement contracts awarded to small business concerns, small business con- cerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small busi- ness concerns owned and controlled by socially and eco- nomically disadvantaged individuals, and small business concerns owned and controlled by women in accordance with the following:
(i) The Governmentwide goal for participation by small business concerns shall be established at not less than 23 percent of the total value of all prime con- tract awards for each fiscal year.
(ii) The Governmentwide goal for participation by small business concerns owned and controlled by serv- ice-disabled veterans shall be established at not less than 3 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(iii) The Governmentwide goal for participation by qualified HUBZone small business concerns shall be established at not less than 3 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(iv) The Governmentwide goal for participation by small business concerns owned and controlled by so- cially and economically disadvantaged individuals shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(v) The Governmentwide goal for participation by small business concerns owned and controlled by women shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year. (B) ACHIEVEMENT OF GOVERNMENTWIDE GOALS.—Each
agency shall have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns, small business concerns owned and con- trolled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged
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69 The amendments made by section 502(b) of Public Law 106–50 (113 Stat. 247) were exe- cuted as to the probable intent of the Congress. The reference to ‘‘section 15’’ should have been to ‘‘section 15(g)(2)’’.
individuals, and small business concerns owned and con- trolled by women to participate in the performance of con- tracts let by such agency. The Small Business Administra- tion and the Administrator for Federal Procurement Policy shall, when exercising their authority pursuant to para- graph (2), insure that the cumulative annual prime con- tract goals for all agencies meet or exceed the annual Gov- ernmentwide prime contract goal established by the Presi- dent pursuant to this paragraph.
(2)(A) The head of each Federal agency shall, after consultation with the Administration, establish goals for the participation by small business concerns, by small business concerns owned and controlled by service-disabled veterans, by qualified HUBZone small business concerns, by small business concerns owned and controlled by socially and economically disadvantaged individuals, and by small business concerns owned and controlled by women in procurement contracts of such agency. Such goals shall separately address prime contract awards and subcontract awards for each category of small business covered.
(B) Goals established under this subsection shall be jointly es- tablished by the Administration and the head of each Federal agen- cy and shall realistically reflect the potential of small business con- cerns, small business concerns owned and controlled by service-dis- abled veterans, 69 qualified HUBZone small business concerns, small business concerns owned and controlled by socially and eco- nomically disadvantaged individuals, and small business concerns owned and controlled by women to perform such contracts and to perform subcontracts under such contracts.
(C) Whenever the Administration and the head of any Federal agency fail to agree on established goals, the disagreement shall be submitted to the Administrator for Federal Procurement Policy for final determination.
(D) After establishing goals under this paragraph for a fiscal year, the head of each Federal agency shall develop a plan for achieving such goals at both the prime contract and the sub- contract level, which shall apportion responsibilities among the agency’s acquisition executives and officials. In establishing goals under this paragraph, the head of each Federal agency shall make a consistent effort to annually expand participation by small busi- ness concerns from each industry category in procurement con- tracts and subcontracts of such agency, including participation by small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small busi- ness concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(E) The head of each Federal agency, in attempting to attain expanded participation under subparagraph (D), shall consider—
(i) contracts awarded as the result of unrestricted competition; and
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70 The margin (and placement) of paragraph (3) reflects the probable intent of Congress. Section 318, title III of Division D of Public Law 113–76 provides for an amendment to Public
Law 85–536 by adding a paragraph (3) at the end of subsection (g). Such amendment (as en- acted into law) did not set this new paragraph (3) on it’s own margin and therefore would tech- nically run into clause (ii) of paragraph (2)(F). However, the version above does reflect the prop- er margin.
(ii) contracts awarded after competition restricted to eligible small business concerns under this section and under the program established under section 8(a). (F)(i) Each procurement employee or program man-
ager described in clause (ii) shall communicate to the sub- ordinates of the procurement employee or program man- ager the importance of achieving goals established under subparagraph (A).
(ii) A procurement employee or program manager de- scribed in this clause is a senior procurement executive, senior program manager, or Director of Small and Dis- advantaged Business Utilization of a Federal agency hav- ing contracting authority.
(3) 70 First tier subcontracts that are awarded by Management and Operating contractors sponsored by the Department of Energy to small business concerns, small businesses 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 be consid- ered toward the annually established agency and Government-wide goals for procurement contracts awarded.
(h) REPORTING ON GOALS FOR PROCUREMENT CONTRACTS AWARDED TO SMALL BUSINESS CONCERNS.—
(1) AGENCY REPORTS.—At the conclusion of each fiscal year, the head of each Federal agency shall submit to the Ad- ministrator a report describing—
(A) the extent of the participation by small business concerns, small business concerns owned and controlled by veterans (including service-disabled veterans), qualified HUBZone small business concerns, small business con- cerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women in the procurement con- tracts of such agency during such fiscal year;
(B) whether the agency achieved the goals established for the agency under subsection (g)(2) with respect to such fiscal year;
(C) any justifications for a failure to achieve such goals; and
(D) a remediation plan with proposed new practices to better meet such goals, including analysis of factors lead- ing to any failure to achieve such goals. (2) REPORTS BY ADMINISTRATOR.—Not later than 60 days
after receiving a report from each Federal agency under para- graph (1) with respect to a fiscal year, the Administrator shall submit to the President and Congress, and to make available on a public Web site, a report that includes—
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(A) a copy of each report submitted to the Adminis- trator under paragraph (1);
(B) a determination of whether each goal established by the President under subsection (g)(1) for such fiscal year was achieved;
(C) a determination of whether each goal established by the head of a Federal agency under subsection (g)(2) for such fiscal year was achieved;
(D) the reasons for any failure to achieve a goal estab- lished under paragraph (1) or (2) of subsection (g) for such fiscal year and a description of actions planned by the ap- plicable agency to address such failure, including the Ad- ministrator’s comments and recommendations on the pro- posed remediation plan; and
(E) for the Federal Government and each Federal agency, an analysis of the number and dollar amount of prime contracts awarded during such fiscal year to—
(i) small business concerns— (I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; and (IV) through unrestricted competition;
(ii) small business concerns owned and controlled by service-disabled veterans—
(I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; (IV) through competitions restricted to small
business concerns owned and controlled by serv- ice-disabled veterans; and
(V) through unrestricted competition; (iii) qualified HUBZone small business concerns—
(I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; (IV) through competitions restricted to quali-
fied HUBZone small business concerns; (V) through unrestricted competition where a
price evaluation preference was used; and (VI) through unrestricted competition where a
price evaluation preference was not used; (iv) small business concerns owned and controlled
by socially and economically disadvantaged individ- uals—
(I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; (IV) through competitions restricted to small
business concerns owned and controlled by so- cially and economically disadvantaged individuals;
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(V) through unrestricted competition; and (VI) by reason of that concern’s certification
as a small business owned and controlled by so- cially and economically disadvantaged individuals; (v) small business concerns owned by an Indian
tribe (as such term is defined in section 8(a)(13)) other than an Alaska Native Corporation—
(I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; (IV) through competitions restricted to small
business concerns owned and controlled by so- cially and economically disadvantaged individuals; and
(V) through unrestricted competition; (vi) small business concerns owned by a Native
Hawaiian Organization— (I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; (IV) through competitions restricted to small
business concerns owned and controlled by so- cially and economically disadvantaged individuals; and
(V) through unrestricted competition; (vii) small business concerns owned by an Alaska
Native Corporation— (I) in the aggregate; (II) through sole source contracts; (III) through competitions restricted to small
business concerns; (IV) through competitions restricted to small
business concerns owned and controlled by so- cially and economically disadvantaged individuals; and
(V) through unrestricted competition; and (viii) small business concerns owned and con-
trolled by women— (I) in the aggregate; (II) through competitions restricted to small
business concerns; (III) through competitions restricted using the
authority under section 8(m)(2); (IV) through competitions restricted using the
authority under section 8(m)(2) and in which the waiver authority under section 8(m)(3) was used; and
(V) through unrestricted competition; and (F) for the Federal Government, the number, dollar
amount, and distribution with respect to the North Amer- ican Industry Classification System of subcontracts award- ed during such fiscal year to small business concerns,
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small business concerns owned and controlled by service- disabled veterans, qualified HUBZone small business con- cerns, small business concerns owned and controlled by so- cially and economically disadvantaged individuals, and small business concerns owned and controlled by women, provided that such information is publicly available through data systems developed pursuant to the Federal Funding Accountability and Transparency Act of 2006 (Public Law 109–282), or otherwise available as provided in paragraph (3). (3) ACCESS TO DATA.—
(A) FEDERAL PROCUREMENT DATA SYSTEM.—To assist in the implementation of this section, the Administration shall have access to information collected through the Fed- eral Procurement Data System, Federal Subcontracting Reporting System, or any new or successor system.
(B) AGENCY PROCUREMENT DATA SOURCES.—To assist in the implementation of this section, the head of each con- tracting agency shall provide, upon request of the Adminis- tration, procurement information collected through agency data collection sources in existence at the time of the re- quest. Contracting agencies shall not be required to estab- lish new data collection systems to provide such data.
(i) Nothing in this Act or any other provision of law precludes exclusive small business set-asides for procurements of architec- tural and engineering services, research, development, test and evaluation, and each Federal agency is authorized to develop such set-asides to further the interests of small business in those areas.
(j)(1) Each contract for the purchase of goods and services that has an anticipated value greater than $2,500 but not greater than $100,000 shall be reserved exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and are competitive with regard to the quality and delivery of the goods or services being purchased.
(2) In carrying out paragraph (1), a contracting officer shall consider a responsive offer timely received from an eligible small business offeror.
(3) Nothing in paragraph (1) shall be construed as precluding an award of a contract with a value not greater than $100,000 under the authority of subsection (a) of section 8 of this Act, section 2323 of title 10, United States Code, section 712 of the Business Opportunity Development Reform Act of 1988 (Public Law 100– 656; 15 U.S.C. 644 note), or section 7102 of the Federal Acquisition Streamlining Act of 1994.
(k) There is hereby established in each Federal agency having procurement powers an office to be known as the ‘‘Office of Small and Disadvantaged Business Utilization’’. The management of each such office shall be vested in an officer or employee of such agency, with experience serving in any combination of the following roles: program manager, deputy program manager, or assistant program manager for Federal acquisition program; chief engineer, systems engineer, assistant engineer, or product support manager for Fed- eral acquisition program; Federal contracting officer; small busi-
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ness technical advisor; contracts administrator for Federal Govern- ment contracts; attorney specializing in Federal procurement law; small business liaison officer; officer or employee who managed Federal Government contracts for a small business; or individual whose primary responsibilities were for the functions and duties of section 8, 15 or 44 of this Act. Such officer or employee—
(1) shall be known as the ‘‘Director of Small and Disadvan- taged Business Utilization’’ for such agency;
(2) shall be appointed by the head of such agency to a posi- tion that is a Senior Executive Service position (as such term is defined under section 3132(a) of title 5, United States Code), except that, for any agency in which the positions of Chief Ac- quisition Officer and senior procurement executive (as such terms are defined under section 44(a) of this Act) are not Sen- ior Executive Service positions, the Director of Small and Dis- advantaged Business Utilization may be appointed to a posi- tion compensated at not less than the minimum rate of basic pay payable for grade GS–15 of the General Schedule under section 5332 of such title (including comparability payments under section 5304 of such title);
(3) shall be responsible only to (including with respect to performance appraisals), and report directly and exclusively to, the head of such agency or to the deputy of such head, except that the Director for the Office of the Secretary of Defense shall be responsible only to (including with respect to perform- ance appraisals), and report directly and exclusively to, such Secretary or the Secretary’s designee;
(4) shall be responsible for the implementation and execu- tion of the functions and duties under sections 8 and 15 of this Act which relate to such agency;
(5) shall identify proposed solicitations that involve signifi- cant bundling of contract requirements, and work with the agency acquisition officials and the Administration to revise the procurement strategies for such proposed solicitations where appropriate to increase the probability of participation by small businesses as prime contractors, or to facilitate small business participation as subcontractors and suppliers, if a so- licitation for a bundled contract is to be issued;
(6) shall assist small business concerns to obtain pay- ments, required late payment interest penalties, or information regarding payments due to such concerns from an executive agency or a contractor, in conformity with chapter 39 of title 31, United States Code, or any other protection for contractors or subcontractors (including suppliers) that is included in the Federal Acquisition Regulation or any individual agency sup- plement to such Government-wide regulation;
(7) shall have supervisory authority over personnel of such agency to the extent that the functions and duties of such per- sonnel relate to functions and duties under sections 8 and 15 of this Act;
(8) shall assign a small business technical adviser to each office to which the Administration has assigned a procurement center representative—
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(A) who shall be a full-time employee of the procuring activity and shall be well qualified, technically trained and familiar with the supplies or services purchased at the ac- tivity; and
(B) whose principal duty shall be to assist the Admin- istration procurement center representative in his duties and functions relating to sections 8 and 15 of this Act, (9) shall cooperate, and consult on a regular basis, with
the Administration with respect to carrying out the functions and duties described in paragraph (4) of this subsection;
(10) shall make recommendations to contracting officers as to whether a particular contract requirement should be award- ed pursuant to subsection (a), section 8(a) of this Act, or sec- tion 2323 of title 10, United States Code, which shall be made with due regard to the requirements of subsection (m), and the failure of the contracting officer to accept any such rec- ommendations shall be documented and included within the appropriate contract file;
(11) shall review and advise such agency on any decision to convert an activity performed by a small business concern to an activity performed by a Federal employee;
(12) shall provide to the Chief Acquisition Officer and sen- ior procurement executive of such agency advice and comments on acquisition strategies, market research, and justifications related to section 44 of this Act;
(13) may provide training to small business concerns and contract specialists, except that such training may only be pro- vided to the extent that the training does not interfere with the Director carrying out other responsibilities under this sub- section;
(14) shall receive unsolicited proposals and, when appro- priate, forward such proposals to personnel of the activity re- sponsible for reviewing such proposals;
(15) shall carry out exclusively the duties enumerated in this Act, and shall, while the Director, not hold any other title, position, or responsibility, except as necessary to carry out re- sponsibilities under this subsection; and
(16) shall submit, each fiscal year, to the Committee on Small Business of the House of Representatives and the Com- mittee on Small Business and Entrepreneurship of the Senate a report describing—
(A) the training provided by the Director under para- graph (13) in the most recently completed fiscal year;
(B) the percentage of the budget of the Director used for such training in the most recently completed fiscal year; and
(C) the percentage of the budget of the Director used for travel in the most recently completed fiscal year.
This subsection shall not apply to the Administration. (l) PROCUREMENT CENTER REPRESENTATIVES.—
(1) ASSIGNMENT AND ROLE.—The Administrator shall as- sign to each major procurement center a procurement center representative with such assistance as may be appropriate.
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184Sec. 15 SMALL BUSINESS ACT
(2) ACTIVITIES.—A procurement center representative is authorized to—
(A) attend any provisioning conference or similar evalua- tion session during which determinations are made as to whether requirements are to be procured through other than full and open competition and make recommendations with re- spect to such requirements to the members of such conference or session;
(B) review, at any time, barriers to small business par- ticipation in Federal contracting previously imposed on goods and services through acquisition method coding or similar procedures, and recommend to personnel of the ap- propriate activity the prompt reevaluation of such barriers;
(C) review barriers to small business participation in Federal contracting arising out of restrictions on the rights of the United States in technical data, and, when appro- priate, recommend that personnel of the appropriate activ- ity initiate a review of the validity of such an asserted re- striction;
(D) review any bundled or consolidated solicitation or contract in accordance with this Act;
(E) have access to procurement records and other data of the procurement center commensurate with the level of such representative’s approved security clearance classi- fication, with such data provided upon request in elec- tronic format, when available;
(F) receive unsolicited proposals from small business concerns and transmit such proposals to personnel of the activity responsible for reviewing such proposals, who shall furnish the procurement center representative with infor- mation regarding the disposition of any such proposal;
(G) consult with the Director the Office of Small and Disadvantaged Business Utilization of that agency and the agency personnel described in paragraph (7) and (8) of sub- section (k) with regard to agency insourcing decisions cov- ered by subsection (k)(11);
(H) be an advocate for the maximum practicable utili- zation of small business concerns in Federal contracting, including by advocating against the consolidation or bun- dling of contract requirements when not justified; and
(I) carry out any other responsibility assigned by the Administrator. (3) APPEALS.—A procurement center representative is au-
thorized to appeal the failure to act favorably on any rec- ommendation made pursuant to paragraph (2). Such appeal shall be filed and processed in the same manner and subject to the same conditions and limitations as an appeal filed by the Administrator pursuant to subsection (a). (4) The Administration shall assign and co-locate at least two
small business technical advisers to each major procurement center in addition to such other advisers as may be authorized from time to time. The sole duties of such advisers shall be to assist the pro- curement center representative for the center to which such advis-
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185 Sec. 15SMALL BUSINESS ACT
ers are assigned in carrying out the functions described in para- graph (2) and the representatives referred to in subsection (k)(6).
(5) POSITION REQUIREMENTS.— (A) IN GENERAL.—A procurement center representative
assigned under this subsection shall— (i) be a full-time employee of the Administration; (ii) be fully qualified, technically trained, and fa-
miliar with the goods and services procured by the major procurement center to which that representative is assigned; and
(iii) have a Level III Federal Acquisition Certifi- cation in Contracting (or any successor certification) or the equivalent Department of Defense certification, ex- cept that any person serving in such a position on the date of enactment of this clause may continue to serve in that position for a period of 5 years without the re- quired certification. (B) COMPENSATION.—The Administrator shall estab-
lish personnel positions for procurement center representa- tives assigned under this subsection, which are classified at a grade level of the General Schedule sufficient to at- tract and retain highly qualified personnel. (6) MAJOR PROCUREMENT CENTER DEFINED.—For purposes
of this subsection, the term ‘‘major procurement center’’ means a procurement center that, in the opinion of the Administrator, purchases substantial dollar amounts of goods or services, in- cluding goods or services that are commercially available.
(7) TRAINING.— (A) AUTHORIZATION.—At such times as the Adminis-
trator deems appropriate. the breakout procurement center representative shall conduct familiarization sessions for contracting officers and other appropriate personnel of the procurement center to which such representative is as- signed. Such sessions shall acquaint the participants with the provisions of this subsection and shall instruct them in methods designed to further the purposes of such sub- section.
(B) LIMITATION.—A procurement center representative may provide training under subparagraph (A) only to the extent that the training does not interfere with the rep- resentative carrying out other activities under this sub- section. (8) ANNUAL BRIEFING AND REPORT.—A procurement center
representative shall prepare and personally deliver an annual briefing and report to the head of the procurement center to which such representative is assigned. Such briefing and re- port shall detail the past and planned activities of the rep- resentative and shall contain such recommendations for im- provement in the operation of the center as may be appro- priate. The head of such center shall personally receive such briefing and report and shall, within 60 calendar days after re- ceipt, respond, in writing, to each recommendation made by such representative.
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71 So in original. Probably should be ‘‘ensure’’.
(m)(1) Each agency subject to the requirements of section 2323 of title 10, United States Code, shall, when implementing such re- quirements—
(A) establish policies and procedures that insure 71 that there will be no reduction in the number of dollar value of con- tracts awarded pursuant to this section and section 8(a) in order to achieve any goal or other program objective; and
(B) assure that such requirements will not alter or change the procurement process used to implement this section or sec- tion 8(a). (2) All procurement center representatives (including those re-
ferred to in subsection (k)(6)), in addition to such other duties as may be assigned by the Administrator, shall—
(A) monitor the performance of the procurement activities to which they are assigned to ascertain the degree of compli- ance with the requirements of paragraph (1);
(B) report to their immediate supervisors all instances of noncompliance with such requirements; and
(C) increase, insofar as possible, the number and dollar value of procurements that may be used for the programs es- tablished under this section, section 8(a), and section 2323 of title 10, United States Code. (n) For purposes of this section, the determination of labor sur-
plus areas shall be made on the basis of the criteria in effect at the time of the determination, except that any minimum popu- lation criteria shall not exceed twenty-five thousand. Such deter- mination, as modified by the preceding sentence, shall be made by the Secretary of Labor.
(o) LIMITATIONS ON SUBCONTRACTING.—A concern may not be awarded a contract under subsection (a) as a small business con- cern unless the concern agrees to satisfy the requirements of sec- tion 46.
(p) ACCESS TO DATA.— (1) BUNDLED CONTRACT DEFINED.—In this subsection, the
term ‘‘bundled contract’’ has the meaning given such term in section 3(o)(1).
(2) DATABASE.— (A) IN GENERAL.—Not later than 180 days after the
date of the enactment of this subsection, the Administrator of the Small Business Administration shall develop and shall thereafter maintain a database containing data and information regarding—
(i) each bundled contract awarded by a Federal agency; and
(ii) each small business concern that has been dis- placed as a prime contractor as a result of the award of such a contract.
(3) ANALYSIS.—For each bundled contract that is to be re- competed as a bundled contract, the Administrator shall deter- mine—
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(A) the amount of savings and benefits (in accordance with subsection (e)) achieved under the bundling of con- tract requirements; and
(B) whether such savings and benefits will continue to be realized if the contract remains bundled, and whether such savings and benefits would be greater if the procure- ment requirements were divided into separate solicitations suitable for award to small business concerns. (4) ANNUAL REPORT ON CONTRACT BUNDLING.—
(A) IN GENERAL.—Not later than 1 year after the date of the enactment of this paragraph, and annually in March thereafter, the Administration shall transmit a report on contract bundling to the Committees on Small Business of the House of Representatives and the Senate.
(B) CONTENTS.—Each report transmitted under sub- paragraph (A) shall include—
(i) data on the number, arranged by industrial classification, of small business concerns displaced as prime contractors as a result of the award of bundled contracts by Federal agencies; and
(ii) a description of the activities with respect to previously bundled contracts of each Federal agency during the preceding year, including—
(I) data on the number and total dollar amount of all contract requirements that were bundled; and
(II) with respect to each bundled contract, data or information on—
(aa) the justification for the bundling of contract requirements;
(bb) the cost savings realized by bundling the contract requirements over the life of the contract;
(cc) the extent to which maintaining the bundled status of contract requirements is projected to result in continued cost savings;
(dd) the extent to which the bundling of contract requirements complied with the con- tracting agency’s small business subcon- tracting plan, including the total dollar value awarded to small business concerns as sub- contractors and the total dollar value pre- viously awarded to small business concerns as prime contractors; and
(ee) the impact of the bundling of contract requirements on small business concerns un- able to compete as prime contractors for the consolidated requirements and on the indus- tries of such small business concerns, includ- ing a description of any changes to the propor- tion of any such industry that is composed of small business concerns.
(5) ACCESS TO DATA.—
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(A) FEDERAL PROCUREMENT DATA SYSTEM.—To assist in the implementation of this section, the Administration shall have access to information collected through the Fed- eral Procurement Data System.
(B) AGENCY PROCUREMENT DATA SOURCES.—To assist in the implementation of this section, the head of each con- tracting agency shall provide, upon request of the Adminis- tration, procurement information collected through exist- ing agency data collection sources.
(q) REPORTS RELATED TO PROCUREMENT CENTER REPRESENTA- TIVES.—
(1) TEAMING REQUIREMENTS.—Each Federal agency shall include in each solicitation for any multiple award contract above the substantial bundling threshold of the Federal agency a provision soliciting bids from any responsible source, includ- ing responsible small business concerns and teams or joint ven- tures of small business concerns.
(2) POLICIES ON REDUCTION OF CONTRACT BUNDLING.— (A) IN GENERAL.—Not later than 1 year after the date
of enactment of this subsection, the Federal Acquisition Regulatory Council established under section 25(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 4219(a)) shall amend the Federal Acquisition Regulation issued under section 25 of such Act to—
(i) establish a Government-wide policy regarding contract bundling, including regarding the solicitation of teaming and joint ventures under paragraph (1); and
(ii) require that the policy established under clause (i) be published on the website of each Federal agency. (B) RATIONALE FOR CONTRACT BUNDLING.—Not later
than 30 days after the date on which the head of a Federal agency submits data certifications to the Administrator for Federal Procurement Policy, the head of the Federal agen- cy shall publish on the website of the Federal agency a list and rationale for any bundled contract for which the Fed- eral agency solicited bids or that was awarded by the Fed- eral agency. (3) REPORTING.—Not later than 90 days after the date of
enactment of this subsection, and every 3 years thereafter, the Administrator shall submit to the Committee on Small Busi- ness and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report re- garding procurement center representatives and commercial market representatives, which shall—
(A) identify each area for which the Administration has assigned a procurement center representative or a commercial market representative;
(B) explain why the Administration selected the areas identified under subparagraph (A); and
(C) describe the activities performed by procurement center representatives and commercial market representa- tives.
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(r) MULTIPLE AWARD CONTRACTS.—Not later than 1 year after the date of enactment of this subsection, the Administrator for Fed- eral Procurement Policy and the Administrator, in consultation with the Administrator of General Services, shall, by regulation, es- tablish guidance under which Federal agencies may, at their dis- cretion—
(1) set aside part or parts of a multiple award contract for small business concerns, including the subcategories of small business concerns identified in subsection (g)(2);
(2) notwithstanding the fair opportunity requirements under section 2304c(b) of title 10, United States Code, and sec- tion 303J(b) of the Federal Property and Administrative Serv- ices Act of 1949 (41 U.S.C. 253j(b)), set aside orders placed against multiple award contracts for small business concerns, including the subcategories of small business concerns identi- fied in subsection (g)(2); and
(3) reserve 1 or more contract awards for small business concerns under full and open multiple award procurements, in- cluding the subcategories of small business concerns identified in subsection (g)(2). SEC. 16. ø15 U.S.C. 645¿ (a) Whoever makes any statement
knowing it to be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or other- wise, or the acceptance, release, or substitution of security therefor, or for the purpose of influencing in any way the action of the Ad- ministration, or for the purpose of obtaining money, property, or anything of value, under this Act, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both.
(b) Whoever, being connected in any capacity with the Admin- istration, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether be- longing to it or pledged or otherwise entrusted to it, or (2) with in- tent to defrand the Administration or any other body politic or cor- porate, or any individual, or to deceive any officer, auditor, or ex- aminer of the Administration, makes any false entry in any book, report, or statement of or to the Administration, or, without being duly authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of ex- change, mortgage, judgment, or decree thereof, or (3) with intent to defraud participates or shares in or receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other part of the Administration, or (4) gives any unauthorized information concerning any future ac- tion or plan of the Administration which might affect the value of securities, or, having such knowledge, invests or speculates, di- rectly or indirectly, in the securities or property of any company or corporation receiving loans or other assistance from the Adminis- tration, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.
(c) Whoever, with intent to defraud, knowingly conceals, re- moves, disposes of, or converts to his own use or that of another, any property mortgaged or pledged to, or held by, the Administra-
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72 So in original. 73 So in original. Provisions following probably should be set flush with paragraph (1).
tion, shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the value of such property does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.
(d)(1) Whoever misrepresents the status of any concern or per- son as a ‘‘small business concern’’,, 72 a ‘‘qualified HUBZone small business concern’’, a ‘‘small business concern owned and controlled by socially and economically disadvantaged individuals’’, or a ‘‘small business concern owned and controlled by women’’, in order to obtain for oneself or another any—
(A) prime contract to be awarded pursuant to section 9, 15, or 31;
(B) subcontract to be awarded pursuant to section 8(a); (C) subcontract that is to be included as part or all of a
goal contained in a subcontracting plan required pursuant to section 8(d); or
(D) prime or subcontract to be awarded as a result, or in furtherance, of any other provision of Federal law that specifi- cally references section 8(d) for a definition of program eligi- bility, 73 shall be subject to the penalties and remedies de- scribed in paragraph (2). (2) Any person who violates paragraph (1) shall—
(A) be punished by a fine of not more than $500,000 or by imprisonment for not more than 10 years, or both;
(B) be subject to the administrative remedies prescribed by the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801–3812);
(C) be subject to suspension and debarment as specified in subpart 9.4 of title 48, Code of Federal Regulations (or any suc- cessor regulation); and
(D) be ineligible for participation in any program or activ- ity conducted under the authority of this Act or the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) for a period not to exceed 3 years.
(3) LIMITATION ON LIABILITY.—This subsection shall not apply to any conduct in violation of subsection (a) if the defend- ant acted in good faith reliance on a written advisory opinion from a Small Business Development Center (as defined in this Act), or an entity participating in the Procurement Technical Assistance Cooperative Agreement Program defined in chapter 142 of title 10, United States Code; however nothing in this Act shall obligate either entity to provide such a letter nor shall the provision of such a letter in any way render the pro- viding entity liable to the business concern should the Admin- istrator later determine that the concern is not a small busi- ness concern. Upon issuance of an advisory opinion under this paragraph, the entity issuing the advisory opinion shall remit a copy of the opinion to the General Counsel of the Administra- tion, who may reject the advisory opinion. If the General Coun- sel of the Administration rejects the advisory opinion, the Ad- ministration shall notify the entity issuing the advisory opinion
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74 So in original. 75 So in original.
and the recipient of the opinion, after which time the business concern may not rely upon the opinion. (e) Any representation of the status of any concern or person
as a ‘‘small business concern’’,, 74 a ‘‘HUBZone small business con- cern’’, a ‘‘small business concern owned and controlled by socially and economically disadvantaged individuals’’, or a ‘‘small business concern owned and controlled by women’’ in order to obtain any prime contract or subcontract enumerated in subection (d) of this section shall be in writing.
(f) Whoever falsely certifies past compliance with the require- ments of section 7(j)(10)(I) of this Act shall be subject to the pen- alties prescribed in subsection (d).
(g) SUBCONTRACTING LIMITATIONS.— (1) IN GENERAL.—Whoever violates a requirement estab-
lished under section 46 shall be subject to the penalties pre- scribed in subsection (d), except that, for an entity that exceed- ed a limitation on subcontracting under such section, the fine described in subsection (d)(2)(A) shall be treated as the greater of—
(A) $500,000; or (B) the dollar amount expended, in excess of permitted
levels, by the entity on subcontractors. (2) MONITORING.—Not later than 1 year after the date of
enactment of this subsection, the Administrator shall take such actions as are necessary to ensure that an existing Fed- eral subcontracting reporting system is modified to notify the Administrator, the appropriate Director of the Office of Small and Disadvantaged Business Utilization, and the appropriate contracting officer if a requirement established under section 46 is violated. SEC. 17. ø15 U.S.C. 646¿ Any interest held by the Administra-
tion in property, as security for a loan, shall be subordinate to any lien on such property for taxes due on the property to a State, or political subdivision thereof, in any case where such lien would, under applicable State law, be superior to such interest if such in- terest were held by any party other than the United States.
SEC. 18. ø15 U.S.C. 647¿ (a) The Administration shall not du- plicate the work or activity of any other department or agency of the Federal Government,, 75 and nothing contained in this Act shall be construed to authorize any such duplication unless such work or activity is expressly provided for in this Act. If loan applications are being refused or loans denied by such other department or agency responsible for such work or activity due to administrative withholding from obligation or withholding from apportionment, or due to administratively declared moratorium, then, for purposes of this section, no duplication shall be deemed to have occurred.
(b) As used in this Act— (1) ‘‘agricultural enterprises’’ means those businesses en-
gaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricul- tural related industries; and
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76 Margin so in law.
(2) ‘‘credit elsewhere’’ means the availability of sufficient credit from non-Federal sources at reasonable rates and terms, taking into consideration prevailing private rates and terms in the community in or near where the concern transacts busi- ness for similar purposes and periods of time. SEC. 19. ø15 U.S.C. 631 note¿ If any provision of this Act, or
the application thereof to any person or circumstances, is held in- valid, the remainder of this Act, and the application of such provi- sion to other persons or circumstances, shall not be affected there- by.
SEC. 20. ø15 U.S.C. 631 note¿ (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 avail- able 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 fund- ing level, as specified in section 21(a);
(B) to pay the expenses of the National Small Business De- velopment 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 re- ferred to in section 21(a)(3)(A); and
(F) 76 to pay for small business development center grants as mandated or directed by Congress.
(2) Notwithstanding any other provision of law, the Adminis- tration shall enter into commitments for direct loans and to guar- antee 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 pro- grams 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 se- curities under title III of the Small Business Investment Act of 1958 may be obligated in one fiscal year and disbursed or guaran- teed 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 appro- priate 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 sec- tion—
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(A) shall mean the net amount of the loan principal guar- anteed by the Small Business Administration (and does not in- clude 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 spe- cial 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 Administra-
tion 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 ex- penses, of sections 7(b)(1) and 7(b)(2) of this Act; and there are au- thorized to be transferred from the disaster loan revolving fund such sums as may be necessary and appropriate for such adminis- trative expenses.
(c) DISASTER MITIGATION PILOT PROGRAM.—The following pro- gram 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 Ad-
ministration 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 Ad-
ministration is authorized to make $23,050,000,000 in de- ferred 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 com- pany financings, as provided in section 7(a)(13) and as provided in section 504 of the Small Business Invest- ment 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 Administra- tion is authorized to make—
(i) $4,250,000,000 in purchases of participating se- curities; 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 Admin-
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istration is authorized to enter into guarantees not to ex- ceed $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 pro- gram authorized by section 8(b)(1). (2) ADDITIONAL AUTHORIZATIONS.—
(A) There are authorized to be appropriated to the Ad- ministration for fiscal year 2005 such sums as may be nec- essary to carry out the provisions of this Act not elsewhere provided for, including administrative expenses and nec- essary 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 Administra- tion.
(B) Notwithstanding any other provision of this para- graph, for fiscal year 2005—
(i) no funds are authorized to be used as loan cap- ital 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 de- partment or agency, by contract or otherwise, under terms and conditions other than those specifically au- thorized under this Act or the Small Business Invest- ment 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 Ad-
ministration 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 Ad-
ministration is authorized to make $25,050,000,000 in de- ferred 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 com- pany financings, as provided in section 7(a)(13) and as provided in section 504 of the Small Business Invest- ment Act of 1958;
(iii) $500,000,000 in loans, as provided in section 7(a)(21); and
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77 There are no subsections (f)–(i) in section 20.
(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 Administra- tion is authorized to make—
(i) $4,500,000,000 in purchases of participating se- curities; 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 Admin- istration is authorized to enter into guarantees not to ex- ceed $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 pro- gram authorized by section 8(b)(1). (2) ADDITIONAL AUTHORIZATIONS.—
(A) There are authorized to be appropriated to the Ad- ministration for fiscal year 2006 such sums as may be nec- essary to carry out the provisions of this Act not elsewhere provided for, including administrative expenses and nec- essary 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 Administra- tion.
(B) Notwithstanding any other provision of this para- graph, for fiscal year 2006—
(i) no funds are authorized to be used as loan cap- ital 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 de- partment or agency, by contract or otherwise, under terms and conditions other than those specifically au- thorized under this Act or the Small Business Invest- ment 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.
(j) 77 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.
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SEC. 21. ø15 U.S.C. 648¿ (a)(1) The Administration is author- ized to make grants (including contracts and cooperative agree- ments) to any State government or any agency thereof, any re- gional entity, any State-chartered development, credit or finance corporation, any women’s business center operating pursuant to section 29, any public or private institution of higher education, in- cluding but not limited to any land-grant college or university, any college or school of business, engineering, commerce, or agriculture, community college or junior college, or to any entity formed by two or more of the above entities (herein referred to as ‘‘applicants’’) to assist in establishing small business development centers and to any such labor for: small business oriented employment or natural resources development programs; studies, research, and counseling concerning the managing, financing, and operation of small busi- ness enterprises, management and technical assistance regarding small business participation in international markets, export pro- motion and technology transfer; delivery or distribution of such services and information; and providing access to business analysts who can refer small business concerns to available experts: Pro- vided, That after December 31, 1990, the Administration shall not make a grant to any applicant other than an institution of higher education or a women’s business center operating pursuant to sec- tion 29 as a Small Business Development Center unless the appli- cant was receiving a grant (including a contract or cooperative agreement) on such date. The Administration shall require any ap- plicant for a small business development center grant with per- formance commencing on or after January 1, 1992 to have its own budget and to primarily utilize institutions of higher education and women’s business centers operating pursuant to section 29 to pro- vide services to the small business community. The term of such grants shall be made on a calendar year basis or to coincide with the Federal fiscal year.
(2) COOPERATION TO PROVIDE INTERNATIONAL TRADE SERV- ICES.—
(A) INFORMATION AND SERVICES.—The small business development centers shall work in close cooperation with the Administration’s regional and local offices, the Depart- ment of Commerce, appropriate Federal, State and local agencies (including State trade agencies), and the small business community to serve as an active information dis- semination and service delivery mechanism for existing trade promotion, trade finance, trade adjustment, trade remedy and trade data collection programs of particular utility for small businesses.
(B) COOPERATION WITH STATE TRADE AGENCIES AND EX- PORT ASSISTANCE CENTERS.—A small business development center that counsels a small business concern on issues re- lating to international trade shall—
(i) consult with State trade agencies and Export Assistance Centers to provide appropriate services to the small business concern; and
(ii) as necessary, refer the small business concern to a State trade agency or an Export Assistance Cen- ter for further counseling or assistance.
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78 Margin so in law. Section 21(a)(3)(C) indention probably should be moved two ems to left. 79 So in law. Probably should be ‘‘national’’.
(C) DEFINITION.—In this paragraph, the term ‘‘Export Assistance Center’’ has the same meaning as in section 22.
(3) The Small Business Development Center Program shall be under the general management and oversight of the Administra- tion for the delivery of programs and services to the small business community. Such programs and services shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, pursuant to an executed cooperative agreement between the Small Business Development Center applicant and the Administration.
(A) Small business development centers are authorized to form an association to pursue matters of common concern. If more than a majority of the small business development centers which are op- erating pursuant to agreements with the Administration are mem- bers of such an association, the Administration is authorized and directed to recognize the existence and activities of such an associa- tion and to consult with it and develop documents (i) announcing the annual scope of activities pursuant to this section, (ii) request- ing proposals to deliver assistance as provided in this section and (iii) governing the general operations and administration of the Small Business Development Center Program, specifically includ- ing the development of regulations and a uniform negotiated coop- erative agreement for use on an annual basis when entering into individual negotiated agreements with small business development centers.
(B) Provisions governing audits, cost principles and adminis- trative requirements for Federal grants, contracts and cooperative agreements which are included in uniform requirements of Office of Management and Budget (OMB) Circulars shall be incorporated by reference and shall not be set forth in summary or other form in regulations.
(C) 78 Whereas On an annual basis, the Small Business Development Center shall review and coordinate public and private partnerships and cosponsorships with the Administra- tion for the purpose of more efficiently leveraging available re- sources on a National 79 and a State basis. (4) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.—
(A) IN GENERAL.—The Administration shall require as a condition of any grant (or amendment or modification thereof) made to an applicant under this section, that a matching amount (excluding any fees collected from recipients of such assistance) equal to the amount of such grant be provided from sources other than the Federal Government, to be comprised of not less than 50 percent cash and not more than 50 percent of indirect costs and in-kind contributions.
(B) RESTRICTION.—The matching amount described in sub- paragraph (A) shall not include any indirect costs or in-kind contributions derived from any Federal program.
(C) FUNDING FORMULA.— (i) IN GENERAL.—Subject to clause (iii), the amount of
a formula grant received by a State under this subpara-
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graph shall be equal to an amount determined in accord- ance with the following formula:
(I) The annual amount made available under sec- tion 20(a) for the Small Business Development Center Program, less any reductions made for expenses au- thorized by clause (v) of this subparagraph, shall be divided on a pro rata basis, based on the percentage of the population of each State, as compared to the population of the United States.
(II) If the pro rata amount calculated under sub- clause (I) for any State is less than the minimum funding level under clause (iii), the Administration shall determine the aggregate amount necessary to achieve that minimum funding level for each such State.
(III) The aggregate amount calculated under sub- clause (II) shall be deducted from the amount cal- culated under subclause (I) for States eligible to re- ceive more than the minimum funding level. The de- ductions shall be made on a pro rata basis, based on the population of each such State, as compared to the total population of all such States.
(IV) The aggregate amount deducted under sub- clause (III) shall be added to the grants of those States that are not eligible to receive more than the min- imum funding level in order to achieve the minimum funding level for each such State, except that the eligi- ble amount of a grant to any State shall not be re- duced to an amount below the minimum funding level. (ii) GRANT DETERMINATION.—The amount of a grant
that a State is eligible to apply for under this subpara- graph shall be the amount determined under clause (i), subject to any modifications required under clause (iii), and shall be based on the amount available for the fiscal year in which performance of the grant commences, but not including amounts distributed in accordance with clause (iv). The amount of a grant received by a State under any provision of this subparagraph shall not exceed the amount of matching funds from sources other than the Federal Government, as required under subparagraph (A).
(iii) MINIMUM FUNDING LEVEL.—The amount of the minimum funding level for each State shall be determined for each fiscal year based on the amount made available for that fiscal year to carry out this section, as follows:
(I) If the amount made available is not less than $81,500,000 and not more than $90,000,000, the min- imum funding level shall be $500,000.
(II) If the amount made available is less than $81,500,000, the minimum funding level shall be the remainder of $500,000 minus a percentage of $500,000 equal to the percentage amount by which the amount made available is less than $81,500,000.
(III) If the amount made available is more than $90,000,000, the minimum funding level shall be the
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sum of $500,000 plus a percentage of $500,000 equal to the percentage amount by which the amount made available exceeds $90,000,000. (iv) DISTRIBUTIONS.—Subject to clause (iii), if any
State does not apply for, or use, its full funding eligibility for a fiscal year, the Administration shall distribute the re- maining funds as follows:
(I) If the grant to any State is less than the amount received by that State in fiscal year 2000, the Administration shall distribute such remaining funds, on a pro rata basis, based on the percentage of short- age of each such State, as compared to the total amount of such remaining funds available, to the ex- tent necessary in order to increase the amount of the grant to the amount received by that State in fiscal year 2000, or until such funds are exhausted, which- ever first occurs.
(II) If any funds remain after the application of subclause (I), the remaining amount may be distrib- uted as supplemental grants to any State, as the Ad- ministration determines, in its discretion, to be appro- priate, after consultation with the association referred to in subsection (a)(3)(A). (v) USE OF AMOUNTS.—
(I) IN GENERAL.—Of the amounts made available in any fiscal year to carry out this section—
(aa) not more than $500,000 may be used by the Administration to pay expenses enumerated in subparagraphs (B) through (D) of section 20(a)(1); and
(bb) not more than $500,000 may be used by the Administration to pay the examination ex- penses enumerated in section 20(a)(1)(E). (II) LIMITATION.—No funds described in subclause
(I) may be used for examination expenses under sec- tion 20(a)(1)(E) if the usage would reduce the amount of grants made available under clause (i)(I) of this sub- paragraph to less than $85,000,000 (after excluding any amounts provided in appropriations Acts, or ac- companying report language, for specific institutions or for purposes other than the general small business development center program) or would further reduce the amount of such grants below such amount. (vi) EXCLUSIONS.—Grants provided to a State by the
Administration or another Federal agency to carry out sub- section (a)(6) or (c)(3)(G), or for supplemental grants set forth in clause (iv)(II) of this subparagraph, shall not be included in the calculation of maximum funding for a State under clause (ii) of this subparagraph.
(vii) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this subpara- graph—
(I) $130,000,000 for fiscal year 2005; and (II) $135,000,000 for fiscal year 2006.
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(viii) LIMITATION.—From the funds appropriated pur- suant to clause (vii), the Administration shall reserve not less than $1,000,000 in each fiscal year to develop portable assistance for startup and sustainability non-matching grant programs to be conducted by eligible small business development centers in communities that are economically challenged as a result of a business or government facility down sizing or closing, which has resulted in the loss of jobs or small business instability. A non-matching grant under this clause shall not exceed $100,000, and shall be used for small business development center personnel ex- penses and related small business programs and services.
(ix) STATE DEFINED.—In this subparagraph, the term ‘‘State’’ means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
(5) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT CENTERS.—
(A) IN GENERAL.—Subject to the conditions set forth in subparagraph (B), a small business development center may enter into a contract with a Federal department or agency to provide specific assistance to small business concerns.
(B) CONTRACT PREREQUISITES.—Before bidding on a con- tract described in subparagraph (A), a small business develop- ment center shall receive approval from the Associate Adminis- trator of the small business development center program of the subject and general scope of the contract. Each approval under subparagraph (A) shall be based upon a determination that the contract will provide assistance to small business concerns and that performance of the contract will not hinder the small busi- ness development center in carrying out the terms of the grant received by the small business development center from the Administration.
(C) EXEMPTION FROM MATCHING REQUIREMENT.—A contract under this paragraph shall not be subject to the matching funds or eligibility requirements of paragraph (4).
(D) ADDITIONAL PROVISION.—Notwithstanding any other provision of law, a contract for assistance under this paragraph shall not be applied to any Federal department or agency’s small business, woman-owned business, or socially and eco- nomically disadvantaged business contracting goal under sec- tion 15(g).
(6) 80 Any applicant which is funded by the Administration as a Small Business Development Center may apply for an ad- ditional grant to be used solely to assist—
(A) with the development and enhancement of exports by small business concerns;
(B) in technology transfer; and (C) with outreach, development, and enhancement of
minority-owned small business startups or expansions, HUBZone small business concerns, veteran-owned small business startups or expansions, and women-owned small
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business startups or expansions, in communities impacted by base closings or military or corporate downsizing, or in rural or underserved communities;
as provided under subparagraphs (B) through (G) of subsection (c)(3). Applicants for such additional grants shall comply with all of the provisions of this section, including providing match- ing funds, except that funding under this paragraph shall be effective for any fiscal year to the extent provided in advance in appropriations Acts and shall be in addition to the dollar program limitations specified in paragraphs (4) and (5). No re- cipient of funds under this paragraph shall receive a grant which would exceed its pro rata share of a $15,000,000 pro- gram based upon the populations to be served by the Small Business Development Center as compared to the total popu- lation of the United States. The minimum amount of eligibility for any State shall be $100,000.
(7) PRIVACY REQUIREMENTS.— (A) IN GENERAL.—A small business development cen-
ter, consortium of small business development centers, or contractor or agent of a small business development center may not disclose the name, address, or telephone number of any individual or small business concern receiving as- sistance under this section without the consent of such in- dividual or small business concern, unless—
(i) the Administrator is ordered to make such a disclosure by a court in any civil or criminal enforce- ment action initiated by a Federal or State agency; or
(ii) the Administrator considers such a disclosure to be necessary for the purpose of conducting a finan- cial audit of a small business development center, but a disclosure under this clause shall be limited to the information necessary for such audit. (B) ADMINISTRATOR USE OF INFORMATION.—This sec-
tion shall not— (i) restrict Administrator access to program activ-
ity data; or (ii) prevent the Administrator from using client
information to conduct client surveys. (C) REGULATIONS.—
(i) IN GENERAL.—The Administrator shall issue regulations to establish standards—
(I) for disclosures with respect to financial au- dits under subparagraph (A)(ii); and
(II) for client surveys under subparagraph (B)(ii), including standards for oversight of such surveys and for dissemination and use of client in- formation. (ii) MAXIMUM PRIVACY PROTECTION.—Regulations
under this subparagraph, shall, to the extent prac- ticable, provide for the maximum amount of privacy protection.
(iii) INSPECTOR GENERAL.—Until the effective date of regulations under this subparagraph, any client sur- vey and the use of such information shall be approved
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by the Inspector General who shall include such ap- proval in his semi-annual report.
(b)(1) Financial assistance shall not be made available to any applicant if approving such assistance would be inconsistent with a plan for the area involved which has been adopted by an agency recognized by the State government as authorized to do so and ap- proved by the Administration in accordance with the standards and requirements established pursuant to this section.
(2) An applicant may apply to participate in the program by submitting to the Administration for approval a plan naming those authorized in subsection (a) to participate in the program, the geo- graphic area to be served, the services that it would provide, the method for delivering services, a budget, and any other information and assurances the Administration may require to insure that the applicant will carry out the activities eligible for assistance. The Administration is authorized to approve, conditionally approve or reject a plan or combination of plans submitted. In all cases, the Administration shall review plans for conformity with the plan sub- mitted pursuant to paragraph (1) of this subsection, and with a view toward providing small business with the most comprehensive and coordinated assistance in the State or part thereof to be served.
(3) At the discretion of the Administration, the Administration is authorized to permit a small business development center to pro- vide advice, information and assistance, as described in subsection (c), to small businesses located outside the State, but only to the extent such businesses are located within close geographical prox- imity to the small business development center, as determined by the Administration.
(c)(1) Applicants receiving grants under this section shall assist small businesses in solving problems concerning operations, manu- facturing, engineering, technology exchange and development, per- sonnel administration, marketing, sales, merchandising, finance, accounting, business strategy development, and other disciplines required for small business growth and expansion, innovation, in- creased productivity, and management improvement, and for de- creasing industry economic concentrations.
(2) A small business development center shall provide services as close as possible to small businesses by providing extension services and utilizing satellite locations when necessary. The facili- ties and staff of each Small Business Development Center shall be located in such places as to provide maximum accessibility and benefits to the small businesses which the center is intended to serve. To the extent possible, it also shall make full use of other Federal and State government programs that are concerned with aiding small business. A small business development center shall have—
(A) a full-time staff, including a full-time director who shall have the authority to make expenditures under the cen- ter’s budget and who shall manage the program activities;
(B) access to business analysts to counsel, assist, and in- form small business clients;
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(C) access to technology transfer agent to provide state or art technology to small businesses through coupling with na- tional and regional technology data sources;
(D) access to information specialists to assist in providing information searches and referrals to small business;
(E) access to part-time professional specialists to conduct research or to provide counseling assistance whenever the need arises; and
(F) access to laboratory and adaptive engineering facilities. (3) Services provided by a small business development center
shall include, but shall not be limited to— (A) furnishing one-to-one individual counseling to small
businesses, including— (i) working with individuals to increase awareness of
basic credit practices and credit requirements; (ii) working with individuals to develop business
plans, financial packages, credit applications, and contract proposals;
(iii) working with the Administration to develop and provide informational tools for use in working with indi- viduals on pre-business startup planning, existing business expansion, and export planning; and
(iv) working with individuals referred by the local of- fices of the Administration and Administration partici- pating lenders; (B) assisting in technology transfer, research and develop-
ment, including applied research, and coupling from existing sources to small businesses, including—
(i) working to increase the access of small businesses to the capabilities of automated flexible manufacturing systems;
(ii) working through existing networks and developing new networks for technology transfer that encourage part- nership between the small business and academic commu- nities to help commercialize university-based research and development and introduce university-based engineers and scientists to their counterparts in small technology-based firms; and
(iii) exploring the viability of developing shared pro- duction facilities, under appropriate circumstances; (C) in cooperation with the Department of Commerce and
other relevant Federal agencies, actively assisting small busi- nesses in exporting by identifying and developing potential ex- port markets, facilitating export transactions, developing link- ages between United States small business firms and prescreened foreign buyers, assisting small businesses to par- ticipate in international trade shows, assisting small busi- nesses in obtaining export financing, and facilitating the devel- opment or reorientation of marketing and production strate- gies; where appropriate, the Small Business Development Cen- ter and the Administration may work in cooperation with the State to establish a State international trade center for these purposes;
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(D) developing a program in conjunction with the Export- Import Bank and local and regional Administration offices that will enable Small Business Development Centers to serve as an information network and to assist small business applicants for Export-Import Bank financing programs, and otherwise identify and help to make available export financing programs to small businesses;
(E) working closely with the small business community, small business consultants, State agencies, universities and other appropriate groups to make translation services more readily available to small business firms doing business, or at- tempting to develop business, in foreign markets;
(F) in providing assistance under this subsection, appli- cants shall cooperate with the Department of Commerce and other relevant Federal agencies to increase access to available export market information systems, including the CIMS sys- tem;
(G) assisting small businesses to develop and implement strategic business plans to timely and effectively respond to the planned closure (or reduction) of a Department of Defense facility within the community, or actual or projected reductions in such firms’ business base due to the actual or projected ter- mination (or reduction) of a Department of Defense program or a contract in support of such program—
(i) by developing broad economic assessments of the adverse impacts of—
(I) the closure (or reduction) of the Department of Defense facility on the small business concerns pro- viding goods or services to such facility or to the mili- tary and civilian personnel currently stationed or working at such facility; and
(II) the termination (or reduction) of a Depart- ment of Defense program (or contracts under such pro- gram) on the small business concerns participating in such program as a prime contractor, subcontractor or supplier at any tier; (ii) by developing, in conjunction with appropriate Fed-
eral, State, and local governmental entities and other pri- vate sector organizations, the parameters of a transition adjustment program adaptable to the needs of individual small business concerns;
(iii) by conducting appropriate programs to inform the affected small business community regarding the antici- pated adverse impacts identified under clause (i) and the economic adjustment assistance available to such firms; and
(iv) by assisting small business concerns to develop and implement an individualized transition business plan. (H) maintaining current information concerning Federal,
State, and local regulations that affect small businesses and counsel small businesses on methods of compliance. Counseling and technology development shall be provided when necessary to help small businesses find solutions for complying with envi-
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ronmental, energy, health, safety, and other Federal, State, and local regulations;
(I) coordinating and conducting research into technical and general small business problems for which there are no ready solutions;
(J) providing and maintaining a comprehensive library that contains current information and statistical data needed by small businesses;
(K) maintaining a working relationship and open commu- nications with the financial and investment communities, legal associations, local and regional private consultants, and local and regional small business groups and associations in order to help address the various needs of the small business com- munity;
(L) conducting in-depth surveys for local small business groups in order to develop general information regarding the local economy and general small businesses strengths and weaknesses in the locality;
(M) in cooperation with the Department of Commerce, the Administration and other relevant Federal agencies, actively assisting rural small businesses in exporting by identifying and developing potential export markets for rural small busi- nesses, facilitating export transactions for rural small busi- nesses, developing linkages between United States’ rural small businesses and prescreened foreign buyers, assisting rural small businesses to participate in international trade shows, assisting rural small businesses in obtaining export financing and developing marketing and production strategies;
(N) assisting rural small businesses— (i) in developing marketing and production strategies
that will enable them to better compete in the domestic market—
(ii) by providing technical assistance needed by rural small businesses;
(iii) by making available managerial assistance to rural small business concerns; and
(iv) by providing information and assistance in obtain- ing financing for business startups and expansion; (O) in conjunction with the United States Travel and Tour-
ism Administration, assist rural small business in developing the tourism potential of rural communities by—
(i) identifying the cultural, historic, recreational, and scenic resources of such communities;
(ii) providing assistance to small businesses in devel- oping tourism marketing and promotion plans relating to tourism in rural areas; and
(iii) assisting small business concerns to obtain capital for starting or expanding businesses primarily serving tourists; (P) maintaining lists of local and regional private consult-
ants to whom small business can be referred; (Q) providing information to small business concerns re-
garding compliance with regulatory requirements;
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(R) developing informational publications, establishing re- source centers of reference materials, and distributing compli- ance guides published under section 312(a) of the Small Busi- ness Regulatory Enforcement Fairness Act of 1996;
(S) providing small business owners with access to a wide variety of export-related information by establishing on-line computer linkages between small business development cen- ters and an international trade data information network with ties to the Export Assistance Center program; and
(T) providing information and assistance to small business concerns with respect to establishing drug-free workplace pro- grams on or before October 1, 2006. (4) A small business development center shall continue to up-
grade and modify its services, as needed, in order to meet the changing and evolving needs of the small business community.
(5) In addition to the methods prescribed in section 21(c)(2), a small business development center shall utilize and compensate as one of its resources qualified small business vendors, including but not limited to, private management consultants, private consulting engineers and private testing laboratories, to provide services as described in this subsection to small businesses on behalf of such small business development center.
(6) In any State (A) in which the Administration has not made a grant pursuant to paragraph (1) of subsection (a), or (B) in which no application for a grant has been made by a Small Business De- velopment Center pursuant to paragraph (6) of such subsection within 60 days after the effective date of any grant under sub- section (a)(1) to such center or the date the Administration notifies the grantee funded under subsection (a)(1) that funds are available for grant applications pursuant to subsection (a)(6), whichever date occurs last, the Administration may make grants to a non-profit entity in that State to carry out the activities specified in para- graph (6) of subsection (a). Any such applicants shall comply with the matching funds requirement of paragraph (4) of subsection (a). Such grants shall be effective for any fiscal year only to the extent provided in advance in appropriations Acts, and each State shall be limited to the pro rata share provisions of paragraph (6) of sub- section (a).
(7) In performing the services identified in paragraph (3), the Small Business Development Centers shall work in close cooperation with the Administration’s regional and local of- fices, the local small business community, and appropriate State and local agencies.
(8) The Associate Administrator for Small Business Devel- opment Centers, in consultation with the Small Business De- velopment Centers, shall develop and implement an informa- tion sharing system. Subject to amounts approved in advance in appropriations Acts, the Administration may make grants or enter cooperative agreements with one or more centers to carry out the provisions of this paragraph. Said grants or cooperative agreements shall be awarded for periods of no more than five years duration. The matching funds provisions of subsection (a) shall not be applicable to grants or cooperative agreements under this paragraph. The system shall—
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(A) allow Small Business Development Centers partici- pating in the program to exchange information about their programs; and
(B) provide information central to technology transfer. (d) Where appropriate, the Small Business Development Cen-
ters shall work in conjunction with the relevant State agency and the Department of Commerce to develop a comprehensive plan for enhancing the export potential of small businesses located within the State. This plan may involve the cofunding and staffing of a State Office of International Trade within the State Small Business Development Center, using joint State and Federal funding, and any other appropriate measures directed at improving the export performance of small businesses within the State.
(e) Laboratories operated and funded by the Federal Govern- ment are authorized and directed to cooperate with the Adminis- tration in developing and establishing programs to support small business development centers by making facilities and equipment available; providing experiment station capabilities in adaptive en- gineering; providing library and technical information processing capabilities; and providing professional staff for consulting. The Ad- ministration is authorized to reimburse the laboratories for such services.
(f) The National Science Foundation is authorized and directed to cooperate with the Administration and with the Small Business Development Centers in developing and establishing programs to support the centers.
(g) NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AND REGIONAL TECHNOLOGY TRANSFER CENTERS.—The National Aero- nautics and Space Administration and regional technology transfer centers supported by the National Aeronautics and Space Adminis- tration are authorized and directed to cooperate with small busi- ness development centers participating in the program.
(h) ASSOCIATE ADMINISTRATOR FOR SMALL BUSINESS DEVELOP- MENT CENTERS.—
(1) APPOINTMENT AND COMPENSATION.—The Administrator shall appoint an Associate Administrator for Small Business Development Centers who shall report to an official who is not more than one level below the Office of the Administrator and who shall serve without regard to the provisions of title 5, gov- erning appointments in the competitive service, and without regard to chapter 51, and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, but at a rate not less than the rate of GS–17 of the General Schedule.
(2) DUTIES.— (A) IN GENERAL.—The sole responsibility of the Asso-
ciate Administrator for Small Business Development Cen- ters shall be to administer the small business development center program. Duties of the position shall include recom- mending the annual program budget, reviewing the annual budgets submitted by each applicant, establishing appro- priate funding levels therefore, selecting applicants to par- ticipate in this program, implementing the provisions of this section, maintaining a clearinghouse to provide for the
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dissemination and exchange of information between small business development centers and conducting audits of re- cipients of grants under this section.
(B) CONSULTATION REQUIREMENTS.—In carrying out the duties described in this subsection, the Associate Ad- ministrator shall confer with and seek the advice of the Board established by subsection (i) and Administration of- ficials in areas served by the small business development centers; however, the Associate Administrator shall be re- sponsible for the management and administration of the program and shall not be subject to the approval or con- currence of such Administration officials.
(i)(1) There is established a National Small Business Develop- ment Center Advisory Board (herein referred to as ‘‘Board’’) which shall consist of nine members appointed from civilian life by the Administrator and who shall be persons of outstanding qualifica- tions known to be familiar and sympathetic with small business needs and problems. No more than three members shall be from universities or their affiliates and six shall be from small busi- nesses or associations representing small businesses. At the time of the appointment of the Board, the Administrator shall designate one-third of the members and at least one from each category whose term shall end in two years from the date of appointment, a second third whose term shall end in three years from the date of appointment, and the final third whose term shall end in four years from the date of appointment. Succeeding Boards shall have three-year terms, with one-third of the Board changing each year.
(2) The Board shall elect a Chairman and advise, counsel, and confer with the Associate Administrator for Small Business Devel- opment Centers in carrying out the duties described in this section. The Board shall meet at least semiannually and at the call of the Chairman of the Board. Each member of the Board shall be enti- tled to be compensated at the rate not in excess of the per diem equivalent of the highest rate of pay for individuals occupying the position under GS–18 of the General Schedule for each day en- gaged in activities of the Board and shall be entitled to be reim- bursed for expenses as a member of the Board.
(j)(1) Each small business development center shall establish an advisory board.
(2) Each small business development center advisory board shall elect a chairman and advise, counsel, and confer with the di- rector of the small business development center on all policy mat- ters pertaining to the operation of the small business development center, including who may be eligible to receive assistance from, and how local and regional private consultants may participate with the small business development center.
(k) PROGRAM EXAMINATION AND ACCREDITATION.— (1) EXAMINATION.—Not later than 180 days after the date
of enactment of this subsection, the Administration shall de- velop and implement a biennial programmatic and financial examination of each small business development center estab- lished pursuant to this section.
(2) ACCREDITATION.—The Administration may provide fi- nancial support, by contract or otherwise, to the association au-
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thorized by subsection (a)(3)(A) for the purpose of developing a small business development center accreditation program.
(3) EXTENSION OR RENEWAL OF COOPERATIVE AGREE- MENTS.—
(A) IN GENERAL.—In extending or renewing a coopera- tive agreement of a small business development center, the Administration shall consider the results of the examina- tion and accreditation program conducted pursuant to paragraphs (1) and (2).
(B) ACCREDITATION REQUIREMENT.—After September 30, 2000, the Administration may not renew or extend any cooperative agreement with a small business development center unless the center has been approved under the ac- creditation program conducted pursuant to this subsection, except that the Associate Administrator for Small Business Development Centers may waive such accreditation re- quirement, in the discretion of the Associate Adminis- trator, upon a showing that the center is making a good faith effort to obtain accreditation.
(l) CONTRACT AUTHORITY.—The authority to enter into con- tracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts. After the administration has entered a contract, either as a grant or a cooperative agreement, with any applicant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administration provides the applicant with written notification setting forth the reasons therefore and afford- ing the applicant an opportunity for a hearing, appeal, or other ad- ministrative proceeding under the provisions of chapter 5 of title 5, United States Code. If any contract or cooperative agreement under this section with an entity that is covered by this section is not re- newed or extended, any award of a successor contract or coopera- tive agreement under this section to another entity shall be made on a competitive basis.
(m) PROHIBITION ON CERTAIN FEES.—A small business develop- ment center shall not impose or otherwise collect a fee or other compensation in connection with the provision of counseling serv- ices under this section.
(n) VETERANS ASSISTANCE AND SERVICES PROGRAM.— (1) IN GENERAL.—A small business development center
may apply for a grant under this subsection to carry out a vet- erans assistance and services program.
(2) ELEMENTS OF PROGRAM.—Under a program carried out with a grant under this subsection, a small business develop- ment center shall—
(A) create a marketing campaign to promote aware- ness and education of the services of the center that are available to veterans, and to target the campaign toward veterans, service-disabled veterans, military units, Federal agencies, and veterans organizations;
(B) use technology-assisted online counseling and dis- tance learning technology to overcome the impediments to entrepreneurship faced by veterans and members of the Armed Forces; and
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(C) increase coordination among organizations that as- sist veterans, including by establishing virtual integration of service providers and offerings for a one-stop point of contact for veterans who are entrepreneurs or owners of small business concerns. (3) AMOUNT OF GRANTS.—A grant under this subsection
shall be for not less than $75,000 and not more than $250,000. (4) FUNDING.—Subject to amounts approved in advance in
appropriations Acts, the Administration may make grants or enter into cooperative agreements to carry out the provisions of this subsection.
SEC. 22. ø15 U.S.C. 649¿ OFFICE OF INTERNATIONAL TRADE. (a) ESTABLISHMENT.—
(1) OFFICE.—There is established within the Administra- tion 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 Adminis-
trator, working in close cooperation with the Secretary of Com- merce, the United States Trade Representative, the Secretary of Agriculture, the Secretary of State, the President of the Export-Im- port Bank of the United States, the President of the Overseas Pri- vate 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 devel- opment center network, networks of women’s business centers, the Service Corps of Retired Executives 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 para- graph (1) and disseminate information, including computerized marketing data, to small business concerns on exporting trends, market-specific growth, industry trends, and inter- national prospects for exports;
(3) promote export assistance programs through the dis- trict and regional offices of the Administration, the small busi- ness development center network, Export Assistance Centers,
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the network of women’s business centers, chapters of the Serv- ice Corps of Retired Executives, State and local export pro- motion 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 sub- section (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 Ad- ministrator 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 busi-
ness concerns and small manufacturers; (B) facilitating technology transfers; (C) enhancing programs and services to assist small
business concerns and small manufacturers to compete ef- fectively 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 pro- grams, develop a mechanism for—
(A) identifying subsectors of the small business com- munity 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, ac-
tively assist small business concerns in forming and using ex- port trading companies, export management companies and re- search and development pools authorized under section 9 of this Act;
(4) work in conjunction with other Federal agencies, re- gional and district offices of the Administration, the small busi- ness 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—
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(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 pro- duction of Gross State Product figures) and disseminate that data to the public and to Congress;
(B) make recommendations to the Secretary of Com- merce and to Congress regarding revision of the North American Industry Classification System codes to encom- pass 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 ex- port 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 infor-
mation 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 of- fices 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 fi- nance export operations;
(C) maintaining a directory of all Federal, regional, State and private sector programs that provide export in- formation and assistance to small business concerns; and
(D) preparing and publishing such reports as it deter- mines to be necessary concerning market conditions, sources of financing, export promotion programs, and other information pertaining to the needs of small business ex- port 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 devel- opment activities of the Department of Commerce;
(9) facilitate decentralized delivery of export information and assistance to small business concerns by assigning pri- mary 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 depart- ments and agencies;
(B) maintain a directory of all programs which provide export information and assistance to small business con- cerns in the region;
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(C) encourage financial institutions to develop and ex- pand 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 ap- pointment, 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 export- ers 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 tech- nology, online resources, training, and other strategies to pro- mote exporting as a business development opportunity for small business concerns;
(12) disseminate information to the small business commu- nity through regional and district offices of the Administration, the small business development center network, Export Assist- ance Centers, the network of women’s business centers, chap- ters of the Service Corps of Retired Executives authorized by section 8(b)(1), State and local export promotion programs, and partners in the private sector regarding exporting trends, mar- ket-specific growth, industry trends, and prospects for export- ing; 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 Develop- ment Center personnel can facilitate the access of small busi- nesses to relevant export financing programs of the Export-Im- port Bank of the United States and to export and pre-export financing programs available from the Administration and the private sector.
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(2) TRADE FINANCE SPECIALIST.—To accomplish the goal es- tablished under paragraph (1), the Associate Administrator shall—
(A) designate at least 1 individual within the Adminis- tration as a trade finance specialist to oversee inter- national loan programs and assist Administration employ- ees with trade finance issues; and
(B) work in cooperation with the Export-Import Bank and the small business community, including small busi- ness trade associations, to—
(i) aggressively market existing Administration export financing and pre-export financing programs;
(ii) identify financing available under various Ex- port-Import Bank programs, and aggressively market those programs to small businesses;
(iii) assist in the development of financial inter- mediaries and facilitate the access of those inter- mediaries to existing financing programs;
(iv) promote greater participation by private fi- nancial institutions, particularly those institutions al- ready participating in loan programs under this Act, in export finance; and
(v) provide for the participation of appropriate Ad- ministration 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 pro- ceedings 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 imple- menting the requirements of this section;
(2) a detailed account of the results of export growth activi- ties of the Administration, including the activities of each dis- trict 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 re- tained as a result of export assistance provided by the Admin- istration 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
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Office of Advocacy, and with other Federal agencies, shall under- take 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 spe- cific recommendations on—
(1) the viability and cost of establishing an annual, com- petitive 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 for- eign sales corporation tax incentives and providing small busi- nesses with greater benefits from this initiative;
(4) methods of identifying potential export markets for United States small businesses; maintaining and dissemi- nating current foreign market data; and devising a comprehen- sive export marketing strategy for United States small busi- ness goods and services, and shall include data on the volume and dollar amount of goods and services, identified by type, im- ported 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 incen- tives, and the private sector initiatives, which exist to encour- age 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 Adminis- trator;
(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 prin-
cipal 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 re- ceived 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 es-
tablish an export and trade counseling certification program to certify employees of lead small business development centers
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and lead women’s business centers in providing export assist- ance 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 ex- port 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 appro- priations, 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 de-
velop 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 re-
ceiving 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 as- sisted by programs of the Administration;
(D) the number of small business concerns referred to an Export Assistance Center or a small business develop- ment 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 Agri- culture, 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 Admin-
istrator shall develop joint performance measures for the dis- trict offices of the Administration and the Export Assistance Centers that include the number of export loans made under—
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(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 sec-
tion 7(a)(2)(C)(ii); and (D) the export express program established under sec-
tion 7(a)(34). (3) CONSISTENCY OF TRACKING.—The Associate Adminis-
trator, in coordination with the departments and agencies that are represented on the Trade Promotion Coordinating Com- mittee established under section 2312 of the Export Enhance- ment Act of 1988 (15 U.S.C. 4727) and the small business de- velopment center network, shall develop a system to track ex- ports by small business concerns, including information relat- ing 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 SPECIAL-
ISTS.—On and after the date that is 90 days after the date of enactment of this subsection, the Administrator, in co- ordination 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 Janu- ary 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 sub- section, the Administrator, in coordination with the Sec- retary of Commerce, shall ensure that there are not fewer than 3 export finance specialists in each region of the Ad- ministration. (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 as- signed to the Export Assistance Center during the pe- riod beginning January 2003, and ending on the date of enactment of this subsection, either through retire- ment or reassignment. (B) NEEDS OF EXPORTERS.—The Administrator shall, to
the maximum extent practicable, strategically assign Ad- ministration employees to Export Assistance Centers, based on the needs of exporters.
(C) RULE OF CONSTRUCTION.—Nothing in this sub- section may be construed to require the Administrator to reassign or remove an export finance specialist who is as-
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signed to an Export Assistance Center on the date of en- actment 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 Corpora- tion to establish shared annual goals for the Export Assistance Centers.
(4) OVERSIGHT.—The Associate Administrator shall des- ignate an individual within the Administration to oversee all activities conducted by Administration employees assigned to Export Assistance Centers. (l) DEFINITIONS.—In this section—
(1) the term ‘‘Associate Administrator’’ means the Asso- ciate Administrator for International Trade described in sub- section (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 Assist- ance 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).
SEC. 23. ø15 U.S.C. 650¿ SUPERVISORY AND ENFORCEMENT AUTHORITY FOR SMALL BUSINESS LENDING COMPANIES.
(a) IN GENERAL.—The Administrator is authorized— (1) to supervise the safety and soundness of small business
lending companies and non-Federally regulated lenders; (2) with respect to small business lending companies to set
capital standards to regulate, to examine, and to enforce laws governing such companies, in accordance with the purposes of this Act; and
(3) with respect to non-Federally regulated lenders to regu- late, to examine, and to enforce laws governing the lending ac- tivities of such lenders under section 7(a) in accordance with the purposes of this Act. (b) CAPITAL DIRECTIVE.—
(1) IN GENERAL.—If the Administrator determines that a small business lending company is being operated in an impru- dent manner, the Administrator may, in addition to any other action authorized by law, issue a directive to such company to increase capital to such level as the Administrator determines will result in the safe and sound operation of such company.
(2) DELEGATION.—The Administrator may not delegate the authority granted under paragraph (1) except to an Associate Deputy Administrator.
(3) REGULATIONS.—The Administrator shall issue regula- tions outlining the conditions under which the Administrator may determine the level of capital pursuant to paragraph (1). (c) CIVIL ACTION.—If a small business lending company vio-
lates this Act, the Administrator may institute a civil action in an
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appropriate district court to terminate the rights, privileges, and franchises of the company under this Act.
(d) REVOCATION OR SUSPENSION OF LOAN AUTHORITY.— (1) The Administrator may revoke or suspend the author-
ity of a small business lending company or a non-Federally reg- ulated lender to make, service or liquidate business loans au- thorized by section 7(a) of this Act—
(A) for false statements knowingly made in any writ- ten submission required under this Act;
(B) for omission of a material fact from any written submission required under this Act;
(C) for willful or repeated violation of this Act; (D) for willful or repeated violation of any condition
imposed by the Administrator with respect to any applica- tion, request, or agreement under this Act; or
(E) for violation of any cease and desist order of the Administrator under this section. (2) The Administrator may revoke or suspend authority
under paragraph (1) only after a hearing under subsection (f). The Administrator may delegate power to revoke or suspend authority under paragraph (1) only to the Deputy Adminis- trator and only if the Administrator is unavailable to take such action.
(A) The Administrator, after finding extraordinary cir- cumstances and in order to protect the financial or legal position of the United States, may issue a suspension order without conducting a hearing pursuant to subsection (f). If the Administrator issues a suspension under the pre- ceding sentence, the Administrator shall within two busi- ness days follow the procedures set forth in subsection (f).
(B) Any suspension under paragraph (1) shall remain in effect until the Administrator makes a decision pursu- ant to subparagraph (4) to permanently revoke the author- ity of the small business lending company or non-Federally regulated lender, suspend the authority for a time certain, or terminate the suspension. (3) The small business lending company or non-Federally
regulated lender must notify borrowers of a revocation and that a new entity has been appointed to service their loans. The Administrator or an employee of the Administration des- ignated by the Administrator may provide such notice to the borrower.
(4) Any revocation or suspension under paragraph (1) shall be made by the Administrator except that the Administrator shall delegate to an administrative law judge as that term is used in section 3105 of title 5, United States Code, the author- ity to conduct any hearing required under subsection (f). The Administrator shall base the decision to revoke on the record of the hearing. (e) CEASE AND DESIST ORDER.—
(1) Where a small business lending company, a non-Feder- ally regulated lender, or other person violates this Act or is en- gaging or is about to engage in any acts or practices which con- stitute or will constitute a violation of this Act, the Adminis-
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trator may order, after the opportunity for hearing pursuant to subsection (f), the company, lender, or other person to cease and desist from such action or failure to act. The Adminis- trator may delegate the authority under the preceding sen- tence only to the Deputy Administrator and only if the Admin- istrator is unavailable to take such action.
(2) The Administrator, after finding extraordinary cir- cumstances and in order to protect the financial or legal posi- tion of the United States, may issue a cease and desist order without conducting a hearing pursuant to subsection (f). If the Administrator issues a cease and desist order under the pre- ceding sentence, the Administrator shall within two business days follow the procedures set forth in subsection (f).
(3) The Administrator may further order such small busi- ness lending company or non-Federally regulated lender or other person to take such action or to refrain from such action as the Administrator deems necessary to insure compliance with this Act.
(4) A cease and desist order under this subsection may also provide for the suspension of authority to lend in subsection (d). (f) PROCEDURE FOR REVOCATION OR SUSPENSION OF LOAN AU-
THORITY AND FOR CEASE AND DESIST ORDER.— (1) Before revoking or suspending authority under sub-
section (d) or issuing a cease and desist order under subsection (e), the Administrator shall serve an order to show cause upon the small business lending company, non-Federally regulated lender, or other person why an order revoking or suspending the authority or a cease and desist order should not be issued. The order to show cause shall contain a statement of the mat- ters of fact and law asserted by the Administrator and the legal authority and jurisdiction under which a hearing is to be held, and shall set forth that a hearing will be held before an administrative law judge at a time and place stated in the order. Such hearing shall be conducted pursuant to the provi- sions of sections 554, 556, and 557 of title 5, United States Code. If after hearing, or a waiver thereof, the Administrator determines that an order revoking or suspending the authority or a cease and desist order should be issued, the Administrator shall promptly issue such order, which shall include a state- ment of the findings of the Administrator and the grounds and reasons therefor and specify the effective date of the order, and shall cause the order to be served on the small business lend- ing company, non-Federally regulated lender, or other person involved.
(2) Witnesses summoned before the Administrator shall be paid by the party at whose instance they were called the same fees and mileage that are paid witnesses in the courts of the United States.
(3) A cease and desist order, suspension or revocation issued by the Administrator, after the hearing under this sub- section is final agency action for purposes of chapter 7 of title 5, United States Code. An adversely aggrieved party shall have 20 days from the date of issuance of the cease and desist order,
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suspension or revocation, to seek judicial review in an appro- priate district court. (g) REMOVAL OR SUSPENSION OF MANAGEMENT OFFICIAL.—
(1) DEFINITION.—In this section, the term ‘‘management of- ficial’’ means, with respect to a small business lending com- pany or a non-Federally regulated lender, an officer, director, general partner, manager, employee, agent, or other partici- pant in the management of the affairs of the company’s or lender’s activities under section 7(a) of this Act.
(2) REMOVAL OF MANAGEMENT OFFICIAL.— (A) NOTICE.—The Administrator may serve upon any
management official a written notice of its intention to re- move that management official if, in the opinion of the Ad- ministrator, the management official—
(i) willfully and knowingly commits a substantial violation of—
(I) this Act; (II) any regulation issued under this Act; (III) a final cease-and-desist order under this
Act; or (IV) any agreement by the management offi-
cial, the small business lending company or non- Federally regulated lender under this Act; or (ii) willfully and knowingly commits a substantial
breach of a fiduciary duty of that person as a manage- ment official and the violation or breach of fiduciary duty is one involving personal dishonesty on the part of such management official. (B) CONTENTS OF NOTICE.—A notice under subpara-
graph (A) shall contain a statement of the facts consti- tuting grounds therefor and shall fix a time and place at which a hearing, conducted pursuant to sections 554, 556, and 557 of title 5, United States Code, will be held there- on.
(C) HEARING.— (i) TIMING.—A hearing under subparagraph (B)
shall be held not earlier than 30 days and later than 60 days after the date of service of notice of the hear- ing, unless an earlier or a later date is set by the Ad- ministrator at the request of—
(I) the management official, and for good cause shown; or
(II) the Attorney General. (ii) CONSENT.—Unless the management official ap-
pears at a hearing under this paragraph in person or by a duly authorized representative, the management official shall be deemed to have consented to the issuance of an order of removal under subparagraph (A). (D) ORDER OF REMOVAL.—
(i) IN GENERAL.—In the event of consent under subparagraph (C)(ii), or if upon the record made at a hearing under this subsection, the Administrator finds that any of the grounds specified in the notice of re-
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moval has been established, the Administrator may issue such orders of removal from office as the Admin- istrator deems appropriate.
(ii) EFFECTIVENESS.—An order under clause (i) shall—
(I) take effect 30 days after the date of service upon the subject small business lending company or non-Federally regulated lender and the man- agement official concerned (except in the case of an order issued upon consent as described in sub- paragraph (C)(ii), which shall become effective at the time specified in such order); and
(II) remain effective and enforceable, except to such extent as it is stayed, modified, terminated, or set aside by action of the Administrator or a re- viewing court in accordance with this section.
(3) AUTHORITY TO SUSPEND OR PROHIBIT PARTICIPATION.— (A) IN GENERAL.—In order to protect a small business
lending company, a non-Federally regulated lender or the interests of the Administration or the United States, the Administrator may suspend from office or prohibit from further participation in any manner in the management or conduct of the affairs of a small business lending company or a non-Federally regulated lender a management official by written notice to such effect served upon the manage- ment official. Such suspension or prohibition may prohibit the management official from making, servicing, review- ing, approving, or liquidating any loan under section 7(a) of this Act.
(B) EFFECTIVENESS.—A suspension or prohibition under subparagraph (A)—
(i) shall take effect upon service of notice under paragraph (2); and
(ii) unless stayed by a court in proceedings author- ized by subparagraph (C), shall remain in effect—
(I) pending the completion of the administra- tive proceedings pursuant to a notice of intention to remove served under paragraph (2); and
(II) until such time as the Administrator dis- misses the charges specified in the notice, or, if an order of removal or prohibition is issued against the management official, until the effective date of any such order.
(C) JUDICIAL REVIEW OF SUSPENSION PRIOR TO HEAR- ING.—Not later than 10 days after a management official is suspended or prohibited from participation under sub- paragraph (A), the management official may apply to an appropriate district court for a stay of the suspension or prohibition pending the completion of the administrative proceedings pursuant to a notice of intent to remove served upon the management official under paragraph (2). (4) AUTHORITY TO SUSPEND ON CRIMINAL CHARGES.—
(A) IN GENERAL.—If a management official is charged in any information, indictment, or complaint authorized by
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a United States attorney, with a felony involving dishon- esty or breach of trust, the Administrator may, by written notice served upon the management official, suspend the management official from office or prohibit the manage- ment official from further participation in any manner in the management or conduct of the affairs of the small business lending company or non-Federally regulated lend- er.
(B) EFFECTIVENESS.—A suspension or prohibition under subparagraph (A) shall remain in effect until the in- formation, indictment, or complaint is finally disposed of, or until terminated by the Administrator or upon an order of a district court.
(C) AUTHORITY UPON CONVICTION.—If a judgment of conviction with respect to an offense described in subpara- graph (A) is entered against a management official, then at such time as the judgment is not subject to further judi- cial review (and for purposes of this subparagraph shall not include any petition for a writ of habeas corpus), the Administrator may issue and serve upon the management official an order removing the management official, effec- tive upon service of a copy of the order upon the small business lending company or non-Federally regulated lend- er.
(D) AUTHORITY UPON DISMISSAL OR OTHER DISPOSI- TION.—A finding of not guilty or other disposition of charges described in subparagraph (A) shall not preclude the Administrator from instituting proceedings under sub- section (e) or (f). (5) NOTIFICATION TO SMALL BUSINESS LENDING COMPANY
OR A NON-FEDERALLY REGULATED LENDER.—Copies of each no- tice required to be served on a management official under this section shall also be served upon the small business lending company or non-Federally regulated lender involved.
(6) FINAL AGENCY ACTION AND JUDICIAL REVIEW.— (A) ISSUANCE OF ORDERS.—After a hearing under this
subsection, and not later than 30 days after the Adminis- trator notifies the parties that the case has been submitted for final decision, the Administrator shall render a decision in the matter (which shall include findings of fact upon which its decision is predicated), and shall issue and cause to be served upon each party to the proceeding an order or orders consistent with this section. The decision of the Administrator shall constitute final agency action for pur- poses of chapter 7 of title 5, United States Code.
(B) JUDICIAL REVIEW.—An adversely aggrieved party shall have 20 days from the date of issuance of the order to seek judicial review in an appropriate district court.
(h) APPOINTMENT OF RECEIVER.— (1) In any proceeding under subsection (f)(4) or subsection
(g)(6)(C), the court may take exclusive jurisdiction of a small business lending company or a non-Federally regulated lender and appoint a receiver to hold and administer the assets of the company or lender.
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(2) Upon request of the Administrator, the court may ap- point the Administrator as a receiver under paragraph (1). (i) POSSESSION OF ASSETS.—
(1) If a small business lending company or a non-Federally regulated lender is not in compliance with capital require- ments or is insolvent, the Administrator may take possession of the portfolio of loans guaranteed by the Administrator and sell such loans to a third party by means of a receiver ap- pointed under subsection (h).
(2) If a small business lending company or a non-Federally regulated lender is not in compliance with capital require- ments or is insolvent or otherwise operating in an unsafe and unsound condition, the Administrator may take possession of servicing activities of loans that are guaranteed by the Admin- istrator and sell such servicing rights to a third party by means of a receiver appointed under subsection (h). (j) PENALTIES AND FORFEITURES.—
(1) Except as provided in paragraph (2), a small business lending company or a non-Federally regulated lender which violates any regulation or written directive issued by the Ad- ministrator regarding the filing of any regular or special report shall pay to the United States a civil penalty of not more than $5,000 for each day of the continuance of the failure to file such report, unless it is shown that such failure is due to rea- sonable cause and not due to willful neglect. The civil penalties under this subsection may be enforced in a civil action brought by the Administrator. The penalties under this subsection shall not apply to any affiliate of a small business lending company that procures at least 10 percent of its annual purchasing re- quirements from small manufacturers.
(2) The Administrator may by rules and regulations that shall be codified in the Code of Federal Regulations, after an opportunity for notice and comment, or upon application of an interested party, at any time previous to such failure, by order, after notice and opportunity for hearing which shall be con- ducted pursuant to sections 554, 556, and 557 of title 5, United States Code, exempt in whole or in part, any small business lending company or non-Federally regulated lender from para- graph (1), upon such terms and conditions and for such period of time as it deems necessary and appropriate, if the Adminis- trator finds that such action is not inconsistent with the public interest or the protection of the Administration. The Adminis- trator may for the purposes of this section make any alter- native requirements appropriate to the situation. SEC. 24. ø15 U.S.C. 651¿ (a) The Administrator is authorized
to make grants to or to enter into contracts with any State for the purpose of contracting with small businesses to plant trees on land owned or controlled by such State or local government. The Admin- istrator shall require as a condition of any grant (or amendment or modification thereof) under this section that the applicant also con- tribute to the project a sum equal to at least 25 per centum of a particular project cost from sources other than the Federal Govern- ment. Such non-Federal money may include inkind contributions, including the cost or value of providing care and maintenance for
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a period of three years after the planting of the trees, but shall not include any value attributable to the land on which the trees are to be planted, nor may any part of any grant be used to pay for land or land charges: Provided, That not less than one-half of the amounts appropriated under this section shall be allocated to each State, the District of Columbia, and the Commonwealth of Puerto Rico on the basis of the population in each area as compared to the total population in all areas as provided by the Census Bureau of the Department of Commerce in the annual population estimate or the decennial census, whichever is most current. The Adminis- trator may give a priority in awarding the remaining one-half of appropriated amounts to applicants who agree to contribute more than the requisite 25 per centum, and shall give priority to a pro- posal to restore an area determined to be a major disaster by the President on a date not more than three years prior to the fiscal year for which the application is made.
(b) In order to accomplish the objectives of this section, the Ad- ministrator, in consultation with appropriate Federal agencies, shall be responsible for formulating a national small business tree planting program. Based on this program, a State may submit a detailed proposal for tree planting by contract.
(c) To encourage and develop the capacity of small business concerns, to utilize this important segment of our economy, and to permit rapid increases in employment opportunities in local com- munities, grantees are directed to utilize small business contractors or concerns in connection with the program established by this sec- tion, and shall, to the extent practicable, divide the project to allow more than one small business concern to perform the work under the project.
(d) For purposes of this section, agencies of the Federal Gov- ernment are hereby authorized to cooperate with all grantees and with State foresters or other appropriate officials by providing without charge, in furtherance of this program, technical services with respect to the planting and growing of such trees.
(e) There are authorized to be appropriated to carry out the ob- jectives of this section, $15,000,000 for fiscal year 1991 and $30,000,000 for each of the fiscal years 1995 through 1997, and all of such sums may remain available until expended.
(f) Notwithstanding any other law, rule, or regulation, the ad- ministration shall publish in the Federal Register proposed rules and regulations implementing this section within sixty days after the date of enactment of this section and shall publish final rules and regulations within one hundred and twenty days of the date of enactment of this section.
(g) As used in this section: (1) the term ‘‘local government’’ includes political subdivi-
sions of a State such as counties, parishes, cities, towns and municipalities;
(2) the term ‘‘planting’’ includes watering, application of fertilizer and herbicides, pruning and shaping, and other sub- sequent care and maintenance for a period of three years after the trees are planted; and
(3) the term ‘‘State’’ includes any agency thereof.
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(h) The Administrator shall submit annually to the President and the Congress a report on activities within the scope of this sec- tion.
SEC. 25. ø15 U.S.C. 652¿ (a) There is hereby established a Cen- tral European Small Business Enterprise Development Commission (hereinafter in this section referred to as the ‘‘Commission’’). The Commission shall be comprised of a representative of each of the following: the Small Business Administration, the Association of American Universities, and the Association of Small Business De- velopment Centers.
(b) The Commission shall develop in Czechoslovakia, Poland and Hungary (hereinafter referred to as ‘‘designated Central Euro- pean countries’’) a self-sustaining system to provide management and technical assistance to small business owners.
(1) Not later than 90 days after the effective date of this section, the Commission, in consultation with the Agency for International Development, shall enter a contract with one or more entities to—
(A) determine the needs of small businesses in the designated Central European countries for management and technical assistance;
(B) evaluate appropriate Small Business Development Center-programs which might be replicated in order to meet the needs of each of such countries; and
(C) identify and assess the capability of educational in- stitutions in each such country to develop a Small Busi- ness Development Center type program. (2) Not later than 18 months after the effective date of this
section, the Commission shall review the recommendations submitted to it and shall formulate and contract for the estab- lishment of a three-year management and technical assistance demonstration program. (c) In order to be eligible to participate, the educational institu-
tion in each designated Central European country shall— (1) obtain the prior approval of the government to conduct
the program; (2) agree to provide partial financial support for the pro-
gram, either directly or indirectly, during the second and third years of the demonstration program; and
(3) agree to obtain private sector involvement in the deliv- ery of assistance under the program. (d) The Commission shall meet and organize not later than 30
days after the date of enactment of this section. (e) Members of the Commission shall serve without pay, except
they shall be entitled to reimbursement for travel, subsistence, and other necessary expenses incurred by them in carrying out their functions in the same manner as persons employed intermittently in the Federal Government are allowed expenses under section 5703 of title 5, United States Code.
(f) Two Commissioners shall constitute a quorum for the trans- action of business. Meetings shall be at the call of the Chairperson who shall be elected by the Members of the Commission.
(g) The Commission shall not have any authority to appoint staff, but upon request of the Chairperson, the head of any Federal
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department or agency may detail, on a reimbursable basis, any of the personnel of such department or agency to the Commission to assist in carrying out the Commission’s functions under this section without regard to section 3341 of title 5 of the United States Code. The Administrator of the General Services Administration shall provide, on a reimbursable basis, such administrative support serv- ices as the Commission may request.
(h) The Commission shall report to Congress not later than De- cember 1, 1991, and annually thereafter, on the progress in car- rying out the provisions of this section.
(i) There are hereby authorized to be appropriated to the Small Business Administration the sum of $3,000,000 for fiscal year 1991, $5,000,000 for fiscal year 1992, $2,000,000 for each of fiscal years 1993 and 1994, and $1,000,000 for fiscal year 1995 to carry out the provisions of this section. Such sums shall be disbursed by the Small Business Administration as requested by the Commission and may remain available until expended. Any authority to enter contracts or other spending authority provided for in this section is subject to amounts provided for in advance in appropriations Acts. SEC. 26. ø15 U.S.C. 653¿ OFFICE OF RURAL AFFAIRS.
(a) There is hereby established in the Small Business Adminis- tration an Office of Rural Affairs (hereafter in this section referred to as the ‘‘Office’’).
(b) The Office shall be headed by a director who shall be ap- pointed by the Administrator not later than 90 days after the date of the enactment of this section.
(c) The Office shall— (1) strive to achieve an equitable distribution of the finan-
cial assistance available from the Administration for small business concerns located in rural areas;
(2) to the extent practicable, compile annual statistics on rural areas, including statistics concerning the population, pov- erty, job creation and retention, unemployment, business fail- ures, and business startups;
(3) provide information to industries, organizations, and State and local governments concerning the assistance avail- able to rural small business concerns through the Administra- tion and through other Federal departments and agencies;
(4) provide information to industries, organizations, edu- cational institutions, and State and local governments con- cerning programs administered by private organizations, edu- cational institutions, and Federal, State, and local govern- ments which improve the economic opportunities of rural citi- zens; and
(5) work with the United States Tourism and Travel Ad- ministration to assist small businesses in rural areas with tourism promotion and development.
SEC. 27. ø15 U.S.C. 654¿ PAUL D. COVERDELL DRUG-FREE WORKPLACE PROGRAM.
(a) DEFINITIONS.—In this section: (1) DRUG-FREE WORKPLACE PROGRAM.—The term ‘‘drug-free
workplace program’’ means a program that includes—
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(A) a written policy, including a clear statement of ex- pectations for workplace behavior, prohibitions against re- porting to work or working under the influence of illegal drugs or alcohol, prohibitions against the use or possession of illegal drugs in the workplace, and the consequences of violating those expectations and prohibitions;
(B) drug and alcohol abuse prevention training for a total of not less than 2 hours for each employee, and addi- tional voluntary drug and alcohol abuse prevention train- ing for employees who are parents;
(C) employee illegal drug testing, with analysis con- ducted by a drug testing laboratory certified by the Sub- stance Abuse and Mental Health Services Administration, or approved by the College of American Pathologists for fo- rensic drug testing, and a review of each positive test re- sult by a medical review officer;
(D) employee access to an employee assistance pro- gram, including confidential assessment, referral, and short-term problem resolution; and
(E) continuing alcohol and drug abuse prevention edu- cation. (2) ELIGIBLE INTERMEDIARY.—The term ‘‘eligible inter-
mediary’’ means an organization— (A) that has not less than 2 years of experience in car-
rying out drug-free workplace programs; (B) that has a drug-free workplace policy in effect; (C) that is located in a State, the District of Columbia,
or a territory of the United States; and (D)(i) the purpose of which is—
(I) to develop comprehensive drug-free work- place programs or to supply drug-free workplace services; or
(II) to provide other forms of assistance and services to small business concerns; or (ii) that is eligible to receive a grant under chap-
ter 2 of the National Narcotics Leadership Act of 1988 (21 U.S.C. 1521 et seq.).
(3) EMPLOYEE.—The term ‘‘employee’’ includes any— (A) applicant for employment; (B) employee; (C) supervisor; (D) manager; (E) officer of a small business concern who is active in
management of the concern; and (F) owner of a small business concern who is active in
management of the concern. (4) MEDICAL REVIEW OFFICER.—The term ‘‘medical review
officer’’— (A) means a licensed physician with knowledge of sub-
stance abuse disorders; and (B) does not include any—
(i) employee of the small business concern; or
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(ii) employee or agent of, or any person having a financial interest in, the laboratory for which the ille- gal drug test results are being reviewed.
(b) ESTABLISHMENT.— (1) IN GENERAL.—There is established a drug-free work-
place demonstration program, under which the Administrator may make grants to, or enter into cooperative agreements or contracts with, eligible intermediaries for the purpose of pro- viding financial and technical assistance to small business con- cerns seeking to establish a drug-free workplace program.
(2) ADDITIONAL GRANTS FOR TECHNICAL ASSISTANCE.—In addition to grants under paragraph (1), the Administrator may make grants to, or enter into cooperative agreements or con- tracts with, any grantee for the purpose of providing, in co- operation with one or more small business development cen- ters, technical assistance to small business concerns seeking to establish a drug-free workplace program.
(3) 2-YEAR GRANTS.—Each grant made under this sub- section shall be for a period of 2 years, subject to an annual performance review by the Administrator. (c) PROMOTION OF EFFECTIVE PRACTICES OF ELIGIBLE INTER-
MEDIARIES.— (1) TECHNICAL ASSISTANCE AND INFORMATION.—The Ad-
ministrator, after consultation with the Director of the Center for Substance Abuse and Prevention, shall provide technical assistance and information to each eligible intermediary under subsection (b) regarding the most effective practices in estab- lishing and carrying out drug-free workplace programs.
(2) EVALUATION OF PROGRAM.— (A) DATA COLLECTION AND ANALYSIS.—Each eligible
intermediary receiving a grant under this section shall es- tablish a system to collect and analyze information regard- ing the effectiveness of drug-free workplace programs es- tablished with assistance provided under this section through the intermediary, including information regarding any increase or decrease among employees in drug use, awareness of the adverse consequences of drug use, and absenteeism, injury, and disciplinary problems related to drug use. Such system shall conform to such requirements as the Administrator, after consultation with the Director of the Center for Substance Abuse and Prevention, may prescribe. Not more than 5 percent of the amount of each grant made under subsection (b) shall be used by the eligi- ble intermediary to carry out this paragraph.
(B) METHOD OF EVALUATION.—The Administrator, after consultation with the Director of the Center for Sub- stance Abuse and Prevention, shall provide technical as- sistance and guidance to each eligible intermediary receiv- ing a grant under subsection (b) regarding the collection and analysis of information to evaluate the effectiveness of drug-free workplace programs established with assistance provided under this section, including the information re- ferred to in paragraph (1). Such assistance shall include the identification of additional information suitable for
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measuring the benefits of drug-free workplace programs to the small business concern and to the concern’s employees and the identification of methods suitable for analyzing such information.
(d) EVALUATION AND COORDINATION.—Not later than 18 months after the date of enactment of the Drug-Free Workplace Act of 1998, the Administrator, in coordination with the Secretary of Labor, the Secretary of Health and Human Services, and the Di- rector of National Drug Control Policy, shall—
(1) evaluate the drug-free workplace programs established with assistance made available under this section; and
(2) submit to Congress a report describing the results of the evaluation under paragraph (1). (e) CONTRACT AUTHORITY.—In carrying out this section, the
Administrator may— (1) contract with public and private entities to provide as-
sistance related to carrying out the program under this section; and
(2) compensate those entities for provision of that assist- ance. (f) CONSTRUCTION.—Nothing in this section may be construed
to require an employer who attends a program offered by an inter- mediary to contract for any service offered by the intermediary.
(g) AUTHORIZATION.— (1) IN GENERAL.—There is authorized to be appropriated to
carry out this section (other than subsection (b)(2)), $5,000,000 for each of fiscal years 2005 and 2006. Amounts made avail- able under this paragraph shall remain available until ex- pended.
(2) SMALL BUSINESS DEVELOPMENT CENTERS.—Of the total amount made available under paragraph (1) for each of fiscal years 2005 and 2006, not more than the greater of 10 percent or $500,000 may be used to carry out section 21(c)(3)(T).
(3) ADDITIONAL AUTHORIZATION FOR TECHNICAL ASSISTANCE GRANTS.—There are authorized to be appropriated to carry out subsection (b)(2), $1,500,000 for each of fiscal years 2005 and 2006. Amounts made available under this paragraph shall re- main available until expended.
(4) LIMITATION ON ADMINISTRATIVE COSTS.—Not more than 5 percent of the total amount made available under this sub- section for any fiscal year shall be used for administrative costs (determined without regard to the administrative costs of eligible intermediaries).
SEC. 28. ø15 U.S.C. 655¿ PILOT TECHNOLOGY ACCESS PROGRAM. (a) ESTABLISHMENT.—The Administration, in consultation with
the National Institute of Standards and Technology and the Na- tional Technical Information Service, shall establish a Pilot Tech- nology Access Program, for making awards under this section to Small Business Development Centers (hereinafter in this section referred to as ‘‘Centers’’).
(b) CRITERIA FOR SELECTION OF CENTERS.—The Administrator of the Small Business Administration shall establish competitive,
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merit-based criteria for the selection of Centers to receive awards on the basis of—
(1) the ability of the applicant to carry out the purposes described in subsection (d) in a manner relevant to the needs of industries in the area served by the Center;
(2) the ability of the applicant to integrate the implemen- tation of this program with existing Federal and State tech- nical and business assistance resources; and
(3) the ability of the applicant to continue providing tech- nology access after the termination of this pilot program. (c) MATCHING REQUIREMENT.—To be eligible to receive an
award under this section, an applicant shall provide a matching contribution at least equal to that received under such award, not more than 50 percent of which may be waived overhead or in-kind contributions.
(d) PURPOSE OF AWARDS.—Awards made under this section shall be for the purpose of increasing access by small businesses to on-line data base services that provide technical and business infor- mation, and access to technical experts, in a wide range of tech- nologies, through such activities as—
(1) defraying the cost of access by small businesses to the data base services;
(2) training small businesses in the use of the data base services; and
(3) establishing a public point of access to the data base services.
Activities described in paragraphs (1) through (3) may be carried out through contract with a private entity.
(e) RENEWAL OF AWARDS.—Awards previously made under sec- tion 21A of this Act may be renewed under this section.
(f) INTERIM REPORT.—Two years after the date on which the first award was issued under section 21A of this Act, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science, and Transportation of the Senate, an interim report on the implementation of the program under such section and this section, including the judgments of the participating Centers as to its effect on small business productivity and innovation.
(g) FINAL REPORT.—Three years after such date, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science and Transportation of the Senate, a final report evaluating the effectiveness of the Program under section 21A and this section in improving small business productivity and innovation.
(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Small Business Administration $5 million for each of fiscal years 1992 through 1995 to carry out this section, and such amounts may remain available until expended.
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81 So in law.
(i) 81 Centers are encouraged to seek funding from Federal and non-Federal sources other than those provided for in this section to assist small businesses in the identification of appropriate tech- nologies to fill their needs, the transfer of technologies from Fed- eral laboratories, public and private universities, and other public and private institutions, the analysis of commercial opportunities represented by such technologies, and such other functions as the development, business planning, market research, and financial packaging required for commercialization. Insofar as such Centers pursue these activities, Federal agencies are encouraged to employ these Centers to interface with small businesses for such purposes as facilitating small business participation in Federal procurement and fostering commercialization of Federally-funded research and development. SEC. 29. ø15 U.S.C. 656¿ WOMEN’S BUSINESS CENTER PROGRAM.
(a) DEFINITIONS.—In this section— (1) the term ‘‘Assistant Administrator’’ means the Assist-
ant Administrator of the Office of Women’s Business Owner- ship established under subsection (g);
(2) the term ‘‘private nonprofit organization’’ means an en- tity that is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code;
(3) the term ‘‘small business concern owned and controlled by women’’, either startup or existing, includes any small busi- ness concern—
(A) that is not less than 51 percent owned by 1 or more women; and
(B) the management and daily business operations of which are controlled by 1 or more women; and (4) the term ‘‘women’s business center site’’ means the lo-
cation of— (A) a women’s business center; or (B) 1 or more women’s business centers, established in
conjunction with another women’s business center in an- other location within a State or region—
(i) that reach a distinct population that would oth- erwise not be served;
(ii) whose services are targeted to women; and (iii) whose scope, function, and activities are simi-
lar to those of the primary women’s business center or centers in conjunction with which it was established.
(b) AUTHORITY.—The Administration may provide financial as- sistance to private nonprofit organizations to conduct 5-year projects for the benefit of small business concerns owned and con- trolled by women. The projects shall provide—
(1) financial assistance, including training and counseling in how to apply for and secure business credit and investment capital, preparing and presenting financial statements, and managing cash flow and other financial operations of a busi- ness concern;
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(2) management assistance, including training and coun- seling in how to plan, organize, staff, direct, and control each major activity and function of a small business concern; and
(3) marketing assistance, including training and coun- seling in identifying and segmenting domestic and inter- national market opportunities, preparing and executing mar- keting plans, developing pricing strategies, locating contract opportunities, negotiating contracts, and utilizing varying pub- lic relations and advertising techniques. (c) CONDITIONS OF PARTICIPATION.—
(1) NON-FEDERAL CONTRIBUTIONS.—As a condition of re- ceiving financial assistance authorized by this section, the re- cipient organization shall agree to obtain, after its application has been approved and notice of award has been issued, cash contributions from non-Federal sources as follows:
(A) in the first and second years, 1 non-Federal dollar for each 2 Federal dollars; and
(B) in the third, fourth, and fifth years, 1 non-Federal dollar for each Federal dollar. (2) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more
than one-half of the non-Federal sector matching assistance may be in the form of in-kind contributions that are budget line items only, including office equipment and office space.
(3) FORM OF FEDERAL CONTRIBUTIONS.—The financial as- sistance authorized pursuant to this section may be made by grant, contract, or cooperative agreement and may contain such provision, as necessary, to provide for payments in lump sum or installments, and in advance or by way of reimburse- ment. The Administration may disburse up to 25 percent of each year’s Federal share awarded to a recipient organization after notice of the award has been issued and before the non- Federal sector matching funds are obtained.
(4) FAILURE TO OBTAIN NON-FEDERAL FUNDING.—If any re- cipient of assistance fails to obtain the required non-Federal contribution during any project, it shall not be eligible there- after for advance disbursements pursuant to paragraph (3) during the remainder of that project, or for any other project for which it is or may be funded by the Administration, and prior to approving assistance to such organization for any other projects, the Administration shall specifically determine wheth- er the Administration believes that the recipient will be able to obtain the requisite non-Federal funding and enter a written finding setting forth the reasons for making such determina- tion. (d) CONTRACT AUTHORITY.—A women’s business center may
enter into a contract with a Federal department or agency to pro- vide specific assistance to women and other underserved small business concerns. Performance of such contract should not hinder the women’s business centers in carrying out the terms of the grant received by the women’s business centers from the Administration.
(e) SUBMISSION OF 5-YEAR PLAN.—Each applicant organization initially shall submit a 5-year plan to the Administration on pro- posed fundraising and training activities, and a recipient organiza-
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tion may receive financial assistance under this program for a max- imum of 5 years per women’s business center site.
(f) CRITERIA.—The Administration shall evaluate and rank ap- plicants in accordance with predetermined selection criteria that shall be stated in terms of relative importance. Such criteria and their relative importance shall be made publicly available and stat- ed in each solicitation for applications made by the Administration. The criteria shall include—
(1) the experience of the applicant in conducting programs or ongoing efforts designed to impart or upgrade the business skills of women business owners or potential owners;
(2) the present ability of the applicant to commence a project within a minimum amount of time;
(3) the ability of the applicant to provide training and serv- ices to a representative number of women who are both socially and economically disadvantaged; and
(4) the location for the women’s business center site pro- posed by the applicant. (g) OFFICE OF WOMEN’S BUSINESS OWNERSHIP.—
(1) ESTABLISHMENT.—There is established within the Ad- ministration an Office of Women’s Business Ownership, which shall be responsible for the administration of the Administra- tion’s programs for the development of women’s business enter- prises (as defined in section 408 of the Women’s Business Own- ership Act of 1988 (15 U.S.C. 631 note)). The Office of Women’s Business Ownership shall be administered by an Assistant Ad- ministrator, who shall be appointed by the Administrator.
(2) ASSISTANT ADMINISTRATOR OF THE OFFICE OF WOMEN’S BUSINESS OWNERSHIP.—
(A) QUALIFICATION.—The position of Assistant Admin- istrator shall be a Senior Executive Service position under section 3132(a)(2) of title 5, United States Code. The As- sistant Administrator shall serve as a noncareer appointee (as defined in section 3132(a)(7) of that title).
(B) RESPONSIBILITIES AND DUTIES.— (i) RESPONSIBILITIES.—The responsibilities of the
Assistant Administrator shall be to administer the programs and services of the Office of Women’s Busi- ness Ownership established to assist women entre- preneurs in the areas of—
(I) starting and operating a small business; (II) development of management and tech-
nical skills; (III) seeking Federal procurement opportuni-
ties; and (IV) increasing the opportunity for access to
capital. (ii) DUTIES.—The Assistant Administrator shall—
(I) administer and manage the Women’s Busi- ness Center program;
(II) recommend the annual administrative and program budgets for the Office of Women’s Business Ownership (including the budget for the Women’s Business Center program);
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(III) establish appropriate funding levels therefore;
(IV) review the annual budgets submitted by each applicant for the Women’s Business Center program;
(V) select applicants to participate in the pro- gram under this section;
(VI) implement this section; (VII) maintain a clearinghouse to provide for
the dissemination and exchange of information be- tween women’s business centers;
(VIII) serve as the vice chairperson of the Interagency Committee on Women’s Business En- terprise;
(IX) serve as liaison for the National Women’s Business Council; and
(X) advise the Administrator on appointments to the Women’s Business Council.
(C) CONSULTATION REQUIREMENTS.—In carrying out the responsibilities and duties described in this paragraph, the Assistant Administrator shall confer with and seek the advice of the Administration officials in areas served by the women’s business centers.
(h) PROGRAM EXAMINATION.— (1) IN GENERAL.—The Administration shall—
(A) develop and implement an annual programmatic and financial examination of each women’s business center established pursuant to this section, pursuant to which each such center shall provide to the Administration—
(i) an itemized cost breakdown of actual expendi- tures for costs incurred during the preceding year; and
(ii) documentation regarding the amount of match- ing assistance from non-Federal sources obtained and expended by the center during the preceding year in order to meet the requirements of subsection (c) and, with respect to any in-kind contributions described in subsection (c)(2) that were used to satisfy the require- ments of subsection (c), verification of the existence and valuation of those contributions; and (B) analyze the results of each such examination and,
based on that analysis, make a determination regarding the programmatic and financial viability of each women’s business center. (2) CONDITIONS FOR CONTINUED FUNDING.—In determining
whether to award a contract (as a sustainability grant) under subsection (l) or to renew a contract (either as a grant or coop- erative agreement) under this section with a women’s business center, the Administration—
(A) shall consider the results of the most recent exam- ination of the center under paragraph (1); and
(B) may withhold such award or renewal, if the Ad- ministration determines that—
(i) the center has failed to provide any information required to be provided under clause (i) or (ii) of para-
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graph (1)(A), or the information provided by the center is inadequate; or
(ii) the center has failed to provide any informa- tion required to be provided by the center for purposes of the report of the Administration under subsection (j), or the information provided by the center is inad- equate.
(i) CONTRACT AUTHORITY.—The authority of the Administrator to enter into contracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in ap- propriations Acts. After the Administrator has entered into a con- tract, either as a grant or a cooperative agreement, with any appli- cant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administrator pro- vides the applicant with written notification setting forth the rea- sons therefore and affords the applicant an opportunity for a hear- ing, appeal, or other administrative proceeding under chapter 5 of title 5, United States Code.
(j) MANAGEMENT REPORT.— (1) IN GENERAL.—The Administration shall prepare and
submit to the Committees on Small Business of the House of Representatives and the Senate a report on the effectiveness of all projects conducted under this section.
(2) CONTENTS.—Each report submitted under paragraph (1) shall include information concerning, with respect to each women’s business center established pursuant to this section—
(A) the number of individuals receiving assistance; (B) the number of startup business concerns formed; (C) the gross receipts of assisted concerns; (D) the employment increases or decreases of assisted
concerns; (E) to the maximum extent practicable, increases or
decreases in profits of assisted concerns; and (F) the most recent analysis, as required under sub-
section (h)(1)(B), and the subsequent determination made by the Administration under that subsection.
(k) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—There is authorized to be appropriated,
to remain available until the expiration of the pilot program under subsection (l)—
(A) $12,000,000 for fiscal year 2000; (B) $12,800,000 for fiscal year 2001; (C) $13,700,000 for fiscal year 2002; and (D) $14,500,000 for fiscal year 2003.
(2) USE OF AMOUNTS.— (A) IN GENERAL.—Except as provided in subparagraph
(B), amounts made available under this subsection for fis- cal year 1999, and each fiscal year thereafter, may only be used for grant awards and may not be used for costs in- curred by the Administration in connection with the man- agement and administration of the program under this section.
(B) EXCEPTIONS.—Of the amount made available under this subsection for a fiscal year, the following
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amounts shall be available for selection panel costs, post- award conference costs, and costs related to monitoring and oversight:
(i) For fiscal year 2000, 2 percent. (ii) For fiscal year 2001, 1.9 percent. (iii) For fiscal year 2002, 1.9 percent. (iv) For fiscal year 2003, 1.6 percent.
(3) EXPEDITED ACQUISITION.—Notwithstanding any other provision of law, the Administrator, acting through the Assist- ant Administrator, may use such expedited acquisition meth- ods as the Administrator determines to be appropriate to carry out this section, except that the Administrator shall ensure that all small business sources are provided a reasonable op- portunity to submit proposals.
(4) RESERVATION OF FUNDS FOR SUSTAINABILITY PILOT PRO- GRAM.—
(A) IN GENERAL.—Subject to subparagraph (B), of the total amount made available under this subsection for a fiscal year, the following amounts shall be reserved for sustainability grants under subsection (n( �
(i) For fiscal year 2000, 17 percent. (ii) For fiscal year 2001, 18.8 percent. (iii) For fiscal year 2002, 30.2 percent. (iv) For fiscal year 2003, 30.2 percent.
(B) USE OF UNAWARDED FUNDS FOR SUSTAINABILITY PILOT PROGRAM GRANTS.—If the amount reserved under subparagraph (A) for any fiscal year is not fully awarded to private nonprofit organizations described in subsection (l)(1)(B), the Administration is authorized to use the unawarded amount to fund additional women’s business center sites or to increase funding of existing women’s business center sites under subsection (b).
ø(l) Repealed effective October 1, 2007 by 8305(b) of Public Law 110–28.¿
(m) CONTINUED FUNDING FOR CENTERS.— (1) IN GENERAL.—A nonprofit organization described in
paragraph (2) shall be eligible to receive, subject to paragraph (3), a 3-year grant under this subsection.
(2) APPLICABILITY.—A nonprofit organization described in this paragraph is a nonprofit organization that has received funding under subsection (b) or (l).
(3) APPLICATION AND APPROVAL CRITERIA.— (A) CRITERIA.—Subject to subparagraph (B), the Ad-
ministrator shall develop and publish criteria for the con- sideration and approval of applications by nonprofit orga- nizations under this subsection.
(B) CONTENTS.—Except as otherwise provided in this subsection, the conditions for participation in the grant program under this subsection shall be the same as the conditions for participation in the program under sub- section (l), as in effect on the date of enactment of this Act.
(C) NOTIFICATION.—Not later than 60 days after the date of the deadline to submit applications for each fiscal year, the Administrator shall approve or deny any applica-
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tion under this subsection and notify the applicant for each such application. (4) AWARD OF GRANTS.—
(A) IN GENERAL.—Subject to the availability of appro- priations, the Administrator shall make a grant for the Federal share of the cost of activities described in the ap- plication to each applicant approved under this subsection.
(B) AMOUNT.—A grant under this subsection shall be for not more than $150,000, for each year of that grant.
(C) FEDERAL SHARE.—The Federal share under this subsection shall be not more than 50 percent.
(D) PRIORITY.—In allocating funds made available for grants under this section, the Administrator shall give ap- plications under this subsection or subsection (l) priority over first-time applications under subsection (b). (5) RENEWAL.—
(A) IN GENERAL.—The Administrator may renew a grant under this subsection for additional 3-year periods, if the nonprofit organization submits an application for such renewal at such time, in such manner, and accom- panied by such information as the Administrator may es- tablish.
(B) UNLIMITED RENEWALS.—There shall be no limita- tion on the number of times a grant may be renewed under subparagraph (A).
(n) PRIVACY REQUIREMENTS.— (1) IN GENERAL.—A women’s business center may not dis-
close the name, address, or telephone number of any individual or small business concern receiving assistance under this sec- tion without the consent of such individual or small business concern, unless—
(A) the Administrator is ordered to make such a dis- closure by a court in any civil or criminal enforcement ac- tion initiated by a Federal or State agency; or
(B) the Administrator considers such a disclosure to be necessary for the purpose of conducting a financial audit of a women’s business center, but a disclosure under this subparagraph shall be limited to the information necessary for such audit. (2) ADMINISTRATION USE OF INFORMATION.—This sub-
section shall not— (A) restrict Administration access to program activity
data; or (B) prevent the Administration from using client infor-
mation (other than the information described in subpara- graph (A)) to conduct client surveys. (3) REGULATIONS.—The Administrator shall issue regula-
tions to establish standards for requiring disclosures during a financial audit under paragraph (1)(B). (o) STUDY AND REPORT ON REPRESENTATION OF WOMEN.—
(1) STUDY.—The Administrator shall periodically conduct a study to identify industries, as defined under the North Amer- ican Industry Classification System, underrepresented by small business concerns owned and controlled by women.
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(2) REPORT.—Not later than 5 years after the date of en- actment of this subsection, and every 5 years thereafter, the Administrator shall submit to the Committee on Small Busi- ness and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the results of each study under paragraph (1) conducted during the 5-year period ending on the date of the report.
SEC. 30. ø15 U.S.C. 657¿ OVERSIGHT OF REGULATORY ENFORCEMENT. (a) DEFINITIONS.—For purposes of this section, the term—
(1) ‘‘Board’’ means a Regional Small Business Regulatory Fairness Board established under subsection (c); and
(2) ‘‘Ombudsman’’ means the Small Business and Agri- culture Regulatory Enforcement Ombudsman designated under subsection (b). (b) SBA ENFORCEMENT OMBUDSMAN.—
(1) Not later than 180 days after the date of enactment of this section, the Administrator shall designate a Small Busi- ness and Agriculture Regulatory Enforcement Ombudsman, who shall report directly to the Administrator, utilizing per- sonnel of the Small Business Administration to the extent practicable. Other agencies shall assist the Ombudsman and take actions as necessary to ensure compliance with the re- quirements of this section. Nothing in this section is intended to replace or diminish the activities of any Ombudsman or similar office in any other agency.
(2) The Ombudsman shall— (A) work with each agency with regulatory authority
over small businesses to ensure that small business con- cerns that receive or are subject to an audit, on-site inspec- tion, compliance assistance effort, or other enforcement re- lated communication or contact by agency personnel are provided with a means to comment on the enforcement ac- tivity conducted by such personnel;
(B) establish means to receive comments from small business concerns regarding actions by agency employees conducting compliance or enforcement activities with re- spect to the small business concern, means to refer com- ments to the Inspector General of the affected agency in the appropriate circumstances, and otherwise seek to maintain the identity of the person and small business concern making such comments on a confidential basis to the same extent as employee identities are protected under section 7 of the Inspector General Act of 1978 (5 U.S.C. App.);
(C) based on substantiated comments received from small business concerns and the Boards, annually report to Congress and affected agencies evaluating the enforce- ment activities of agency personnel including a rating of the responsiveness to small business of the various re- gional and program offices of each agency;
(D) coordinate and report annually on the activities, findings and recommendations of the Boards to the Admin- istrator and to the heads of affected agencies; and
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(E) provide the affected agency with an opportunity to comment on draft reports prepared under subparagraph (C), and include a section of the final report in which the affected agency may make such comments as are not ad- dressed by the Ombudsman in revisions to the draft.
(c) REGIONAL SMALL BUSINESS REGULATORY FAIRNESS BOARDS.—
(1) Not later than 180 days after the date of enactment of this section, the Administrator shall establish a Small Busi- ness Regulatory Fairness Board in each regional office of the Small Business Administration.
(2) Each Board established under paragraph (1) shall— (A) meet at least annually to advise the Ombudsman
on matters of concern to small businesses relating to the enforcement activities of agencies;
(B) report to the Ombudsman on substantiated in- stances of excessive enforcement actions of agencies against small business concerns including any findings or recommendations of the Board as to agency enforcement policy or practice; and
(C) prior to publication, provide comment on the an- nual report of the Ombudsman prepared under subsection (b). (3) Each Board shall consist of five members, who are own-
ers, operators, or officers of small business concerns, appointed by the Administrator, after receiving the recommendations of the chair and ranking minority member of the Committees on Small Business of the House of Representatives and the Sen- ate. Not more than three of the Board members shall be of the same political party. No member shall be an officer or em- ployee of the Federal Government, in either the executive branch or the Congress.
(4) Members of the Board shall serve at the pleasure of the Administrator for terms of three years or less.
(5) The Administrator shall select a chair from among the members of the Board who shall serve at the pleasure of the Administrator for not more than 1 year as chair.
(6) A majority of the members of the Board shall constitute a quorum for the conduct of business, but a lesser number may hold hearings. (d) POWERS OF THE BOARDS.
(1) The Board may hold such hearings and collect such in- formation as appropriate for carrying out this section.
(2) The Board may use the United States mails in the same manner and under the same conditions as other depart- ments and agencies of the Federal Government.
(3) The Board may accept donations of services necessary to conduct its business, provided that the donations and their sources are disclosed by the Board.
(4) Members of the Board shall serve without compensa- tion, provided that, members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from
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82 Section 1347(b)(1) and (c)(3)(A) of Public Law 111–240 (124 Stat. 2547) provide for amend- ments to section 31(b)(2)(B) of the Small Business Act. The two amendments are in conflict with each other and as such there is uncertainty as to which amendment should be executed; how- ever, the version shown here reflects the execution of the amendment made by section 1347(c)(3)(A) of such Public Law.
their homes or regular places of business in the performance of services for the Board.
SEC. 31. ø15 U.S.C. 657a¿ HUBZONE PROGRAM. (a) IN GENERAL.—There is established within the Administra-
tion a program to be carried out by the Administrator to provide for Federal contracting assistance to qualified HUBZone small business concerns in accordance with this section.
(b) ELIGIBLE CONTRACTS.— (1) DEFINITIONS.—In this subsection—
(A) the term ‘‘contracting officer’’ has the meaning given that term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)); and
(B) the term ‘‘full and open competition’’ has the meaning given that term in section 4 of the Office of Fed- eral Procurement Policy Act (41 U.S.C. 403). (2) AUTHORITY OF CONTRACTING OFFICER.—
(A) SOLE SOURCE CONTRACTS.—A contracting officer may award sole source contracts under this section to any qualified HUBZone small business concern, if—
(i) the qualified HUBZone small business concern is determined to be a responsible contractor with re- spect to performance of such contract opportunity, and the contracting officer does not have a reasonable ex- pectation that 2 or more qualified HUBZone small business concerns will submit offers for the con- tracting opportunity;
(ii) the anticipated award price of the contract (in- cluding options) will not exceed—
(I) $5,000,000, in the case of a contract oppor- tunity assigned a standard industrial classifica- tion code for manufacturing; or
(II) $3,000,000, in the case of all other con- tract opportunities; and (iii) in the estimation of the contracting officer,
the contract award can be made at a fair and reason- able price. (B) RESTRICTED COMPETITION.—A contract opportunity
may 82 be awarded pursuant to this section on the basis of competition restricted to qualified HUBZone small busi- ness concerns if the contracting officer has a reasonable expectation that not less than 2 qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price.
(C) APPEALS.—Not later than 5 days from the date the Administration is notified of a procurement officer’s deci- sion not to award a contract opportunity under this section to a qualified HUBZone small business concern, the Ad- ministrator may notify the contracting officer of the intent to appeal the contracting officer’s decision, and within 15
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days of such date the Administrator may file a written re- quest for reconsideration of the contracting officer’s deci- sion with the Secretary of the department or agency head. (3) PRICE EVALUATION PREFERENCE IN FULL AND OPEN COM-
PETITIONS.— (A) IN GENERAL.—Subject to subparagraph (B), in any
case in which a contract is to be awarded on the basis of full and open competition, the price offered by a qualified HUBZone small business concern shall be deemed as being lower than the price offered by another offeror (other than another small business concern), if the price offered by the qualified HUBZone small business concern is not more than 10 percent higher than the price offered by the other- wise lowest, responsive, and responsible offeror.
(B) PROCUREMENT OF COMMODITIES.—For purchases by the Secretary of Agriculture of agricultural commod- ities, the price evaluation preference shall be—
(i) 10 percent, for the portion of a contract to be awarded that is not greater than 25 percent of the total volume being procured for each commodity in a single invitation;
(ii) 5 percent, for the portion of a contract to be awarded that is greater than 25 percent, but not greater than 40 percent, of the total volume being pro- cured for each commodity in a single invitation; and
(iii) zero, for the portion of a contract to be award- ed that is greater than 40 percent of the total volume being procured for each commodity in a single invita- tion. (C) PROCUREMENT OF COMMODITIES FOR INTER-
NATIONAL FOOD AID EXPORT OPERATIONS.—The price eval- uation preference for purchases of agricultural commod- ities by the Secretary of Agriculture for export operations through international food aid programs administered by the Farm Service Agency shall be 5 percent on the first portion of a contract to be awarded that is not greater than 20 percent of the total volume of each commodity being procured in a single invitation.
(D) TREATMENT OF PREFERENCE.—A contract awarded to a HUBZone small business concern under a preference described in subparagraph (B) shall not be counted toward the fulfillment of any requirement partially set aside for competition restricted to small business concerns. (4) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.—
A procurement may not be made from a source on the basis of a preference provided in paragraph (2) or (3), if the procure- ment would otherwise be made from a different source under section 4124 or 4125 of title 18, United States Code, or the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). (c) ENFORCEMENT; PENALTIES.—
(1) VERIFICATION OF ELIGIBILITY.—In carrying out this sec- tion, the Administrator shall establish procedures relating to—
(A) the filing, investigation, and disposition by the Ad- ministration of any challenge to the eligibility of a small
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business concern to receive assistance under this section (including a challenge, filed by an interested party, relat- ing to the veracity of a certification made or information provided to the Administration by a small business con- cern under section 3(p)(5)); and
(B) verification by the Administrator of the accuracy of any certification made or information provided to the Ad- ministration by a small business concern under section 3(p)(5). (2) EXAMINATIONS.—The procedures established under
paragraph (1) may provide for program examinations (includ- ing random program examinations) by the Administrator of any small business concern making a certification or providing information to the Administrator under section 3(p)(5).
(3) PROVISION OF DATA.—Upon the request of the Adminis- trator, the Secretary of Labor, the Secretary of Housing and Urban Development, and the Secretary of the Interior (or the Assistant Secretary for Indian Affairs), shall promptly provide to the Administrator such information as the Administrator de- termines to be necessary to carry out this subsection.
(4) PENALTIES.—In addition to the penalties described in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a ‘‘HUBZone small business concern’’ for purposes of this section, shall be subject to—
(A) section 1001 of title 18, United States Code; and (B) sections 3729 through 3733 of title 31, United
States Code. (d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated to carry out the program established by this sec- tion $10,000,000 for each of fiscal years 2004 through 2006. SEC. 32. ø15 U.S.C. 657b¿ VETERANS PROGRAMS.
(a) OFFICE OF VETERANS BUSINESS DEVELOPMENT.—There is established in the Administration an Office of Veterans Business Development, which shall be administered by the Associate Admin- istrator for Veterans Business Development (in this section re- ferred to as the ‘‘Associate Administrator’’) appointed under section 4(b)(1).
(b) ASSOCIATE ADMINISTRATOR FOR VETERANS BUSINESS DEVEL- OPMENT.—The Associate Administrator—
(1) shall be an appointee in the Senior Executive Service; (2) shall be responsible for the formulation, execution, and
promotion of policies and programs of the Administration that provide assistance to small business concerns owned and con- trolled by veterans and small business concerns owned and controlled by service-disabled veterans. The Associate Adminis- trator shall act as an ombudsman for full consideration of vet- erans in all programs of the Administration; and
(3) shall report to and be responsible directly to the Ad- ministrator. (c) INTERAGENCY TASK FORCE.—
(1) ESTABLISHMENT.—Not later than 90 days after the date of enactment of this subsection, the President shall establish
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an interagency task force to coordinate the efforts of Federal agencies necessary to improve capital and business develop- ment opportunities for, and ensure achievement of the pre-es- tablished Federal contracting goals for, small business con- cerns owned and controlled by service-disabled veterans and small business concerns owned and controlled by veterans (in this section referred to as the ‘‘task force’’).
(2) MEMBERSHIP.—The members of the task force shall in- clude—
(A) the Administrator, who shall serve as chairperson of the task force; and
(B) a senior level representative from— (i) the Department of Veterans Affairs; (ii) the Department of Defense; (iii) the Administration (in addition to the Admin-
istrator); (iv) the Department of Labor; (v) the Department of the Treasury; (vi) the General Services Administration; (vii) the Office of Management and Budget; and (viii) 4 representatives from a veterans service or-
ganization or military organization or association, se- lected by the President.
(3) DUTIES.—The task force shall— (A) consult regularly with veterans service organiza-
tions and military organizations in performing the duties of the task force; and
(B) coordinate administrative and regulatory activities and develop proposals relating to—
(i) improving capital access and capacity of small business concerns owned and controlled by service-dis- abled veterans and small business concerns owned and controlled by veterans through loans, surety bonding, and franchising;
(ii) ensuring achievement of the pre-established Federal contracting goals for small business concerns owned and controlled by service-disabled veterans and small business concerns owned and controlled by vet- erans through expanded mentor-protégé assistance and matching such small business concerns with con- tracting opportunities;
(iii) increasing the integrity of certifications of sta- tus as a small business concern owned and controlled by service-disabled veterans or a small business con- cern owned and controlled by veterans;
(iv) reducing paperwork and administrative bur- dens on veterans in accessing business development and entrepreneurship opportunities;
(v) increasing and improving training and coun- seling services provided to small business concerns owned and controlled by veterans; and
(vi) making other improvements relating to the support for veterans business development by the Fed- eral Government.
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(d) PARTICIPATION IN TAP WORKSHOPS.— (1) IN GENERAL.—The Associate Administrator shall in-
crease veteran outreach by ensuring that Veteran Business Outreach Centers regularly participate, on a nationwide basis, in the workshops of the Transition Assistance Program of the Department of Labor.
(2) PRESENTATIONS.—In carrying out paragraph (1), a Vet- eran Business Outreach Center may provide grants to entities located in Transition Assistance Program locations to make presentations on the opportunities available from the Adminis- tration for recently separating or separated veterans. Each presentation under this paragraph shall include, at a min- imum, a description of the entrepreneurial and business train- ing resources available from the Administration.
(3) WRITTEN MATERIALS.—The Associate Administrator shall—
(A) create written materials that provide comprehen- sive information on self-employment and veterans entre- preneurship, including information on resources available from the Administration on such topics; and
(B) make the materials created under subparagraph (A) available to the Secretary of Labor for inclusion in the Transition Assistance Program manual. (4) REPORTS.—The Associate Administrator shall submit to
Congress progress reports on the implementation of this sub- section. (e) WOMEN VETERANS BUSINESS TRAINING.—The Associate Ad-
ministrator shall— (1) compile information on existing resources available to
women veterans for business training, including resources for—
(A) vocational and technical education; (B) general business skills, such as marketing and ac-
counting; and (C) business assistance programs targeted to women
veterans; and (2) disseminate the information compiled under paragraph
(1) through Veteran Business Outreach Centers and women’s business centers. (f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section— (1) $1,500,000 for fiscal year 2005; and (2) $2,000,000 for fiscal year 2006.
øSection 33 repealed by section 1699(a) of division A of Public Law 112–239.¿ SEC. 34. ø15 U.S.C. 657d¿ FEDERAL AND STATE TECHNOLOGY PARTNER-
SHIP PROGRAM. (a) DEFINITIONS.—In this section and section 35, the following
definitions apply: (1) APPLICANT.—The term ‘‘applicant’’ means an entity, or-
ganization, or individual that submits a proposal for an award or a cooperative agreement under this section.
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(2) BUSINESS ADVICE AND COUNSELING.—The term ‘‘busi- ness advice and counseling’’ means providing advice and assist- ance on matters described in section 35(c)(2)(B) to small busi- ness concerns to guide them through the SBIR and STTR pro- gram process, from application to award and successful comple- tion of each phase of the program.
(3) FAST PROGRAM.—The term ‘‘FAST program’’ means the Federal and State Technology Partnership Program estab- lished under this section.
(4) MENTOR.—The term ‘‘mentor’’ means an individual de- scribed in section 35(c)(2).
(5) MENTORING NETWORK.—The term ‘‘Mentoring Network’’ means an association, organization, coalition, or other entity (including an individual) that meets the requirements of sec- tion 35(c).
(6) RECIPIENT.—The term ‘‘recipient’’ means a person that receives an award or becomes party to a cooperative agreement under this section.
(7) SBIR PROGRAM.—The term ‘‘SBIR program’’ has the same meaning as in section 9(e)(4).
(8) STATE.—The term ‘‘State’’ means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
(9) STTR PROGRAM.—The term ‘‘STTR program’’ has the same meaning as in section 9(e)(6). (b) ESTABLISHMENT OF PROGRAM.—The Administrator shall es-
tablish a program to be known as the Federal and State Tech- nology Partnership Program, the purpose of which shall be to strengthen the technological competitiveness of small business con- cerns in the States.
(c) GRANTS AND COOPERATIVE AGREEMENTS.— (1) JOINT REVIEW.—In carrying out the FAST program
under this section, the Administrator and the SBIR program managers at the National Science Foundation and the Depart- ment of Defense shall jointly review proposals submitted by ap- plicants and may make awards or enter into cooperative agree- ments under this section based on the factors for consideration set forth in paragraph (2), in order to enhance or develop in a State—
(A) technology research and development by small business concerns;
(B) technology transfer from university research to technology-based small business concerns;
(C) technology deployment and diffusion benefiting small business concerns;
(D) the technological capabilities of small business concerns through the establishment or operation of con- sortia comprised of entities, organizations, or individuals, including—
(i) State and local development agencies and enti- ties;
(ii) representatives of technology-based small busi- ness concerns;
(iii) industries and emerging companies;
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(iv) universities; and (v) small business development centers; and
(E) outreach, financial support, and technical assist- ance to technology-based small business concerns partici- pating in or interested in participating in an SBIR pro- gram, including initiatives—
(i) to make grants or loans to companies to pay a portion or all of the cost of developing SBIR proposals;
(ii) to establish or operate a Mentoring Network within the FAST program to provide business advice and counseling that will assist small business con- cerns that have been identified by FAST program par- ticipants, program managers of participating SBIR agencies, the Administration, or other entities that are knowledgeable about the SBIR and STTR programs as good candidates for the SBIR and STTR programs, and that would benefit from mentoring, in accordance with section 35;
(iii) to create or participate in a training program for individuals providing SBIR outreach and assist- ance at the State and local levels; and
(iv) to encourage the commercialization of tech- nology developed through SBIR program funding.
(2) SELECTION CONSIDERATIONS.—In making awards or en- tering into cooperative agreements under this section, the Ad- ministrator and the SBIR program managers referred to in paragraph (1)—
(A) may only consider proposals by applicants that in- tend to use a portion of the Federal assistance provided under this section to provide outreach, financial support, or technical assistance to technology-based small business concerns participating in or interested in participating in the SBIR program; and
(B) shall consider, at a minimum— (i) whether the applicant has demonstrated that
the assistance to be provided would address unmet needs of small business concerns in the community, and whether it is important to use Federal funding for the proposed activities;
(ii) whether the applicant has demonstrated that a need exists to increase the number or success of small high-technology businesses in the State, as measured by the number of first phase and second phase SBIR awards that have historically been re- ceived by small business concerns in the State;
(iii) whether the projected costs of the proposed activities are reasonable;
(iv) whether the proposal integrates and coordi- nates the proposed activities with other State and local programs assisting small high-technology firms in the State;
(v) the manner in which the applicant will meas- ure the results of the activities to be conducted; and
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(vi) whether the proposal addresses the needs of small business concerns—
(I) owned and controlled by women; (II) owned and controlled by minorities; and (III) located in areas that have historically not
participated in the SBIR and STTR programs. (3) PROPOSAL LIMIT.—Not more than one proposal may be
submitted for inclusion in the FAST program under this sec- tion to provide services in any one State in any 1 fiscal year.
(4) PROCESS.—Proposals and applications for assistance under this section shall be in such form and subject to such procedures as the Administrator shall establish. The Adminis- trator shall promulgate regulations establishing standards for the consideration of proposals under paragraph (2), including standards regarding each of the considerations identified in paragraph (2)(B). (d) COOPERATION AND COORDINATION.—In carrying out the
FAST program under this section, the Administrator shall cooper- ate and coordinate with—
(1) Federal agencies required by section 9 to have an SBIR program; and
(2) entities, organizations, and individuals actively en- gaged in enhancing or developing the technological capabilities of small business concerns, including—
(A) State and local development agencies and entities; (B) State committees established under the Experi-
mental Program to Stimulate Competitive Research of the National Science Foundation (as established under section 113 of the National Science Foundation Authorization Act of 1988 (42 U.S.C. 1862g));
(C) State science and technology councils; and (D) representatives of technology-based small business
concerns. (e) ADMINISTRATIVE REQUIREMENTS.—
(1) COMPETITIVE BASIS.—Awards and cooperative agree- ments under this section shall be made or entered into, as ap- plicable, on a competitive basis.
(2) MATCHING REQUIREMENTS.— (A) IN GENERAL.—The non-Federal share of the cost of
an activity (other than a planning activity) carried out using an award or under a cooperative agreement under this section shall be—
(i) 50 cents for each Federal dollar, in the case of a recipient that will serve small business concerns lo- cated in one of the 18 States receiving the fewest SBIR first phase awards (as described in section 9(e)(4)(A));
(ii) except as provided in subparagraph (B), 1 dol- lar for each Federal dollar, in the case of a recipient that will serve small business concerns located in one of the 16 States receiving the greatest number of such SBIR first phase awards; and
(iii) except as provided in subparagraph (B), 75 cents for each Federal dollar, in the case of a recipient
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that will serve small business concerns located in a State that is not described in clause (i) or (ii) that is receiving such SBIR first phase awards. (B) LOW-INCOME AREAS.—The non-Federal share of the
cost of the activity carried out using an award or under a cooperative agreement under this section shall be 50 cents for each Federal dollar that will be directly allocated by a recipient described in subparagraph (A) to serve small business concerns located in a qualified census tract, as that term is defined in section 42(d)(5)(C)(ii) of the Inter- nal Revenue Code of 1986. Federal dollars not so allocated by that recipient shall be subject to the matching require- ments of subparagraph (A).
(C) TYPES OF FUNDING.—The non-Federal share of the cost of an activity carried out by a recipient shall be com- prised of not less than 50 percent cash and not more than 50 percent of indirect costs and in-kind contributions, ex- cept that no such costs or contributions may be derived from funds from any other Federal program.
(D) RANKINGS.—For purposes of subparagraph (A), the Administrator shall reevaluate the ranking of a State once every 2 fiscal years, beginning with fiscal year 2001, based on the most recent statistics compiled by the Adminis- trator. (3) DURATION.—Awards may be made or cooperative agree-
ments entered into under this section for multiple years, not to exceed 5 years in total. (f) REPORTS.—
(1) INITIAL REPORT.—Not later than 120 days after the date of the enactment of the Small Business Innovation Re- search Program Reauthorization Act of 2000, the Adminis- trator shall prepare and submit to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives a report, which shall include, with respect to the FAST pro- gram, including Mentoring Networks—
(A) a description of the structure and procedures of the program;
(B) a management plan for the program; and (C) a description of the merit-based review process to
be used in the program. (2) ANNUAL REPORTS.—The Administrator shall submit an
annual report to the Committee on Small Business of the Sen- ate and the Committee on Science and the Committee on Small Business of the House of Representatives regarding—
(A) the number and amount of awards provided and cooperative agreements entered into under the FAST pro- gram during the preceding year;
(B) a list of recipients under this section, including their location and the activities being performed with the awards made or under the cooperative agreements entered into; and
(C) the Mentoring Networks and the mentoring data- base, as provided for under section 35, including—
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(i) the status of the inclusion of mentoring infor- mation in the database required by section 9(k); and
(ii) the status of the implementation and descrip- tion of the usage of the Mentoring Networks.
(g) REVIEWS BY INSPECTOR GENERAL.— (1) IN GENERAL.—The Inspector General of the Administra-
tion shall conduct a review of— (A) the extent to which recipients under the FAST pro-
gram are measuring the performance of the activities being conducted and the results of such measurements; and
(B) the overall management and effectiveness of the FAST program. (2) REPORT.—During the first quarter of fiscal year 2004,
the Inspector General of the Administration shall submit a re- port to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives on the review conducted under paragraph (1). (h) PROGRAM LEVELS.—
(1) IN GENERAL.—There is authorized to be appropriated to carry out the FAST program, including Mentoring Networks, under this section and section 35, $10,000,000 for each of fiscal years 2001 through 2005.
(2) MENTORING DATABASE.—Of the total amount made available under paragraph (1) for fiscal years 2001 through 2005, a reasonable amount, not to exceed a total of $500,000, may be used by the Administration to carry out section 35(d). (i) TERMINATION.—The authority to carry out the FAST pro-
gram under this section shall terminate on September 30, 2005. SEC. 35. ø15 U.S.C. 657e¿ MENTORING NETWORKS.
(a) FINDINGS.—Congress finds that— (1) the SBIR and STTR programs create jobs, increase ca-
pacity for technological innovation, and boost international competitiveness;
(2) increasing the quantity of applications from all States to the SBIR and STTR programs would enhance competition for such awards and the quality of the completed projects; and
(3) mentoring is a natural complement to the FAST pro- gram of reaching out to new companies regarding the SBIR and STTR programs as an effective and low-cost way to im- prove the likelihood that such companies will succeed in such programs in developing and commercializing their research. (b) AUTHORIZATION FOR MENTORING NETWORKS.—The recipient
of an award or participant in a cooperative agreement under sec- tion 34 may use a reasonable amount of such assistance for the es- tablishment of a Mentoring Network under this section.
(c) CRITERIA FOR MENTORING NETWORKS.—A Mentoring Net- work established using assistance under section 34 shall—
(1) provide business advice and counseling to high tech- nology small business concerns located in the State or region served by the Mentoring Network and identified under section
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34(c)(1)(E)(ii) as potential candidates for the SBIR or STTR programs;
(2) identify volunteer mentors who— (A) are persons associated with a small business con-
cern that has successfully completed one or more SBIR or STTR funding agreements; and
(B) have agreed to guide small business concerns through all stages of the SBIR or STTR program process, including providing assistance relating to—
(i) proposal writing; (ii) marketing; (iii) Government accounting; (iv) Government audits; (v) project facilities and equipment; (vi) human resources; (vii) third phase partners; (viii) commercialization; (ix) venture capital networking; and (x) other matters relevant to the SBIR and STTR
programs; (3) have experience working with small business concerns
participating in the SBIR and STTR programs; (4) contribute information to the national database re-
ferred to in subsection (d); and (5) agree to reimburse volunteer mentors for out-of-pocket
expenses related to service as a mentor under this section. (d) MENTORING DATABASE.—The Administrator shall—
(1) include in the database required by section 9(k)(1), in cooperation with the SBIR, STTR, and FAST programs, infor- mation on Mentoring Networks and mentors participating under this section, including a description of their areas of ex- pertise;
(2) work cooperatively with Mentoring Networks to main- tain and update the database;
(3) take such action as may be necessary to aggressively promote Mentoring Networks under this section; and
(4) fulfill the requirements of this subsection either di- rectly or by contract.
SEC. 36. ø15 U.S.C. 657f¿ PROCUREMENT PROGRAM FOR SMALL BUSI- NESS CONCERNS OWNED AND CONTROLLED BY SERVICE- DISABLED VETERANS.
(a) SOLE SOURCE CONTRACTS.—In accordance with this section, a contracting officer may award a sole source contract to any small business concern owned and controlled by service-disabled veterans if—
(1) such concern is determined to be a responsible con- tractor with respect to performance of such contract oppor- tunity and the contracting officer does not have a reasonable expectation that 2 or more small business concerns owned and controlled by service-disabled veterans will submit offers for the contracting opportunity;
(2) the anticipated award price of the contract (including options) will not exceed—
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(A) $5,000,000, in the case of a contract opportunity assigned a standard industrial classification code for man- ufacturing; or
(B) $3,000,000, in the case of any other contract oppor- tunity; and (3) in the estimation of the contracting officer, the contract
award can be made at a fair and reasonable price. (b) RESTRICTED COMPETITION.—In accordance with this section,
a contracting officer may award contracts on the basis of competi- tion restricted to small business concerns owned and controlled by service-disabled veterans if the contracting officer has a reasonable expectation that not less than 2 small business concerns owned and controlled by service-disabled veterans will submit offers and that the award can be made at a fair market price.
(c) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.—A procurement may not be made from a source on the basis of a pref- erence provided under subsection (a) or (b) if the procurement would otherwise be made from a different source under section 4124 or 4125 of title 18, United States Code, or the Javits-Wagner- O’Day Act (41 U.S.C. 46 et seq.).
(d) ENFORCEMENT; PENALTIES.—Rules similar to the rules of paragraphs (5) and (6) of section 8(m) shall apply for purposes of this section.
(e) CONTRACTING OFFICER.—For purposes of this section, the term ‘‘contracting officer’’ has the meaning given such term in sec- tion 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)). SEC. 37. ø15 U.S.C. 657i¿ COORDINATION OF DISASTER ASSISTANCE
PROGRAMS WITH FEMA. (a) COORDINATION REQUIRED.—The Administrator shall ensure
that the disaster assistance programs of the Administration are co- ordinated, to the maximum extent practicable, with the disaster as- sistance programs of the Federal Emergency Management Agency.
(b) REGULATIONS REQUIRED.—The Administrator, in consulta- tion with the Administrator of the Federal Emergency Manage- ment Agency, shall establish regulations to ensure that each appli- cation for disaster assistance is submitted as quickly as practicable to the Administration or directed to the appropriate agency under the circumstances.
(c) COMPLETION; REVISION.—The initial regulations shall be completed not later than 270 days after the date of the enactment of the Small Business Disaster Response and Loan Improvements Act of 2008. Thereafter, the regulations shall be revised on an an- nual basis.
(d) REPORT.—The Administrator shall include a report on the regulations whenever the Administration submits the report re- quired by section 43. SEC. 38. ø15 U.S.C. 657j¿ INFORMATION TRACKING AND FOLLOW-UP
SYSTEM FOR DISASTER ASSISTANCE. (a) SYSTEM REQUIRED.—The Administrator shall develop, im-
plement, or maintain a centralized information system to track communications between personnel of the Administration and ap- plicants for disaster assistance. The system shall ensure that
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whenever an applicant for disaster assistance communicates with such personnel on a matter relating to the application, the fol- lowing information is recorded:
(1) The method of communication. (2) The date of communication. (3) The identity of the personnel. (4) A summary of the subject matter of the communication.
(b) FOLLOW-UP REQUIRED.—The Administrator shall ensure that an applicant for disaster assistance receives, by telephone, mail, or electronic mail, follow-up communications from the Admin- istration at all critical stages of the application process, including the following:
(1) When the Administration determines that additional information or documentation is required to process the appli- cation.
(2) When the Administration determines whether to ap- prove or deny the loan.
(3) When the primary contact person managing the loan application has changed.
SEC. 39. ø15 U.S.C. 657k¿ DISASTER PROCESSING REDUNDANCY. (a) IN GENERAL.—The Administrator shall ensure that the Ad-
ministration has in place a facility for disaster loan processing that, whenever the Administration’s primary facility for disaster loan processing becomes unavailable, is able to take over all dis- aster loan processing from that primary facility within 2 days.
(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as may be necessary to carry out this section. SEC. 40. ø15 U.S.C. 657l¿ COMPREHENSIVE DISASTER RESPONSE PLAN.
(a) PLAN REQUIRED.—The Administrator shall develop, imple- ment, or maintain a comprehensive written disaster response plan. The plan shall include the following:
(1) For each region of the Administration, a description of the disasters most likely to occur in that region.
(2) For each disaster described under paragraph (1)— (A) an assessment of the disaster; (B) an assessment of the demand for Administration
assistance most likely to occur in response to the disaster; (C) an assessment of the needs of the Administration,
with respect to such resources as information technology, telecommunications, human resources, and office space, to meet the demand referred to in subparagraph (B); and
(D) guidelines pursuant to which the Administration will coordinate with other Federal agencies and with State and local authorities to best respond to the demand re- ferred to in subparagraph (B) and to best use the resources referred to in that subparagraph.
(b) COMPLETION; REVISION.—The first plan required by sub- section (a) shall be completed not later than 180 days after the date of the enactment of this section. Thereafter, the Administrator shall update the plan on an annual basis and following any major disaster relating to which the Administrator declares eligibility for additional disaster assistance under section 7(b)(9).
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83 The word ‘‘subsection’’ probably should be ‘‘subsection (a)’’.
(c) KNOWLEDGE REQUIRED.—The Administrator shall carry out subsections (a) and (b) through an individual with substantial knowledge in the field of disaster readiness and emergency re- sponse.
(d) REPORT.—The Administrator shall include a report on the plan whenever the Administration submits the report required by section 43. SEC. 41. ø15 U.S.C. 657m¿ PLANS TO SECURE SUFFICIENT OFFICE
SPACE. (a) PLANS REQUIRED.—The Administrator shall develop long-
term plans to secure sufficient office space to accommodate an ex- panded workforce in times of disaster.
(b) REPORT.—The Administrator shall include a report on the plans developed under subsection (a) each time the Administration submits a report required under section 43. SEC. 42. ø15 U.S.C. 657n¿ IMMEDIATE DISASTER ASSISTANCE PRO-
GRAM. (a) PROGRAM REQUIRED.—The Administrator shall carry out a
program, to be known as the Immediate Disaster Assistance pro- gram, under which the Administration participates on a deferred (guaranteed) basis in 85 percent of the balance of the financing out- standing at the time of disbursement of the loan if such balance is less than or equal to $25,000 for businesses affected by a dis- aster.
(b) ELIGIBILITY REQUIREMENT.—To receive a loan guaranteed under subsection (a), the applicant shall also apply for, and meet basic eligibility standards for, a loan under subsection (b) or (c) of section 7.
(c) USE OF PROCEEDS.—A person who receives a loan under subsection (b) or (c) of section 7 shall use the proceeds of that loan to repay all loans guaranteed under subsection (a), if any, before using the proceeds for any other purpose.
(d) LOAN TERMS.— (1) NO PREPAYMENT PENALTY.—There shall be no prepay-
ment penalty on a loan guaranteed under subsection (a). (2) REPAYMENT.—A person who receives a loan guaranteed
under subsection (a) and who is disapproved for a loan under subsection (b) or (c) of section 7, as the case may be, shall repay the loan guaranteed under subsection (a) not later than the date established by the Administrator, which may not be earlier than 10 years after the date on which the loan guaran- teed under subsection 83 is disbursed. (e) APPROVAL OR DISAPPROVAL.—The Administrator shall en-
sure that each applicant for a loan under the program receives a decision approving or disapproving of the application within 36 hours after the Administration receives the application. SEC. 43. ø15 U.S.C. 657o¿ ANNUAL REPORTS ON DISASTER ASSISTANCE.
Not later than 45 days after the end of a fiscal year, the Ad- ministrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Busi- ness of the House of Representatives a report on the disaster as-
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sistance operations of the Administration for that fiscal year. The report shall—
(1) specify the number of Administration personnel in- volved in such operations;
(2) describe any material changes to those operations, such as changes to technologies used or to personnel responsibilities;
(3) describe and assess the effectiveness of the Administra- tion in responding to disasters during that fiscal year, includ- ing a description of the number and amounts of loans made for damage and for economic injury; and
(4) describe the plans of the Administration for preparing to respond to disasters during the next fiscal year.
SEC. 44. ø15 U.S.C. 657q¿ CONSOLIDATION OF CONTRACT REQUIRE- MENTS.
(a) DEFINITIONS.—In this section— (1) the term ‘‘Chief Acquisition Officer’’ means the em-
ployee of a Federal agency designated as the Chief Acquisition Officer for the Federal agency under section 16(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(a));
(2) the term ‘‘consolidation of contract requirements’’, with respect to contract requirements of a Federal agency, means a use of a solicitation to obtain offers for a single contract or a multiple award contract—
(A) to satisfy 2 or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under 2 or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited; or
(B) to satisfy requirements of the Federal agency for construction projects to be performed at 2 or more discrete sites; and (3) the term ‘‘senior procurement executive’’ means an offi-
cial designated under section 16(c) of the Office of Federal Pro- curement Policy Act (41 U.S.C. 414(c)) as the senior procure- ment executive for a Federal agency. (b) POLICY.—The head of each Federal agency shall ensure that
the decisions made by the Federal agency regarding consolidation of contract requirements of the Federal agency are made with a view to providing small business concerns with appropriate oppor- tunities to participate as prime contractors and subcontractors in the procurements of the Federal agency.
(c) LIMITATION ON USE OF ACQUISITION STRATEGIES INVOLVING CONSOLIDATION.—
(1) IN GENERAL.—Subject to paragraph (4), the head of a Federal agency may not carry out an acquisition strategy that includes a consolidation of contract requirements of the Fed- eral agency with a total value of more than $2,000,000, unless the senior procurement executive or Chief Acquisition Officer for the Federal agency, before carrying out the acquisition strategy—
(A) conducts market research; (B) identifies any alternative contracting approaches
that would involve a lesser degree of consolidation of con- tract requirements;
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(C) makes a written determination that the consolida- tion of contract requirements is necessary and justified;
(D) identifies any negative impact by the acquisition strategy on contracting with small business concerns; and
(E) ensures that steps will be taken to include small business concerns in the acquisition strategy. (2) DETERMINATION THAT CONSOLIDATION IS NECESSARY
AND JUSTIFIED.— (A) IN GENERAL.—A senior procurement executive or
Chief Acquisition Officer may determine that an acquisi- tion strategy involving a consolidation of contract require- ments is necessary and justified for the purposes of para- graph (1)(C) if the benefits of the acquisition strategy sub- stantially exceed the benefits of each of the possible alter- native contracting approaches identified under paragraph (1)(B).
(B) SAVINGS IN ADMINISTRATIVE OR PERSONNEL COSTS.—For purposes of subparagraph (A), savings in ad- ministrative or personnel costs alone do not constitute a sufficient justification for a consolidation of contract re- quirements in a procurement unless the expected total amount of the cost savings, as determined by the senior procurement executive or Chief Acquisition Officer, is ex- pected to be substantial in relation to the total cost of the procurement. (3) BENEFITS TO BE CONSIDERED.—The benefits considered
for the purposes of paragraphs (1) and (2) may include cost and, regardless of whether quantifiable in dollar amounts—
(A) quality; (B) acquisition cycle; (C) terms and conditions; and (D) any other benefit.
SEC. 45. ø15 U.S.C. 657r¿ MENTOR-PROTEGE PROGRAMS. (a) ADMINISTRATION PROGRAM.—
(1) AUTHORITY.—The Administrator is authorized to estab- lish a mentor-protege program for all small business concerns.
(2) MODEL FOR PROGRAM.—The mentor-protege program established under paragraph (1) shall be identical to the men- tor-protege program of the Administration for small business concerns that participate in the program under section 8(a) (as in effect on the date of enactment of this section), except that the Administrator may modify the program to the extent nec- essary given the types of small business concerns included as proteges. (b) PROGRAMS OF OTHER AGENCIES.—
(1) APPROVAL REQUIRED.—Except as provided in paragraph (4), a Federal department or agency may not carry out a men- tor-protege program for small business concerns unless—
(A) the head of the department or agency submits a plan to the Administrator for the program; and
(B) the Administrator approves such plan.
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(2) BASIS FOR APPROVAL.—The Administrator shall approve or disapprove a plan submitted under paragraph (1) based on whether the program proposed—
(A) will assist proteges to compete for Federal prime contracts and subcontracts; and
(B) complies with the regulations issued under para- graph (3). (3) REGULATIONS.—Not later than 270 days after the date
of enactment of this section, the Administrator shall issue, sub- ject to notice and comment, regulations with respect to mentor- protege programs, which shall ensure that such programs im- prove the ability of proteges to compete for Federal prime con- tracts and subcontracts and which shall address, at a min- imum, the following:
(A) Eligibility criteria for program participants, includ- ing any restrictions on the number of mentor-protege rela- tionships permitted for each participant.
(B) The types of developmental assistance to be pro- vided by mentors, including how the assistance provided shall improve the competitive viability of the proteges.
(C) Whether any developmental assistance provided by a mentor may affect the status of a program participant as a small business concern due to affiliation.
(D) The length of mentor-protege relationships. (E) The effect of mentor-protege relationships on con-
tracting. (F) Benefits that may accrue to a mentor as a result
of program participation. (G) Reporting requirements during program participa-
tion. (H) Postparticipation reporting requirements. (I) The need for a mentor-protege pair, if accepted to
participate as a pair in a mentor-protege program of any Federal department or agency, to be accepted to partici- pate as a pair in all Federal mentor-protege programs.
(J) Actions to be taken to ensure benefits for proteges and to protect a protege against actions by a mentor that—
(i) may adversely affect the protege’s status as a small business concern; or
(ii) provide disproportionate economic benefits to the mentor relative to those provided the protege.
(4) LIMITATION ON APPLICABILITY.—Paragraph (1) does not apply to the following:
(A) Any mentor-protege program of the Department of Defense.
(B) Any mentoring assistance provided under a Small Business Innovation Research Program or a Small Busi- ness Technology Transfer Program.
(C) Until the date that is 1 year after the date on which the Administrator issues regulations under para- graph (3), any Federal department or agency operating a mentor-protege program in effect on the date of enactment of this section.
(c) REPORTING.—
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258Sec. 45 SMALL BUSINESS ACT
(1) IN GENERAL.—Not later than 2 years after the date of enactment of this section, and annually thereafter, the Admin- istrator 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 that—
(A) identifies each Federal mentor-protege program; (B) specifies the number of participants in each such
program, including the number of participants that are— (i) small business concerns; (ii) small business concerns owned and controlled
by service-disabled veterans; (iii) qualified HUBZone small business concerns; (iv) small business concerns owned and controlled
by socially and economically disadvantaged individ- uals; or
(v) small business concerns owned and controlled by women; (C) describes the type of assistance provided to pro-
teges under each such program; (D) describes the benefits provided to mentors under
each such program; and (E) describes the progress of proteges under each such
program with respect to competing for Federal prime con- tracts and subcontracts. (2) PROVISION OF INFORMATION.—The head of each Federal
department or agency carrying out a mentor-protege program shall provide to the Administrator, on an annual basis, the in- formation necessary for the Administrator to submit a report required under paragraph (1). (d) DEFINITIONS.—In this section, the following definitions
apply: (1) MENTOR.—The term ‘‘mentor’’ means a for-profit busi-
ness concern, of any size, that— (A) has the ability to assist and commits to assisting
a protege to compete for Federal prime contracts and sub- contracts; and
(B) satisfies any other requirements imposed by the Administrator. (2) MENTOR-PROTEGE PROGRAM.—The term ‘‘mentor-pro-
tege program’’ means a program that pairs a mentor with a protege for the purpose of assisting the protege to compete for Federal prime contracts and subcontracts.
(3) PROTEGE.—The term ‘‘protege’’ means a small business concern that—
(A) is eligible to enter into Federal prime contracts and subcontracts; and
(B) satisfies any other requirements imposed by the Administrator.
(e) CURRENT MENTOR PROTEGE AGREEMENTS.—Mentors and proteges with approved agreement in a program operating pursu- ant to subsection (b)(4)(C) shall be permitted to continue their rela- tionship according to the terms specified in their agreement until the expiration date specified in the agreement.
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259 Sec. 46SMALL BUSINESS ACT
(f) SUBMISSION OF AGENCY PLANS.—Agencies operating mentor protege programs pursuant to subsection (b)(4)(C) shall submit the plans specified in subsection (b)(1)(A) to the Administrator within 6 months of the promulgation of rules required by subsection (b)(3). The Administrator shall provide initial comments on each plan within 60 days of receipt, and final approval or denial of each plan within 180 days after receipt. SEC. 46. ø15 U.S.C. 657s¿ LIMITATIONS ON SUBCONTRACTING.
(a) IN GENERAL.—If awarded a contract under section 8(a), 8(m), 15(a), 31, or 36, a covered small business concern—
(1) in the case of a contract for services, may not expend on subcontractors more than 50 percent of the amount paid to the concern under the contract;
(2) in the case of a contract for supplies (other than from a regular dealer in such supplies), may not expend on sub- contractors more than 50 percent of the amount, less the cost of materials, paid to the concern under the contract;
(3) in the case of a contract described in paragraphs (1) and (2)—
(A) shall determine for which category, services (as de- scribed in paragraph (1)) or supplies (as described in para- graph (2)), the greatest percentage of the contract is awarded;
(B) shall determine the amount awarded under the contract for that category of services or supplies; and
(C) may not expend on subcontractors, with respect to the amount determined under subparagraph (B), more than 50 percent of that amount; and (4) in the case of a contract for supplies from a regular
dealer in such supplies, shall supply the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted—
(A) by the Administrator, after reviewing a determina- tion by the applicable contracting officer that no small business manufacturer or processor can reasonably be ex- pected to offer a product meeting the specifications (includ- ing period for performance) required by the contract; or
(B) by the Administrator for a product (or class of products), after determining that no small business manu- facturer or processor is available to participate in the Fed- eral procurement market.
(b) SIMILARLY SITUATED ENTITIES.—Contract amounts ex- pended by a covered small business concern on a subcontractor that is a similarly situated entity shall not be considered subcon- tracted for purposes of determining whether the covered small business concern has violated a requirement established under sub- section (a) or (d).
(c) MODIFICATIONS OF PERCENTAGES.—The Administrator may change, by rule (after providing notice and an opportunity for pub- lic comment), a percentage specified in paragraphs (1) through (4) of subsection (a) if the Administrator determines that such change is necessary to reflect conventional industry practices among busi-
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260Sec. 46 SMALL BUSINESS ACT
ness concerns that are below the numerical size standard for busi- nesses in that industry category.
(d) OTHER CONTRACTS.— (1) IN GENERAL.—With respect to a category of contracts to
which a requirement under subsection (a) does not apply, the Administrator is authorized to establish, by rule (after pro- viding notice and an opportunity for public comment), a re- quirement that a covered small business concern may not ex- pend on subcontractors more than a specified percentage of the amount paid to the concern under a contract in that category.
(2) UNIFORMITY.—A requirement established under para- graph (1) shall apply to all covered small business concerns.
(3) CONSTRUCTION PROJECTS.—The Administrator shall es- tablish, through public rulemaking, requirements similar to those specified in paragraph (1) to be applicable to contracts for general and specialty construction and to contracts for any other industry category not otherwise subject to the require- ments of such paragraph. The percentage applicable to any such requirement shall be determined in accordance with para- graph (1). (e) DEFINITIONS.—In this section, the following definitions
apply: (1) COVERED SMALL BUSINESS CONCERN.—The term ‘‘cov-
ered small business concern’’ means a business concern that— (A) with respect to a contract awarded under section
8(a), is a small business concern eligible to receive con- tracts under that section;
(B) with respect to a contract awarded under section 8(m)—
(i) is a small business concern owned and con- trolled by women (as defined in that section); or
(ii) is a small business concern owned and con- trolled by women (as defined in that section) that is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such owner- ship is determined without regard to any community property law); (C) with respect to a contract awarded under section
15(a), is a small business concern; (D) with respect to a contract awarded under section
31, is a qualified HUBZone small business concern; or (E) with respect to a contract awarded under section
36, is a small business concern owned and controlled by service-disabled veterans. (2) SIMILARLY SITUATED ENTITY.—The term ‘‘similarly situ-
ated entity’’ means a subcontractor that— (A) if a subcontractor for a small business concern, is
a small business concern; (B) if a subcontractor for a small business concern eli-
gible to receive contracts under section 8(a), is such a con- cern;
(C) if a subcontractor for a small business concern owned and controlled by women (as defined in section 8(m)), is such a concern;
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261 Sec. 47SMALL BUSINESS ACT
(D) if a subcontractor for a small business concern owned and controlled by women (as defined in section 8(m)) that is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law), is such a concern;
(E) if a subcontractor for a qualified HUBZone small business concern, is such a concern; or
(F) if a subcontractor for a small business concern owned and controlled by service-disabled veterans, is such a concern.
SEC. 47. ø15 U.S. C. 631 note¿ All laws and parts of laws in- consistent with this Act are hereby repealed to the extent of such inconsistency.
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