H.R. 2802House108th Congress (2003-2005)In Committee
Small Business Reauthorization and Manufacturing Revitalization Act of 2003

Legislative Activity

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12 earlier actions
HouseCalendars Latest Action
Placed on the Union Calendar, Calendar No. 249.
March 8, 2004
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HouseIntro Referral
Introduced in House
July 21, 2003
HouseIntro Referral
Referred to the House Committee on Small Business.
Small Business Committee
July 21, 2003
HouseCommittee
Committee Consideration and Mark-up Session Held.
Small Business Committee
July 24, 2003
HouseCommittee
Ordered to be Reported by Voice Vote.
Small Business Committee
July 24, 2003
HouseCommittee
Reported (Amended) by the Committee on Small Business. H. Rept. 108-325, Part I.
Small Business Committee
October 21, 2003
HouseIntro Referral
Referred sequentially to the House Committee on Government Reform for a period ending not later than Oct. 31, 2003 for consideration of such provisions of the bill and amendment as fall within the jurisdiction of that committee pursuant to clause 1(h), rule X.
Oversight and Government Reform Committee
October 21, 2003
HouseIntro Referral
House Committee on Government Reform Granted an extension for further consideration ending not later than Nov. 7, 2003.
Oversight and Government Reform Committee
October 31, 2003
HouseIntro Referral
House Committee on Government Reform Granted an extension for further consideration ending not later than Nov. 21, 2003.
Oversight and Government Reform Committee
November 7, 2003
HouseIntro Referral
House Committee on Government Reform Granted an extension for further consideration ending not later than Jan. 31, 2004.
Oversight and Government Reform Committee
November 21, 2003
HouseIntro Referral
House Committee on Government Reform Granted an extension for further consideration ending not later than March 2, 2004.
Oversight and Government Reform Committee
January 31, 2004
HouseIntro Referral
House Committee on Government Reform Granted an extension for further consideration ending not later than March 8, 2004.
Oversight and Government Reform Committee
March 2, 2004
HouseCommittee
Committee on Government Reform discharged.
Oversight and Government Reform Committee
March 8, 2004
HouseCalendars
Placed on the Union Calendar, Calendar No. 249.
March 8, 2004
Floor Debate

6 members
What members said about H.R. 2802 on the floor
2 Republicans4 Democrats
Rep. Nydia M. VelázquezD-NY-12 · Sep 13, 2004
Mr. Speaker, I yield myself such time as I may consume. (Ms. VELAZQUEZ asked and was given permission to revise and extend her remarks.) Mr. Speaker, we are here today because Congress has failed to…
Mr. Speaker, I yield myself such time as I may consume.
(Ms. VELAZQUEZ asked and was given permission to revise and extend her remarks.)
Mr. Speaker, we are here today because Congress has failed to complete its work. Over 1 year ago, the Committee on Small Business unanimously reported out a bipartisan reauthorization bill. As a result of the failure to move this legislation, the authorization for the SBA expired last year and we are now forced to pass our fourth extension. Shamefully, the agency has been operating for 3 months without any authorization.
It is clear that the Nation's job creators, small businesses, are struggling. The United States has lost 1.7 million jobs since 2001, and we are continuing to see growth rates that only keep up with inflation. American manufacturers are being hit hardest, with 2.7 million jobs lost during that period and 11,000 lost in June alone. This is clearly not the picture of an economy that is getting back on its feet.
Last week, the House Committee on Small Business Democrats released a quarterly small business index showing that business conditions are at 7-year lows. Skyrocketing health care and energy costs and exploding Federal budget deficits are but a few of the barriers small firms face in achieving the growth our economy needs so badly.
At a time when we should be providing our Nation's entrepreneurs a leg up, this administration and the Republican Congress has continuously failed to provide the assistance they need by blocking passage of the SBA reauthorization.
The bipartisan reauthorization bill will provide the most comprehensive overhaul of the SBA in over a decade. It will broaden or modernize the SBA loan programs so firms can access the capital they need. At a time when the Federal Government failed to meet the small business contracting goals for the fourth consecutive year, the Republican leadership is blocking this bill that will expand procurement opportunities for small companies.
The legislation ensures small firms are given a fair chance to break into the Federal marketplace. By doing so, we provide the Federal Government a quality service at a good price. This is not just good for small businesses, it is good for the American taxpayer. Additionally, the likelihood of success for small business is nearly doubled when they have access to technical assistance.
Passage of the reauthorization bill will offer the greatest expansion of entrepreneurial assistance programs in decades.
Even more concerning is the possibility that our failure to act will actually worsen the business environment for small businesses. Small businesses are faced with a possible doubling of fees on SBA loans at the end of this month. Without immediate action, the current structure will lapse, leaving banks and entrepreneurs in a worse situation than when the program was shut down last year.
Although the gentleman from Illinois (Chairman Manzullo), who cannot be here today, has tried repeatedly to bring this bill up for consideration, the Republican House leadership and the administration have blocked it.
In today's economic climate, small businesses are more important than ever. We need to ensure that they have all the tools for success, as they are facing numerous obstacles. It is unfortunate that we are here today passing an extension, rather than celebrating the passage of an SBA reauthorization.
These issues should not be subject to partisan politics. When our small businesses need us the most, our committee was able to work in a bipartisan manner to produce this legislation. We now ask the Republican leadership to recognize these efforts and pass the reauthorization bill that will get small businesses back creating jobs.
Mr. Speaker, I yield 2 minutes to the gentlewoman from Guam (Ms. Bordallo).
Mr. Speaker, I yield myself such time as I may consume.
I would like to set the record straight regarding the tax cut that the President submitted to Congress and that Congress passed.
The tax cuts are not helping small businesses. The President's tax cuts have provided little relief for small businesses. In fact, under the latest tax cut, over half of small businesses receive less than $500, despite a cost of $350 billion. And, while the President talks about how the top tax rate cut helps small businesses, only 1 percent of small business owners benefit from the reduction in the top tax rate. In fact, out of the 28 million small businesses, only 180,000 benefited from the top tax rate, according to the figures presented to us by the Department of the Treasury. Those are your own numbers. Less than 5 percent of the latest 2003 Jobs and Growth package was in the form of targeted tax relief for small businesses.
Mr. Speaker, I yield 3 minutes to the gentlewoman from the Virgin Islands (Mrs. Christensen).
Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Tierney).
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, there is no disagreement that we should pass this extension. It is, though, embarrassing that it has come to this. We expect small businesses to meet their taxes, comply with Federal regulations and pay their employees on time. But when it comes to Congress, we are not held accountable for our failure to meet their needs.
At a time when our economy is struggling, at a time when small businesses are struggling, Congress should be holding up its end of the deal. Passing the Small Business Administration Reauthorization Act must be a priority.
Mr. Speaker, I yield back the balance of my time.
Rep. Shelley Moore CapitoR-WV-2 · Sep 13, 2004
Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5008) to provide an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of…
Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 5008.
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this bill extends until September 30 the programs of the Small Business Administration not covered by an appropriation, including the Preferred Surety Bond Program, SBA's Private Sector Cosponsorship Authority, the Small Disadvantaged Business Procurement Assistance Program, the Small Business Development Center Drug-Free Workplace Assistance Grants Program and the Very Small Business Concerns Program.
Last June, the House acted responsibly by passing H.R. 4478 to extend the programs of the SBA, but the other body failed to act. These programs have been in limbo since June 4, and it is important that they are extended while we continue to work on an SBA reauthorization bill.
In addition, H.R. 5008 would help many existing Women's Business Centers keep their doors open. Passage of H.R. 5008 would free up the remaining $4 million already appropriated for the program this year to provide at a minimum approximately $70,000 to each Women's Business Center and sustainability status.
Finally, H.R. 5008 corrects a legal problem regarding how the SBA pays fiscal transfer agents, who provide a vital role in the secondary market. For nearly 10 years, the SBA's fiscal transfer agent has been paid by a float on interest on the pools of securitized 7(a) guaranteed loans. Recently there has been some confusion as to whether or not this practice violates the Anti-Deficiency Act. The SBA has proposed a fix to this problem, and that solution is incorporated in section 3 of H.R. 5008, which essentially codifies the existing practice.
Passage of this legislation is needed in order to prevent the crippling of the SBA's 7(a) loan program, because without the liquidity of a secondary market banks will not make as many 7(a) loans as in the past.
This bipartisan bill has the support of the ranking minority member, the gentlewoman from New York (Ms. Velazquez), and it has the support of the Bush administration. I urge my colleagues to support H.R. 5008.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield myself such time as I may consume.
While reauthorization is extremely important, I think it would behoove us at this time to really think about all of the things that have been done and are in the process of being done for small businesses here and across America.
Twenty-five million small business owners will receive tax relief, totaling $75 billion. That is real savings. The rate reductions in the tax benefit plan is more than 90 percent small business. We also have raised the small business expensing limit from $25,000 to $100,000, and I can tell my colleagues in my home State of West Virginia, small businesses are beginning to do and beginning to feel the growth effects of being able to hire another person, being able to buy that extra piece of equipment as a result of the tax incentives.
Regulation, which is another burdensome thing on small business, this administration has slowed the growth of burdensome new rules by 75 percent. Also, small businesses saved $7 billion last year in regulatory costs, and that is significant.
We have worked a lot to try to incent and grow our small businesses, and there is always more, much more, that can be done. But in terms of government procurement, for the first time in many years, the Federal Government exceeded its small business goal by providing a record $65.5 billion in prime contracts to small businesses. That is a significant increase over past years.
So, in conclusion, I would like to say that reauthorization of SBA is exceedingly important to small business, and what we are doing here today in extending the authorization is extremely important. But much has been done and much needs to still continue to be done to help small business, which is the backbone of our American economy.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I continue to reserve the balance of my time.
Mr. Speaker, I yield myself such time as I may consume.
I would like to thank the gentlewoman from New York (Ms. Velazquez) for not only her advocacy for this bill before us today, but for her advocacy for small business. She is one of the staunchest cheerleaders for small businesses across this Nation, and I appreciate her service and her ability to get things done.
I thank our chairman, the gentleman from Illinois (Chairman Manzullo), who is not with us today, to thank him also for his small business advocacy. It is good to know that we have a bipartisan opinion on this bill. I look forward to its passage, and I look forward to all of us working together to see that small business not only grows but thrives under this bill and also under further legislation.
Mr. Speaker, I yield back the balance of my time.
Rep. Donna M. ChristensenD-VI · Sep 13, 2004
Mr. Speaker, I thank the gentlewoman for yielding me this time. Although I would rather be here to support the SBA reauthorization, I rise today in support of H.R. 5008, which would simply, once…
Mr. Speaker, I thank the gentlewoman for yielding me this time.
Although I would rather be here to support the SBA reauthorization, I rise today in support of H.R. 5008, which would simply, once again, extend the important programs under the Small Business Act and the Small Business Investment Act.
Mr. Speaker, H.R. 5008 marks the fourth extension of the SBA programs. The House Committee on Small Business passed the extension on the SBA programs with bipartisan support a year ago. I want to take this opportunity to commend the leadership of our ranking member, the gentlewoman from New York (Ms. Velazquez), and our chairman for their strong leadership and their bipartisanship in working on that reauthorization.
Yet, the House leadership has failed to bring this bill to the floor for a vote. Why?
The leadership in this and the other body give a lot of lip service to small business. We constantly tout them as the backbone and the engines of our economy. Yet, on legislation as critical to their and, thus, our Nation's well-being as the reauthorization of programs on which they depend, this Congress has, once again, failed to act.
It is getting late in the year. Our small businesses cannot wait. They need security now. They need the assurance that the programs they will need to continue will be there now. They need to know what to expect, and we need to stop these stop-gap measures and give them that security and that assurance.
I am particularly concerned because I have heard Members ask, Why should we continue to fund agencies and programs that have not been reauthorized?
Mr. Speaker, actions speak louder than words. Failure to act on this legislation is sending the message that our Nation's small businesses are not a priority for this administration. But they are very important to both the Democrats and the Republicans on the committee.
It is also of great concern that this bill fails to address the current problem of high fees associated with the 7(a) program, the flagship lending program for the Small Business Administration. If the leadership fails to bring the reauthorization to a vote by the end of this month, the 7(a) lending program will once again be in jeopardy.
It is a good thing that, in our districts, the agencies charged with supporting small businesses are doing what they need to do. On that positive note, I would like to take this opportunity to recognize and congratulate the University of the Virgin Islands Small Business Development Center, the university president, Dr. Laverne Ragster, and the SBDC director, Mr. Warren Bush, for successfully hosting its Small Business Innovation Research Program and Small Business Technology Transfer Program Orientation Conference last week.
Finally, on a bill previously before this body today, I want to take this opportunity to also join my colleagues in supporting House Resolution 717 and belatedly extend, on behalf of all of my constituents in the U.S. Virgin Islands, our best wishes to President Bill Clinton on his 58th birthday, as well as to wish him a continued speedy recovery, many, many more birthdays and good health and happiness, and God's richest blessings on him and his family.
Rep. John F. TierneyD-MA-6 · Sep 13, 2004
Mr. Speaker, I thank the gentlewoman from New York, both for yielding me this time and for bringing this matter to the floor today. It is obviously essential that we finally take some action on this…
Mr. Speaker, I thank the gentlewoman from New York, both for yielding me this time and for bringing this matter to the floor today.
It is obviously essential that we finally take some action on this legislation. We need to extend critical funding to women's business centers across the United States. In particular, the Center for Women and Enterprise in Boston serves many of the constituents in my district and throughout the State of Massachusetts. It has been long overdue, and many of these centers have already suffered because of Congress's inaction.
It is a bit disturbing to know that it has been 10 months since the Small Business Administration authorization bill has expired. And it continues to linger, and we need the majority to come forward and the White House to come forward at this point in time and bring it and put it on the agenda. Everybody has great rhetoric about how important small businesses are to our country, to our districts and to the economy. But now it is time to put that rhetoric into action and make sure we move on this bill.
We do not have to tell people or remind them about how this economy is suffering: almost 2 million jobs lost in the last several years and still not anywhere near back to where we were in January of 2001.
We know what a generator of jobs, what a booster of the economy small businesses can be, and we also know how important the Small Business Administration is in providing capital for these businesses. So if we could do the bill that is before us today but also bring forward the Small Business Administration reauthorization, we could deal with that issue of capital.
At a time when the economy is suffering as much as it is, many businesses are starting to fail. They need that capital so that they can retool. Some need it to grow. And we need some new businesses to fill in where others have left. That cannot happen without this bill coming forward.
The so-called 7(a) loans are by far the most critical capital vehicles that we have for small businesses: $11 billion in loans to small businesses every year. That aspect has to be assured to businesses. If we do nothing by the end of this month, fees for that will double, freezing out many businesses from the opportunity to get access to this money so that they can expand or they can start up.
Time after time, we hear on the floor and we hear in people's individual districts how much they feel for small business and how certain they are that small businesses add to the benefit of our country.
Mr. Speaker, we need to put our money where our mouth is. We need this measure to be brought forward. I support today's bill because it does a good thing, particularly with respect to the women's business centers across the country, but realize that we have to do more and move the Small Business Administration reauthorization forward.
Rep. Madeleine Z. BordalloD-GU · Sep 13, 2004
Mr. Speaker, I rise today in support of H.R. 5008, and I would like to take this time to thank the chairman of the Committee on Small Business, the gentleman from Illinois (Chairman Manzullo), and…
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Rep. Nydia M. VelázquezD-NY-12 · Jun 3, 2004
Mr. Speaker, reserving the right to object, and I do not intend to object, the legislation we are about to pass is necessary because the House still has not gotten its work done on the…
Rep. Donald A. ManzulloR-IL-16 · Oct 24, 2003
Under clause 2 of rule XII, bills and reports were delivered to the Clerk for printing, and bills referred as follows: [Omitted from the Record of Oct. 21, 2003] Mr. MANZULLO: Committee on Small…
Rep. Donald A. ManzulloR-IL-16 · Jun 3, 2004
Mr. Speaker, I ask unanimous consent that the Committee on Small Business be discharged from further consideration of the bill (H.R. 4478), to provide for an additional temporary extension of…
Bill Text

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Reported in HouseIssued March 8, 2004
        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2802 Reported in House (RH)]

Union Calendar No. 249
108th CONGRESS
2d Session
H.R. 2802

[Report No. 108-325, Part I]

To reauthorize the Small Business Act and the Small Business Investment
Act of 1958, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

July 21, 2003

Mr. Manzullo (for himself and Ms. Velazquez) introduced the following
bill; which was referred to the Committee on Small Business

October 21, 2003

Reported with an amendment and referred to the Committee on Government
Reform for a period ending not later than October 31, 2003, for
consideration of such provisions of the bill and amendment as fall
within the jurisdiction of that committee pursuant to clause 1(h), rule
X
[Strike out all after the enacting clause and insert the part printed
in italic]

October 31, 2003

Referral to the Committee on Government Reform extended for a period
ending not later than November 7, 2003

November 7, 2003

Referral to the Committee on Government Reform extended for a period
ending not later than November 21, 2003

November 21, 2003

Referral to the Committee on Government Reform extended for a period
ending not later than January 31, 2004

January 31, 2004

Referral to the Committee on Government Reform extended for a period
ending not later than March 2, 2004

March 2, 2004

Referral to the Committee on Government Reform extended for a period
ending not later than March 8, 2004

March 8, 2004

Additional sponsor: Mr. Bereuter

March 8, 2004

Committee on Government Reform discharged; committed to the Committee
of the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on July
21, 2003]

_______________________________________________________________________

A BILL

To reauthorize the Small Business Act and the Small Business Investment
Act of 1958, and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Small Business
Reauthorization and Manufacturing Revitalization Act of 2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title; table of contents.

TITLE I--SMALL BUSINESS INVESTMENT ACT OF 1958 AMENDMENTS AND RELATED
PROVISIONS

Sec. 101. State defined.
Sec. 102. Small manufacturer defined.
Sec. 103. Maximum participating securities rate.
Sec. 104. Maximum leverage for buying operations.
Sec. 105. Maximum aggregate amount of leverage.
Sec. 106. Investments in smaller enterprises.
Sec. 107. Actions of Administrator with respect to capital impairment.
Sec. 108. Conditions for distribution.
Sec. 109. Modification of aggregate limitation.
Sec. 110. Notice and comment rulemaking.
Sec. 111. Low-income geographic area definition.
Sec. 112. Unmet equity investment needs of certain small manufacturers.
Sec. 113. Participation agreement requirement.
Sec. 114. Final approval requirement.
Sec. 115. Conditionally approved companies.
Sec. 116. Applications for new markets venture capital companies.
Sec. 117. Authorization of appropriations.
Sec. 118. Repeal of lease guarantee authority.
Sec. 119. Amendment of congressional findings relating to State
development companies.
Sec. 120. Qualification of State development companies.
Sec. 121. Job requirements; definition.
Sec. 122. Small business concern loan limitations.
Sec. 123. Approval requirement.
Sec. 124. Effective date for termination of certain fees.
Sec. 125. Accredited lenders program.
Sec. 126. Premier certified lenders program.
Sec. 127. Foreclosure and liquidation of loans.
Sec. 128. Additions to title V.
Sec. 129. Regulations to carry out amendments to loan program.
Sec. 130. Conforming amendments.
Sec. 131. Development company affiliates.

TITLE II--SMALL BUSINESS ACT AMENDMENTS AND RELATED PROVISIONS.

Sec. 201. Short title.
Sec. 202. Findings; statements of policy.
Sec. 203. Definitions.
Sec. 204. Small Business Administration.
Sec. 205. Financial management.
Sec. 206. Organization and staff.
Sec. 207. Loan programs.
Sec. 208. Government contract and business development assistance for
small business concerns, etc.
Sec. 209. Training and assistance.
Sec. 210. Contracting assistance; etc.
Sec. 211. Authorization of appropriations; etc.
Sec. 212. Small business development centers.
Sec. 213. Assignment of employees of the Office of International Trade.
Sec. 214. Supervisory and enforcement authority for small business
lending companies.
Sec. 215. Reauthorization of Paul D. Coverdell drug-free workplace
program.
Sec. 216. Women's business center program.
Sec. 217. HUBZone program.
Sec. 218. Other repeals and reorganizations.
Sec. 219. Rules of construction.

TITLE III--OTHER PROVISIONS

Sec. 301. Report regarding national database of small manufacturers.
Sec. 302. Workforce transformation plan.
Sec. 303. Repeal of certain provisions of the Disaster Relief Act of
1970.
Sec. 304. Regulations on size standards of franchisees.
Sec. 305. Temporary small business development center assistance to
Indian tribe members, Native Alaskans, and
Native Hawaiians.
Sec. 306. Temporary small business development center assistance for
vocational and technical entrepreneurship
development.
Sec. 307. Very small business concern contract data collection.
Sec. 308. Very small business concern pilot program for competition
award to home-based business.
Sec. 309. Socially and economically disadvantaged business.
Sec. 310. Study and report on effectiveness of aggregate limitations on
amount of assistance to any single
enterprise.
Sec. 311. Study and report on coordination of new markets venture
capital program with new markets tax credit
program.
Sec. 312. Study and report on premier certified lenders program.
Sec. 313. Data collection capabilities.
Sec. 314. Resubmission of disaster loan applications for businesses
affected by September 11, 2001, terrorist
attacks.
Sec. 315. National small business incubator program.
Sec. 316. Report regarding effects of sale of disaster loans on
borrowers.
Sec. 317. Suspension and extension of certain disaster loans related to
the terrorist attacks of September 11,
2001.
Sec. 318. Definitions.

TITLE I--SMALL BUSINESS INVESTMENT ACT OF 1958 AMENDMENTS AND RELATED
PROVISIONS

SEC. 101. STATE DEFINED.

Paragraph (4) of section 103 of the Small Business Investment Act
of 1958 (15 U.S.C. 662) is amended to read as follows:
``(4) the term `State' has the meaning given such term in
section 3 of the Small Business Act;''.

SEC. 102. SMALL MANUFACTURER DEFINED.

Section 103 of the Small Business Investment Act of 1958 (15 U.S.C.
662) is amended--
(1) in paragraph (16), by striking ``and'' after the
semicolon at the end;
(2) in paragraph (17), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(18) the term ``small manufacturer'' has the meaning
given that term in section 3 of the Small Business Act (15
U.S.C. 632).''.

SEC. 103. MAXIMUM PARTICIPATING SECURITIES RATE.

Section 303(g)(2) of the Small Business Investment Act of 1958 (15
U.S.C. 683(g)(2)) is amended by striking ``1.38 percent'' and inserting
``1.7 percent''.

SEC. 104. MAXIMUM LEVERAGE FOR BUYING OPERATIONS.

Section 303(b)(2) of the Small Business Investment Act of 1958 (15
U.S.C. 683(b)(2)) is amended by striking subparagraphs (A) and (B) and
inserting the following new subparagraphs:
``(A) In general.--The outstanding leverage made
available to a licensee under section 301(c) shall not
exceed 300 percent of private capital, up to a maximum
of $115,000,000, except that the maximum shall be
$150,000,000 if the licensee certifies in writing that
more than 50 percent of its aggregate dollar amount of
financings are in small manufacturers.
``(B) Commonly controlled licensees.--
``(i) In the case of 2 or more licensees
that are commonly controlled (as determined by
the Administrator), upon application to the
Administrator, the outstanding leverage made
available shall not exceed $150,000,000, except
that the maximum shall be $185,000,000 if the
licensees certify in writing that more than 50
percent of their aggregate dollar amount of
financings are in small manufacturers. The
Administrator shall have 10 business days to
approve or disapprove an application under the
preceding sentence. Approval or disapproval is
final agency action for purposes of chapter 7
of title 5, United States Code.
``(ii) Not later than 120 days after the
enactment of this subparagraph, the
Administrator shall prescribe regulations
providing standards and conditions for
increases in leverage, including the standards
for determining common control of licensees.
``(iii) Until regulations are prescribed
under clause (ii), the Administrator shall
approve the application of each commonly
controlled licensee under the definition of
common control in section 107.50 of title 13,
Code of Federal Regulations, as in effect on
January 1, 2003.''.

SEC. 105. MAXIMUM AGGREGATE AMOUNT OF LEVERAGE.

Section 303(b) of the Small Business Investment Act of 1958 (15
U.S.C. 683(b)) is amended by striking paragraph (4).

SEC. 106. INVESTMENTS IN SMALLER ENTERPRISES.

Sections 303(d) of the Small Business Investment Act of 1958 (15
U.S.C. 683(d)) is amended to read as follows:
``(d) Investments in Smaller Enterprises.--As a condition of
approval of an application for leverage, the Administrator shall
require a licensee to certify in writing that not less than 25 percent
of the licensee's aggregate dollar amount of financings will be
provided to smaller enterprises.''.

SEC. 107. ACTIONS OF ADMINISTRATOR WITH RESPECT TO CAPITAL IMPAIRMENT.

Section 303(e) of the Small Business Investment Act of 1958 (15
U.S.C. 683(e)) is amended--
(1) by striking ``and'' at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
(3) by adding at the end the following new paragraphs:
``(3) shall not, for reasons of capital impairment,
restrict the operations of the licensee or direct the use of
the licensee's capital to any purpose other than the purposes
for which the license was granted; and
``(4) notwithstanding paragraph (3), may take action to
restrict the operations of, or liquidate a licensee for failure
to comply with any other provision of the law or regulation
promulgated pursuant to this Act.''.

SEC. 108. CONDITIONS FOR DISTRIBUTION.

Sections 303(g)(9) of the Small Business Investment Act of 1958 (15
U.S.C. 683(g)(9)) is amended to read as follows:
``(9)(A) Subject to subparagraphs (B), (C), and (D), after
making distributions under paragraph (8), a company with
outstanding participating securities may distribute the balance
of income to its investors, if there are no accumulated and
unpaid prioritized payments.
``(B) Amounts received by the Administration under this
paragraph and paragraph 8 shall be applied first as prepayment
of the principal amount of the outstanding participating
securities or debentures of the company at the time of such
distribution and then to the allocation under paragraph (11).
``(C) Distributions under this paragraph shall be made to
private investors and to the Administration in the ratio of
private capital to leverage as of the day before the
distribution until the outstanding participating securities or
debentures of the company are paid in full, after which any
remaining distributions under this paragraph shall be made to
private investors and to the Administration in the ratio that
is provided for the allocation of profits in paragraph (11).
``(D) The Administrator shall prescribe such regulations as
are required to assure that management fees for the company are
not unreasonably reduced due to a reduction in combined capital
as a result of distributions made under this paragraph.''.

SEC. 109. MODIFICATION OF AGGREGATE LIMITATION.

Section 306(a) of the Small Business Investment Act of 1958 (15
U.S.C. 686(a)) is amended by inserting ``(and not including any
obligations or securities issued under section 7(a) of the Small
Business Act or title V of this Act)'' after ``under the provisions of
this title''.

SEC. 110. NOTICE AND COMMENT RULEMAKING.

Section 308(c) of the Small Business Investment Act of 1958 (15
U.S.C. 687) is amended by adding at the end the following: ``Any rules
or regulations issued under this Act, other than those relating to
agency management or personnel, shall be issued pursuant to section
553(b) of title 5, United States Code.''.

SEC. 111. LOW-INCOME GEOGRAPHIC AREA DEFINITION.

(a) In General.--Section 351(3)(A)(ii)(I) of the Small Business
Investment Act of 1958 (15 U.S.C. 689(3)(A)(ii)(I)) is amended by
striking ``50 percent'' and all that follows through the end and
inserting ``the median family income in that tract does not exceed 80
percent of the greater of statewide median family income or the
metropolitan area median family income; or''.
(b) Application of Amended Definition.--The definition of low-
income geographic area in section 351(3) of the Small Business
Investment Act of 1958 (15 U.S.C. 689(3)), as amended by subsection
(a), shall apply to private capital raised under section 354(d)(1) of
the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)(1))
before, on, or after the effective date of the amendment made by
subsection (a).

SEC. 112. UNMET EQUITY INVESTMENT NEEDS OF CERTAIN SMALL MANUFACTURERS.

Section 352(2) of the Small Business Investment Act of 1958 (15
U.S.C. 689a(2)) is amended by inserting after ``small enterprises'' the
following: ``and small manufacturers''.

SEC. 113. PARTICIPATION AGREEMENT REQUIREMENT.

Section 353(1) of the Small Business Investment Act of 1958 (15
U.S.C. 689b(1)) is amended by inserting after ``section 352'' the
following: ``(with at least one such agreement to be with a company
engaged primarily in development of and investment in small
manufacturers)''.

SEC. 114. FINAL APPROVAL REQUIREMENT.

Section 354(d) of the Small Business Investment Act of 1958 (15
U.S.C. 689c(d)) is amended, in the matter before paragraph (1), by
striking ``a period of time, not to exceed 2 years,'' and inserting ``2
years''.

SEC. 115. CONDITIONALLY APPROVED COMPANIES.

Section 358(a) of the Small Business Investment Act of 1958 (15
U.S.C. 689(a)) is amended by adding at the end the following new
paragraphs:
``(6) Grants to conditionally approved companies.--Upon the
request of a company conditionally-approved under section
354(c), the Administrator shall provide up to $50,000 in grant
assistance for establishment of an operational assistance
program under this title.
``(7) Repayment.--If a company receives a grant under
paragraph (6) and does not enter into a participation agreement
for final approval, the company shall repay the amount of the
grant to the Administrator.
``(8) Deduction.--If a company receives a grant under
paragraph (6) and receives final approval under section 354(e),
the Administrator shall deduct the amount of the grant under
that paragraph from the total grant amount that the company
receives for operational assistance.''.

SEC. 116. APPLICATIONS FOR NEW MARKETS VENTURE CAPITAL COMPANIES.

Not later than 60 days after the date of the enactment of this
section, the Administrator shall prescribe standard documents for final
New Markets Venture Capital Company approval application under section
354(e) of the Small Business Investment Act of 1958 (15 U.S.C.
689c(e)). The Administrator shall assure that the standard documents
shall be designed to substantially reduce the cost burden of the
application process on the companies involved.

SEC. 117. AUTHORIZATION OF APPROPRIATIONS.

Section 368(a) of the Small Business Investment Act of 1958 (15
U.S.C. 689q(a)) is amended--
(1) in the matter before paragraph (1) by striking ``fiscal
years 2001 through 2006'' and inserting ``fiscal years 2004 and
2005'';
(2) in paragraph (1), by striking ``$150,000,000'' and
inserting ``$75,000,000''; and
(3) in paragraph (2), by striking ``$30,000,000'' and
inserting ``$15,000,000''.

SEC. 118. REPEAL OF LEASE GUARANTEE AUTHORITY.

(a) Repeal.--Sections 401, 402, and 404 of the Small Business
Investment Act of 1958 (15 U.S.C. 692, 693, and 694-1) are hereby
repealed.
(b) Application to Outstanding Guarantees.--The repeals made by
subsection (a) shall not affect the rights, powers, duties, or
obligations of the Administrator or any other person with respect to
any guarantee made under section 401 or 404 of the Small Business
Investment Act of 1958 on or before the date of the enactment of this
Act.

SEC. 119. AMENDMENT OF CONGRESSIONAL FINDINGS RELATING TO STATE
DEVELOPMENT COMPANIES.

Section 501(a) of the Small Business Investment Act of 1958 (15
U.S.C. 695(a)) is amended by striking ``purpose'' and all that follows
through ``areas'' and inserting the following: ``purposes of this title
are to foster economic development and create or preserve job
opportunities in both urban and rural areas, and to enhance the ability
of America's small manufacturers to expand''.

SEC. 120. QUALIFICATION OF STATE DEVELOPMENT COMPANIES.

Section 501(d) of the Small Business Investment Act of 1958 (15
U.S.C. 695(d)) is amended--
(1) in paragraph (2), by inserting after ``area,'' the
following: ``increasing the productive capacity of small
manufacturers,'';
(2) in paragraph (3) by striking subparagraph (D) and
inserting the following:
``(D) development in a community with a population
of less than 50,000 that is not located within a
standard metropolitan statistical area,''; and
(3) by striking the sentence beginning ``If eligibility''
after subparagraph (H) of paragraph (3).

SEC. 121. JOB REQUIREMENTS; DEFINITION.

Section 501 of the Small Business Investment Act of 1958 (15 U.S.C.
695) is amended by adding at the end the following new subsection:
``(e)(1) A project meets the objective set forth in subsection
(d)(1) if the project creates or retains one job for every $50,000
guaranteed by the Administration, except that the amount is $100,000 in
the case of a project of a small manufacturer.
``(2) Paragraph (1) does not apply to a project for which
eligibility is based on the objectives set forth in paragraph (2) or
(3) of subsection (d), if the development company's portfolio of
outstanding debentures creates or retains one job for every $50,000
guaranteed by the Administration.
``(3) For projects in Alaska, Hawaii, State-designated enterprise
zones, empowerment zones and enterprise communities, labor surplus
areas, as determined by the Secretary of Labor, and for other areas
designated by the Administrator, the development company's portfolio
may average not more than $75,000 per job created or retained.
``(4) Loans for projects of small manufacturers shall be excluded
from calculations under paragraph (2) or (3).
``(5) Under regulations prescribed by the Administrator, the
Administrator may waive any requirement of this subsection (other than
paragraph (4)).''.

SEC. 122. SMALL BUSINESS CONCERN LOAN LIMITATIONS.

Section 502(2) of the Small Business Investment Act of 1958 (15
U.S.C. 696(2)) is amended--
(1) by striking ``$1,000,000'' and inserting
``$2,000,000'';
(2) by striking ``$1,300,000'' and inserting
``$2,500,000''; and
(3) by inserting after ``small business concern'' the last
place it appears the following: ``and loans to small
manufacturers shall be limited to $4,000,000 and loans under
this section shall not be limited by reason of any loan
guaranteed by the Administration under section 7(a) of the
Small Business Act (15 U.S.C. 636(a))''.

SEC. 123. APPROVAL REQUIREMENT.

Section 503(b) of the Small Business Investment Act of 1958 (15
U.S.C. 697(b)) is amended by striking paragraph (6) and inserting the
following:
``(6) except as provided in section 508, the Administration
approves each loan to be made from such proceeds in accordance
with section 512, (but such approval shall not require a small
business investment company licensed under title III of this
Act to guarantee a loan without regard to its ownership
percentage of the borrower); and''.

SEC. 124. EFFECTIVE DATE FOR TERMINATION OF CERTAIN FEES.

Section 503(f) of the Small Business Investment Act of 1958 (15
U.S.C. 697(f)) is amended by striking ``2003'' and inserting ``2005''.

SEC. 125. ACCREDITED LENDERS PROGRAM.

Section 507 of the Small Business Investment Act of 1958 (15 U.S.C.
697d) is amended--
(1) in subsection (b)(1), by inserting ``and'' after the
semicolon at the end;
(2) in subsection (b), by striking paragraphs (2) through
(6) and inserting the following:
``(2) has a loan default rate, as determined by the Bureau
of Premier Certified Lenders Program Oversight, that is--
``(A) less than the national average;
``(B) one percent higher than the national average,
if at least 20 percent of the development company's
portfolio is for projects in areas referred to in
section 501(e)(3); or
``(C) two percent higher than the national average,
if at least 30 percent of the development company's
portfolio is for projects of small manufacturers.'';
(3) by striking subsection (c); and
(4) in subsection (d)(1), by striking ``that--'' and all
that follows through the end and inserting: ``that the
development company has not continued to meet the requirements
of subsection (b).''.

SEC. 126. PREMIER CERTIFIED LENDERS PROGRAM.

Section 508 of the Small Business Investment Act of 1958 (15 U.S.C.
697e) is amended to read as follows:

``SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM.

``(a) Establishment.--The Administrator may establish a Premier
Certified Lenders Program for qualified State and local development
companies that meet the requirements of subsection (b).
``(b) Requirements.--
``(1) Application.--To be eligible to participate in the
Premier Certified Lenders Program established under subsection
(a), a qualified State and local development company shall
prepare and submit to the Administrator an application at such
time, in such manner, and containing such information as the
Administrator may require.
``(2) Designation.--The Administrator may designate a
qualified State and local development company as a premier
certified lender--
``(A) if the company is an active qualified State
and local development company in good standing and has
been an active participant in the accredited lenders
program during the entire 12-month period preceding the
date on which the company submits an application under
paragraph (1), except that the Administrator may waive
this requirement if the company is qualified to
participate in the accredited lenders program;
``(B) if the company has a history of--
``(i) submitting to the Administrator
adequately analyzed debenture guarantee
application packages; and
``(ii) of properly closing section 504
loans and servicing its loan portfolio;
``(C) if the company agrees to assume and to
reimburse the Administration for 10 percent of any loss
sustained by the Administration as a result of default
by the company in the payment of principal or interest
on a debenture issued by such company and guaranteed by
the Administrator under this section (15 percent in the
case of any such loss attributable to a debenture
issued by the company during any period for which an
election is in effect under subsection (c)(7) for such
company); and
``(D) the Administrator determines, with respect to
the company, that the loss reserve established in
accordance with subsection (c) is sufficient for the
company to meet its obligations to protect the Federal
Government from risk of loss.
``(3) Applicability of criteria after designation.--The
Administrator may revoke the designation of a qualified State
and local development company as a premier certified lender
under this section at any time, if the Administrator determines
that the qualified State and local development company does not
meet any requirement described in subparagraphs (A) through (D)
of paragraph (2).
``(c) Loss Reserve.--
``(1) Establishment.--A company designated as a premier
certified lender shall establish a loss reserve for financing
approved pursuant to this section.
``(2) Amount.--The amount of each loss reserve established
under paragraph (1) shall be 10 percent of the amount of the
company's exposure, as determined under subsection (b)(2)(C).
``(3) Assets.--Each loss reserve established under
paragraph (1) shall be comprised of--
``(A) segregated funds on deposit in an account or
accounts with a federally insured depository
institution or institutions selected by the company,
subject to a collateral assignment in favor of, and in
a format acceptable to, the Administrator;
``(B) irrevocable letter or letters of credit, with
a collateral assignment in favor of, and a commercially
reasonable format acceptable to, the Administrator; or
``(C) any combination of the assets described in
subparagraphs (A) and (B).
``(4) Contributions.--The company shall make contributions
to the loss reserve, either cash or letters of credit as
provided above, in the following amounts and at the following
intervals:
``(A) 50 percent when a debenture is closed.
``(B) 25 percent additional not later than 1 year
after a debenture is closed.
``(C) 25 percent additional not later than 2 years
after a debenture is closed.
``(5) Replenishment.--If a loss has been sustained by the
Administration, any portion of the loss reserve, and other
funds provided by the premier company as necessary, may be used
to reimburse the Administrator for the premier company's 10
percent share of the loss as provided in subsection (b)(2)(C).
If the company utilizes the reserve, within 30 days it shall
replace an equivalent amount of funds.
``(6) Disbursements.--The Administrator shall allow the
qualified State and local development company to withdraw from
the loss reserve such amounts as are in excess of 1 percent of
the aggregate outstanding balances of debentures to which such
loss reserve relates. The preceding sentence shall not apply
with respect to any debenture before 100 percent of the
contribution described in paragraph (4) with respect to such
debenture has been made.
``(7) Alternative loss reserve.--
``(A) Election.--With respect to any eligible
calendar quarter, a qualified high loss reserve premier
certified lender may elect to have the requirements of
this paragraph apply in lieu of the requirements of
paragraphs (2) and (4) for that quarter.
``(B) Contributions.--
``(i) Ordinary rules inapplicable.--Except
as provided under clause (ii) and paragraph
(5), a qualified high loss reserve premier
certified lender that makes the election
described in subparagraph (A) with respect to a
calendar quarter shall not be required to make
contributions to its loss reserve during that
quarter.
``(ii) Based on loss.--A qualified high
loss reserve premier certified lender that
makes the election described in subparagraph
(A) with respect to a calendar quarter shall,
before the last day of that quarter, make such
contributions to its loss reserve as are
necessary to ensure that the amount of the loss
reserve of the lender--
``(I) is not less than $100,000;
and
``(II) is sufficient, as determined
by a qualified independent auditor, for
the lender to meet its obligations
to protect the Government from risk of loss.
``(iii) Certification.--Before the end of a
calendar quarter for which an election is in
effect under subparagraph (A), the head of the
premier certified lender shall submit to the
Administrator a certification that the loss
reserve of the lender is sufficient to meet the
lender's obligation to protect the Government
from risk of loss. The certification shall be
submitted in such form and manner as the
Administrator may require and shall be signed
by the head of the lender and by the auditor
making the determination under clause (ii)(II).
``(C) Disbursements.--
``(i) Ordinary rule inapplicable.--
Paragraph (6) shall not apply with respect to
any qualified high loss reserve premier
certified lender for any calendar quarter for
which an election is in effect under
subparagraph (A).
``(ii) Excess funds.--At the end of each
calendar quarter for which an election is in
effect under subparagraph (A), the
Administrator shall allow the qualified high
loss reserve premier certified lender to
withdraw from its loss reserve the excess of--
``(I) the amount of the loss
reserve, over
``(II) the greater of $100,000 or
the amount which is determined under
subparagraph (B)(ii) to be sufficient
to meet the lender's obligation to
protect the Government from risk of
loss.
``(D) Recontribution.--If the requirements of this
paragraph apply to a qualified high loss reserve
premier certified lender for a calendar quarter and
cease to apply to that lender for any subsequent
calendar quarter, the lender shall make a contribution
to its loss reserve in such amount as the Administrator
may require, except that the amount shall not exceed
the amount which would result in the total amount in
the loss reserve being equal to the amount which would
have been in the loss reserve had this paragraph never
applied to the lender. The Administrator may require
that the contribution be made as a single payment or as
a series of payments.
``(E) Risk management.--If a qualified high loss
reserve premier certified lender fails to meet the
requirement of subparagraph (F)(iii) during any period
for which an election is in effect under subparagraph
(A) and the failure continues for 180 days, the
requirements of paragraphs (2), (4), and (6) shall
apply to the lender as of the end of the 180-day period
and the lender shall make the contribution described in
subparagraph (D). The Administrator may waive the
requirements of this subparagraph.
``(F) Qualified high loss reserve premier certified
lender.--The term `qualified high loss reserve premier
certified lender' means, with respect to a calendar
year, a premier certified lender so designated by the
Administrator for that year. The Administrator shall
not designate a company under the preceding sentence
unless the Administrator determines that--
``(i) the amount of the loss reserve of the
company is not less than $100,000;
``(ii) the company has established and is
utilizing an appropriate and effective process
for analyzing the risk of loss associated with
its portfolio of Premier Certified Lenders
Program loans and for grading each Premier
Certified Lenders Program loan made by the
company on the basis of the risk of loss
associated with such loan; and
``(iii) the company meets or exceeds 4 or
more of the specified risk management
benchmarks as of the most recent assessment by
the Administration or the Administrator has
issued a waiver with respect to the requirement
of this clause.
``(G) Specified risk management benchmarks.--For
purposes of this paragraph, the term `specified risk
management benchmarks' means the following rates, as
determined by the Administrator:
``(i) Currency rate.
``(ii) Delinquency rate.
``(iii) Default rate.
``(iv) Liquidation rate.
``(v) Loss rate.
``(H) Qualified independent auditor.--For purpose
of this paragraph, the term `qualified independent
auditor' means an auditor who--
``(i) is compensated by the qualified high
loss reserve premier certified lender;
``(ii) is independent of the lender; and
``(iii) has been approved by the
Administrator during the preceding year.
``(I) Premier certified lenders program loan.--For
purposes of this paragraph, the term `Premier Certified
Lenders Program loan' means a loan guaranteed under
this section.
``(J) Eligible calendar quarter.--For purposes of
this paragraph, the term `eligible calendar quarter'
means--
``(i) the first calendar quarter that
begins after the end of the 90-day period
beginning with the date of the enactment of
this paragraph; and
``(ii) the 7 succeeding calendar quarters.
``(K) Regulations.--Not later than 60 days after
the date of the enactment of this paragraph, the
Administrator shall publish in the Federal Register and
transmit to the Congress regulations to carry out this
paragraph. Such regulations shall include provisions
relating to--
``(i) the approval of auditors under
subparagraph (H); and
``(ii) the designation of qualified high
loss reserve premier certified lenders under
subparagraph (F), including the determination
of whether a process for analyzing risk of loss
is appropriate and effective for purposes of
subparagraph (F)(ii).
``(8) Bureau of premier certified lenders program
oversight.--
``(A) Establishment.--There is hereby established
in the Administration a bureau to be known as the
Bureau of Premier Certified Lenders Program Oversight,
within the Office of Lender Oversight established
pursuant to section 6 of the Small Business Act.
``(B) Purpose.--The Bureau shall carry out such
functions under this subsection as the Administrator
may designate. The functions of the Bureau under the
preceding sentence may not be delegated to a district
director or any other employee assigned to a district
office or regional office established by the
Administrator under section 4 of the Small Business Act
(15 U.S.C. 633).
``(C) Deadline.--Not later than 90 days after the
date of the enactment of this paragraph--
``(i) the Administrator shall ensure that
the Bureau is prepared to carry out the
functions designated under subparagraph (B),
and
``(ii) the Inspector General of the
Administration shall report to the Congress on
the preparedness of the Bureau to carry out
such functions.
``(D) If the Administrator does not comply with
subparagraph (C)(i), the certifications required under
this section shall be deemed approved until the date of
compliance. Certifications so deemed approved shall
continue in effect notwithstanding any later compliance
with that subparagraph.
``(d) Sale of Certain Defaulted Loans.--
``(1) Notice.--If, upon default in repayment, the
Administrator acquires a loan guaranteed under this section and
identifies such loan for inclusion in a bulk asset sale of
defaulted or repurchased loans or other financings, it shall
give prior notice thereof to any qualified State and local
development company which has a contingent liability under this
section. The notice shall be given to the company as soon as
possible after the financing is identified, but not less than
90 days before the date the Administrator first makes any
records on such financing available for examination by
prospective purchasers prior to its offering in a package of
loans for bulk sale.
``(2) Limitations.--The Administrator shall not offer any
loan described in paragraph (1) as part of a bulk sale unless
it--
``(A) provides prospective purchasers with the
opportunity to examine the Administrator's records with
respect to such loan; and
``(B) provides the notice required by paragraph
(1).
``(e) Loan Approval Authority.--
``(1) In general.--Notwithstanding section 503(b)(6), and
subject to such terms and conditions as the Administrator may
establish, the Administrator may permit a company designated as
a premier certified lender under this section to approve,
authorize, close, service, foreclose, litigate (except that the
Administrator may monitor the conduct of any such litigation to
which a premier certified lender is a party), and liquidate
loans that are funded with the proceeds of a debenture issued
by such company and may authorize the guarantee of such
debenture.
``(2) Scope of review.--The approval of a loan by a premier
certified lender shall be subject to final approval as to
eligibility of any guarantee by the Administrator pursuant to
section 503(a), but such final approval shall not include
review of decisions by the lender involving creditworthiness,
loan closing, or compliance with legal requirements imposed by
law or regulation.
``(f) Review.--After the issuance and sale of debentures under this
section, the Administrator, at intervals not greater than 12 months,
shall review the financings made by each premier certified lender. The
review shall include the lender's credit decisions and general
compliance with the eligibility requirements for each financing
approved under the program authorized under this section. The
Administrator shall consider the findings of the review in carrying out
its responsibilities under subsection (g), but such review shall not
affect any outstanding debenture guarantee.
``(g) Suspension or Revocation.--The designation of a qualified
State and local development company as a premier certified lender may
be suspended or revoked if the Administrator determines that the
company--
``(1) has not continued to meet the criteria for
eligibility under subsection (b);
``(2) has not established or maintained the loss reserve
required under subsection (c);
``(3) is failing to adhere to the Administrator's rules and
regulations; or
``(4) is violating any other applicable provision of law.
``(h) Effect of Suspension or Revocation.--A suspension or
revocation under subsection (g) shall not affect any outstanding
debenture guarantee.
``(i) Program Goals.--Each qualified State and local development
company participating in the program under this section shall establish
a goal of processing a minimum of not less than 50 percent of the loan
applications for assistance under section 504 pursuant to the program
authorized under this section.
``(j) Report.--The Administrator shall annually report to the
Committee on Small Business of the House of Representatives and the
Committee on Small Business and Entrepreneurship of the Senate on the
implementation of this section. Each report shall include--
``(1) the number of qualified State and local development
companies designated as premier certified lenders;
``(2) the debenture guarantee volume of such companies;
``(3) a comparison of the loss rate for premier certified
lenders to the loss rate for accredited and other lenders,
specifically comparing default rates and recovery rates on
liquidations; and
``(4) such other information as the Administrator deems
appropriate.''.
(b) Effective Date.--Section 508(c)(6) of the Small Business
Investment Act of 1958 (as amended by subsection (a)) shall apply to
withdrawals after the end of the 90-day period beginning on the date of
the enactment of this Act.

SEC. 127. FORECLOSURE AND LIQUIDATION OF LOANS.

Section 510 of the Small Business Investment Act of 1958 (15 U.S.C.
697g) is amended--
(1) in subsection (a), by striking ``that meets the
eligibility requirements of subsection (b)(1)''; and
(2) by striking subsection (b) and all that follows through
the end of such section and inserting the following new
subsections:
``(b) Election by Qualified State or Local Development Company.--
``(1) A qualified State or local development company shall
be eligible for the delegation of authority under subsection
(a) if such company elects to accept such delegation during the
90-day period beginning on the date of the enactment of this
subsection.
``(2) One year after the date of the initial election, and
annually thereafter by a date specified by the Administrator, a
qualified State or local development company may make a new
election to accept the delegation under subsection (a).
``(3) An election under this subsection shall apply to all
loans in the portfolio involved. An election made in a
subsequent year does not terminate any foreclosure or
liquidation under a previous election.
``(c) Scope of Delegated Authority.--
``(1) Each qualified State or local development company
that makes an election under subsection (b) shall perform all
functions related to liquidation and foreclosure without
obtaining prior approval of the Administrator.
``(2) Not later than 5 calendar days after exercising
delegated authority with respect to a specific loan, the
qualified State or local development company shall report to
the Administrator the actions that the company proposes to take
with respect to the loan.
``(3) The Administrator may prohibit an action proposed
under paragraph (2) by so notifying the company in writing. The
notification shall state the reasons for the prohibition,
including a detailed explanation of how the proposed actions--
``(A) will have a serious adverse effect on
management of the Administration's activities under
this title; or
``(B) will affect the legal rights of the
Administration or other agencies or instrumentalities
of the United States.
``(4) A prohibition under paragraph (3) shall apply only to
the loan involved and shall not affect any other delegation.
``(d) Purchase of Indebtedness.--A qualified State or local
development company may not commit the Administration to the purchase
of additional indebtedness secured by property that is the subject of a
defaulted loan without the written approval of the Administrator. The
Administrator shall have 7 calendar days in which to act on a request
for approval for such an additional purchase. Action by the
Administrator under this subsection shall have no other effect on the
delegation of authority exercised by the qualified State or local
development company.
``(e) Foreclosure and Liquidation by Administrator.--
``(1) The Administrator shall issue contracts to foreclose
or liquidate loans made during any year for which a qualified
State or local development company did not make an election
under subsection (b).
``(2) In awarding contracts under this subsection, the
Administrator shall not consolidate contract requirements that
relate to more than one qualified State or local development
company unless the Administrator determines that such
consolidation will achieve--
``(A) a reduction in cost of not less than 10
percent; or
``(B) an increase in the recovered amount of not
less than 10 percent.
``(3) In awarding contracts under this section, the
Administrator shall consider the experience and expertise of
the offeror regarding the conduct of similar foreclosure and
liquidation of indebtedness, the bankruptcy laws of the United
States, valuation of property, and successful litigation.
``(4) Reimbursement to contractors under this subsection
shall be based on recovery of their costs (including salaries,
expenses, and overhead) and a contingent fee, with respect to
each loan which is subject to the contract, as follows:
``(A) In the case of recovery of at least 50
percent of outstanding amount of such loan, a
contingent fee equal to 5 percent of the recovery.
``(B) In the case of recovery of at least 75
percent of such amount, a contingent fee equal to 10
percent of the recovery.''.

SEC. 128. ADDITIONS TO TITLE V.

Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695
et seq.) is amended by adding at the end the following new sections:

``SEC. 511. SHORT FORM APPLICATION.

``(a) In General.--Not later than 120 days after the date of the
enactment of this section, the Administrator shall prescribe--
``(1) a low documentation loan application form for use in
making loans under section 502 for guarantees of not more than
$500,000; and
``(2) for all other loans made under section 502, a short
form application form that reduces the amount of information
needed to process the loan by 30 percent from the size of the
loan application in effect on January 1, 2003.
``(b) Use of Development Company Forms.--If the Administrator does
not comply with paragraph (1) or (2) of subsection (a), a qualified
State or local development company may use its own forms until the
Administrator prescribes the form involved.

``SEC. 512. CENTRALIZED DEVELOPMENT COMPANY LOAN PROCESSING.

``(a) Establishment.--
``(1) Not later than 180 days after the date of the
enactment of this section, the Administrator shall, using
already appropriated funds and fees paid by qualified State and
local development companies, establish two centers for
approving loans under section 502, except as otherwise provided
in section 508.
``(2) The loan centers may not be located in the same
Federal Region. One center shall be located in Region 1, 2, 3,
4, or 5, and one center shall be located in Region 6, 7, 8, 9,
or 10.
``(3) The Administrator is authorized to locate the centers
with its existing LowDoc Loan Application Centers in Hazard, KY
and Sacramento, CA, but employees who review applications for
loans under section 502 shall not review applications for loan
guarantees under section 7 of the Small Business Act (15 U.S.C.
636).
``(4) If the Administrator does not establish the centers
required by paragraph (1), the qualified State and local
development companies shall have the authority to approve or
deny applications without the consent of the Administrator.
``(b) Timing.--
``(1)(A) From the date on which a loan application is
received at a center established under subsection (a), the
Administration shall have 5 business days to approve or deny
the application.
``(B) Not later than one business day after the date on
which an application is received, the Administration shall
notify the applicant and the qualified State or local
development company in writing that the application was
received and was either complete or incomplete. The
notification shall specify the date and time at which the
application was received. If the application is incomplete, the
notification shall specify the material needed to make the
application complete.
``(C) The Administration may return an application for
incompleteness not more than 3 times after which the applicant
may use forms developed by the qualified State or local
development company.
``(2) An accredited lender designated under section 507
shall have the authority to approve or deny a loan application
if the Administration does not act within 5 business days from
the date a complete application is received by the center.
Notwithstanding any other law, a qualified State or local
development company that is not designated as an accredited or
premier certified lender shall have the authority to approve or
deny a loan if the Administration does not make a decision
within 20 business days.
``(c) Appeal of Denial.--
``(1) An applicant shall have the right to appeal a denial
to the Regional Administrator for the region in which the
qualified State or local development company is headquartered.
Not later than 3 business days after receipt, the Regional
Administrator shall either concur with the denial or approve
the loan.
``(2) If the Regional Administrator denies the loan, the
applicant shall have the right of appeal to the Deputy
Administrator. Not later than 3 business days after receipt,
the Deputy Administrator shall either concur with the denial by
the Regional Administrator or approve the loan.
``(3) The decision of the Deputy Administrator shall
constitute final agency action for purposes of chapter 7 of
title 5, United States Code.

``SEC. 513. REPORTS.

``The Administrator shall report on the performance of the loans
made under this title on a semi-annual basis to the Committee on Small
Business of the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate. Such report shall include
the currency and default rates.''.

SEC. 129. REGULATIONS TO CARRY OUT AMENDMENTS TO LOAN PROGRAM.

(a) Issuance.--Except as otherwise provided in title I, the
Administrator shall, not later than 90 days after the date of the
enactment of this Act, prescribe such regulations as are necessary to
carry out the provisions of this Act that relate to title V of the
Small Business Investment Act of 1958 and shall provide a minimum of 30
days notice and comment with respect to such regulations.
(b) Temporary Prohibition on Other Rulemaking.--During the period
beginning on the date of the enactment of this Act and ending on the
date that is 1 year after the date on which the centralized loan
processing centers described in section 512 of the Small Business
Investment Act of 1958 begin operations, the Administration shall not
begin or conclude any rulemaking to modify the program established by
title V of such Act unless such rulemaking is necessary to carry out
the provisions of this Act described in subsection (a).

SEC. 130. CONFORMING AMENDMENTS.

Section 503(c)(1) and section 503(e)(2) of the Small Business
Investment Act of 1958 (15 U.S.C. 697(c)(1) and 697(e)(2)) are each
amended by striking ``certified'' and inserting ``qualified State or
local''.

SEC. 131. DEVELOPMENT COMPANY AFFILIATES.

Section 501 of the Small Business Investment Act of 1958 (15 U.S.C.
695(e)), as amended by section 121, is further amended by adding at the
end the following new subsection:
``(f) Development Company Affiliates.--
``(1) In general.--The Administrator shall permit a
qualified State development company under this section and
section 502 to affiliate with a lender authorized to make loans
under section 7(a) of the Small Business Act (15 U.S.C. 636(a))
if--
``(A) the affiliate is a qualified State
development company under this section or section 502;
``(B) the affiliate is chartered by a special Act
of the State legislature for purposes of economic
development and job creation through investment of
public and private capital, without regard to any
return on the expected capital; or
``(C) the affiliate is a business development
company chartered by the State with the primary purpose
of economic development through small business
financing programs.
``(2) Special rule.--An affiliate that meets a criterion
under subparagraph (A), (B), or (C) of paragraph (1) is not
required to have a full-time manager if the qualified State
development company has management in common with the
affiliate.''.

TITLE II--SMALL BUSINESS ACT AMENDMENTS AND RELATED PROVISIONS.

SEC. 201. SHORT TITLE.

This title may be cited as the ``Small Business Amendments Act of
2003''.

SEC. 202. FINDINGS; STATEMENTS OF POLICY.

Section 2 of the Small Business Act (15 U.S.C. 631) is amended to
read as follows:

``SEC. 2. FINDINGS; STATEMENTS OF POLICY.

``(a) Aid, Counsel, Assistance, etc., to Small Business Concerns.--
The essence of the American economic system of private enterprise is
free competition. The preservation and expansion of such competition is
basic not only to the economic 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, including small
manufacturers, 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, including small manufacturers, in order to preserve free
competitive enterprise, to insure that a fair proportion of the total
purchases and contracts or subcontracts for manufactured goods, and
property and services for the Government (including but not limited to
contracts or subcontracts for maintenance, repair, and construction) be
placed with small business concerns, to insure that a fair proportion
of the total sales of Government property be made to such concerns, and
to maintain and strengthen the overall economy of the Nation.
``(b) Assistance To Compete in International Markets.--
``(1) It is the declared policy of the Congress that the
Federal Government, through the Small Business Administration,
acting in cooperation with the Department of Commerce and other
relevant State and Federal agencies, should aid and assist
small business concerns and small manufacturers 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 efficiently against imports;
``(D) increasing the access of small business
concerns 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 business concerns to
compete in international markets;
``(F) ensuring that the interests of small business
concerns are adequately represented in bilateral and
multilateral trade negotiations; and
``(G) improving the economic health of small
manufacturers through reduction in unnecessary
regulation and improvements in the procurement process
that will enhance the ability of small manufacturers to
compete against foreign manufacturers.
``(2) The Congress recognizes that the Department of
Commerce is the principal Federal agency for trade development,
export promotion, and manufacturing assistance, 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) Aid for Agriculturally Related Industries; Financial
Assistance.--It is the declared policy of the Congress that the
Government, through the Small Business Administration, should provide
aid and assistance, including the financial assistance authorized by
this Act, to 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.
``(d) Use of Assistance Programs To Establish, Preserve, and
Strengthen Small Business Concerns.--
``(1) The assistance programs authorized by sections 7(i),
8(a), and 8(b) should be utilized to assist in the
establishment, preservation, and strengthening of small
business concerns and the improvement of the managerial skills
employed in such concerns, with special attention to small
business concerns--
``(A) located in urban or rural areas with high
proportions of unemployed or low-income individuals;
and
``(B) owned by low-income individuals.
``(2) With respect to the programs authorized by section
8(a), the Congress finds--
``(A) that ownership and control of productive
capital is concentrated in the economy of the United
States and certain groups, therefore, own and control
little productive capital;
``(B) that certain groups in the United States own
and control little productive capital because they have
limited opportunities for small business ownership;
``(C) 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 enterprise system
of the United States;
``(D) 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 business ownership development
program, which shall provide services, including, but
not limited to, financial, management, and technical
assistance;
``(E) that the power to let Federal contracts
pursuant to section 8(a) can be an effective
procurement assistance tool for development of business
ownership, including ownership of small manufacturers,
among groups that own and control little productive
capital; and
``(F) that the procurement authority under section
8(a) shall be used only as a tool for developing
business ownership among groups that own and control
little productive capital.
``(3) It is therefore the purpose of the programs
authorized by section 8(a) to--
``(A) foster business ownership and development by
individuals in groups that own and control little
productive capital; and
``(B) promote the competitive viability of such
firms in the marketplace by creating a small business
and capital ownership development program to provide
such available financial, technical, and management
assistance as may be necessary.
``(e) Participation in Free Enterprise System by Socially and
Economically Disadvantaged Persons.--
``(1) With respect to the business development programs
carried out by the Administrator, the Congress finds--
``(A) that the opportunity for full participation
in our free enterprise system by socially and
economically disadvantaged individuals is essential if
we are to obtain social and economic equality for such
individuals and improve the functioning of our national
economy;
``(B) that many such individuals are socially
disadvantaged because 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, Asian Pacific Americans, Native Hawaiian
Organizations, and other minorities;
``(D) that it is in the national interest to
expeditiously ameliorate the conditions of socially and
economically disadvantaged groups;
``(E) that such conditions can be improved by
providing the maximum practicable opportunity for the
development of small business concerns and small
manufacturers owned by members of socially and
economically disadvantaged groups;
``(F) that such development can be materially
advanced through the procurement by the United States
of articles, equipment, supplies, services, materials,
and construction work from small business concerns and
small manufacturers; and
``(G) that such procurements also benefit the
United States by encouraging the expansion of suppliers
for such procurements, thereby encouraging competition
among such suppliers and promoting economy in such
procurements.
``(2) It is therefore the purpose of section 8(a) to--
``(A) promote the business development of small
business concerns and small manufacturers 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 management
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 and small manufacturers owned by
socially and economically disadvantaged individuals.
``(f) Assistance to Disaster Victims Under Disaster Loan Program.--
In administering the disaster loan program authorized by section 7, the
Administrator should--
``(1) provide assistance and counseling to disaster victims
in filing applications;
``(2) provide information relevant to loan processing and
loan closing;
``(3) promptly disburse loan proceeds; and
``(4) give the disaster program a high priority in
allocating funds for administrative expenses.
``(g) Assistance to Women Owned Business.--
``(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, revenues, 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
subjected to discrimination in entrepreneurial
endeavors due to their gender;
``(D) such discrimination takes many overt and
subtle forms adversely affecting the ability to raise
or secure capital, to acquire 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 system by women and to further
increase the economic vitality of the Nation;
``(G) increased numbers of small business concerns
owned and controlled by women who 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 business concerns owned and controlled by women
must be implemented in such a way as to remove such
discriminatory barriers 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 entrepreneurs 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 discriminatory barriers facing women and
that such effort directly involve the participation of
women business owners in the partnership of the public
and private sectors.
``(h) Contract Bundling.--It is the declared policy of the Congress
that each Federal agency should--
``(1) comply with congressional intent to foster the
participation of small business concerns, in the following
order, as prime contractors, subcontractors, and suppliers;
``(2) structure its contracting requirements to facilitate
competition by and among small business concerns, taking all
reasonable steps to eliminate obstacles to their participation;
and
``(3) avoid unnecessary and unjustified bundling of
contract requirements that precludes small business
participation in procurements as prime contractors.
``(i) Small Manufacturers.--
``(1) With respect to the programs and activities
authorized by this Act, the Congress finds that--
``(A) the manufacturing sector is a critical
element of the Nation's economic security because it
provides high-paying jobs that support other sectors of
the economy dominated by small business;
``(B) America's small manufacturers face
substantial competition from large manufacturers that
source components and equipment from business concerns
located in other countries with lower wage rates, fewer
regulatory restrictions, and beneficial currency
policies;
``(C) it is in the national interest to
expeditiously grow America's small manufacturers; and
``(D) such growth can be achieved through better
access to capital, improved technical assistance, and
increased procurement of manufactured goods by the
United States, America's universities, and large
businesses that would otherwise source goods overseas.
``(2) It is therefore, the purpose of those programs and
activities conducted under the authority of this Act that
assist small manufacturers to--
``(A) vigorously promote the legitimate interests
of small manufacturers;
``(B) remove, insofar as possible, barriers that
are encountered by small manufacturers in accessing
capital, obtaining necessary technical assistance, and
selling goods to the United States, America's
universities, and large businesses that would otherwise
source goods overseas;
``(C) require the Administrator to engage in a
systematic and sustained effort to identify, define,
and analyze the barriers to growth facing America's
small manufacturers, recommend changes in policy that
will reduce those barriers, and promote the involvement
of America's small manufacturers in the partnership of
the public and private sectors.''.

SEC. 203. DEFINITIONS.

Section 3 of the Small Business Act (15 U.S.C. 632) is amended to
read as follows:

``SEC. 3. 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.
``(2) Establishment of size standards.--
``(A) In general.--In addition to the criteria
specified in paragraph (1), the Administrator may
specify detailed definitions or standards by which a
business concern may be determined to be a small
business concern for the purposes of this Act or any
other Act.
``(B) Additional criteria.--The standards described
in paragraph (1) may utilize number of employees,
dollar volume of business, net worth, net income, a
combination thereof, or other appropriate factors.
``(C) Requirements.--Unless specifically authorized
by statute, no Federal department or agency may
prescribe a size standard for categorizing a business
concern as a small business concern, unless such
proposed size standard--
``(i) is proposed after an opportunity for
public notice and comment;
``(ii) provides for determining--
``(I) the size of a manufacturing
concern as measured by the
manufacturing concern's average
employment based upon employment during
each of the manufacturing concern's pay
periods for the preceding 12 months;
``(II) the size of a business
concern providing services on the basis
of the annual average gross receipts of
the business concern over a period of
not less than 3 years;
``(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.
``(D) Industry variation.--When establishing or
approving any size standard pursuant to this paragraph,
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.
``(3) Agricultural enterprises.--Notwithstanding paragraphs
(1) and (2), an agricultural enterprise shall be deemed to be a
small business concern if it (including its affiliates) has
annual receipts not in excess of $750,000.
``(4) Recertifications.--
``(A) Timing restriction.--For purposes of
determining if a business concern that has been awarded
a contracting opportunity as a small business concern
is still a small business concern, the Administrator
shall not require such concern to be recertified as a
small business concern more frequently than each 5
years, unless there has been a change in ownership,
control, or affiliation, in which case the small
business concern shall recertify its status at that
time.
``(B) Growth threshold.--In the case of any
recertification described in subparagraph (A) of a
business concern, such concern shall not fail to be
treated as a small business concern for purposes of
contracting opportunities awarded before the date of
such recertification solely because such concern
exceeds--
``(i) the annual receipts standard
applicable to such concern by 20 percent or
less of such standard; or
``(ii) the number of employees standard
applicable to such concern by 5 percent or less
of such standard.
``(b) Agency.--For purposes of this Act, any reference to an agency
or department 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) Qualified Employee Trusts.--For purposes of this Act:
``(1) 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 1986)--
``(i) which is maintained by such concern;
and
``(ii) which provides that each participant
in the plan is entitled 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 Administrator which is binding on
the trust and on such small business concern and which
provides that--
``(i) the loan guaranteed under section
7(a) shall be used solely for the purchase of
qualifying employer securities 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 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.
``(2) Under regulations which may be prescribed by the
Administrator, 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 employees of such concern; and
``(B) such concern maintains a plan--
``(i) which is an employee benefit plan
which is designed to invest primarily in
qualifying employer securities (as defined in
section 4975(e)(8) of the Internal Revenue Code
of 1986);
``(ii) which provides that each participant
in the plan is entitled to direct the plan as
to the manner in which voting rights under
qualifying employer securities 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 the outstanding
common shares voted;
``(iii) which provides that each
participant who is entitled 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 concern repurchase such
securities under a fair valuation formula; and
``(iv) which meets such other requirements
(similar to requirements applicable to employee
stock ownership plans as defined in section
4975(e)(7) of such Code) 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) Definitions Relating to Indian Tribes.--For purposes of this
Act:
``(1) Indian tribe.--The term `Indian tribe' has the
meaning given such term in section 4(e) of the Indian Self-
Determination and Education Assistance Act.
``(2) Qualified indian tribe.--The term `qualified Indian
tribe' means any Indian tribe that owns and controls 100
percent of a small business concern, except as otherwise
provided in section 8.
``(e) State; United States.--For purposes of this Act, the terms
`State' and `United States' include each of the several States, the
District of Columbia, the Commonwealth of Puerto Rico, the United
States Virgin Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands.
``(f) Contracting Officer.--For purposes of this Act, the term
`contracting officer' has the meaning given such term in section
27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).
``(g) Small Business Development Center.--For purposes of this Act,
the term `small business development center' means any office that
provides any portion of the services described in section 21 under such
section.
``(h) Credit Elsewhere.--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 transacts business, or the homeowner resides, for similar
purposes and periods of time.
``(i) Homeowners.--For purposes of this Act, the term `homeowners'
includes owners and lessees of residential property and also includes
personal property.
``(j) Small Agricultural Cooperative.--For purposes of this Act,
the term `small agricultural cooperative' 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 established by the Administrator for other
similar agricultural small business concerns. In determining such size,
the Administrator shall regard the association as a business concern
and shall not include the income or employees of any member shareholder
of such cooperative.
``(k) Disaster.--For purposes of this Act, the term `disaster'
means a sudden event which causes severe damage including floods,
hurricanes, tornadoes, earthquakes, fires, explosions, volcanoes,
windstorms, landslides or mudslides, tidal waves, riots, civil
disorders, acts of terrorism, or other catastrophes.
``(l) Agricultural Enterprises.--For purposes of this Act, the term
`agricultural enterprises' means those businesses engaged in the
production of food and fiber, ranching, and raising of livestock,
aquaculture, and all other farming and agricultural related industries.
``(m) Simplified Acquisition Threshold.--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) Small Business Concern Owned and Controlled by Women.--For
purposes of this Act, the term `small business concern owned and
controlled by women' means any small business concern if--
``(1) at least 51 percent of the 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.--For purposes of 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 without
regard to its designation by the procuring agency or whether a
study of the effects of the solicitation on civilian or
military personnel has been made.
``(2) Bundling of contract requirements.--The term
`bundling of contract requirements' means the use of any
bundling methodology to satisfy 2 or more requirements for
goods or services, including construction services, that have
previously 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 or order for which the offers
are solicited that is likely to be unsuitable for award to a
small business concern due to--
``(A) the diversity, size, or specialized nature of
the elements of the performance specified;
``(B) the aggregate dollar value of the anticipated
award;
``(C) the geographical dispersion of the contract
performance sites; or
``(D) any combination of the factors described in
subparagraphs (A), (B), and (C).
``(3) Bundling methodology.--The term `bundling
methodology' means--
``(A) a solicitation to obtain offers for a single
contract or a multiple award contract;
``(B) a solicitation of offers for the issuance of
a task or a delivery order under an existing single or
multiple award contract; or
``(C) the creation of any new procurement
requirement that permits a consolidation of contract
requirements.
``(4) Separate smaller contract.--The term `separate
smaller contract', with respect to a bundling of contract
requirements, 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.--For purposes of 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; or
``(D) redesignated 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 owned and
controlled by one or more persons, each of whom is a
United States citizen;
``(B) a small business concern that is--
``(i) an Alaska Native Corporation owned
and controlled 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 Corporation 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 partnership is owned and controlled by
Natives (as determined pursuant to section
29(e)(2)) of the Alaska Native 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 organizations, or by a
corporation that is wholly owned by one or more
Indian tribal organizations; or
``(ii) that is owned in part by one or more
Indian tribal organizations, or by a
corporation that is wholly owned by one or more
Indian tribal organizations, if all other
owners are either United States citizens or
small business concerns; or
``(D) a small business concern that is--
``(i) wholly owned by a community
development corporation 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 development corporations, if all
other owners are either United States citizens
or small business concerns.
``(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 statistical area (as defined in
section 143(k)(2)(B) of the Internal 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 such Code; 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; or
``(II) the unemployment rate is not
less than 140 percent of the Statewide
average unemployment rate for the State
in which the county is located, based
on the most recent data available from
the Secretary of Labor.
``(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 for
the 3-year period following the date on which the census tract or
nonmetropolitan county ceased to be so qualified.
``(5) Qualified hubzone small business concern.--
``(A) In general.--The term `qualified HUBZone
small business concern' means any small business
concern if the small business concern has certified in
writing to the Administrator (or the Administrator
otherwise determines, based on information submitted to
the Administrator by the small business concern, or
based on certification procedures, which shall be
established by regulation) that--
``(i) it is a HUBZone small business
concern--
``(I) pursuant to subparagraph (A),
(B), or (D) of paragraph (3), and that
its principal office is located in a
HUBZone and not fewer than 35 percent
of its employees reside in a HUBZone;
or
``(II) pursuant to paragraph
(3)(C), and not fewer than 35 percent
of its employees engaged in performing
a contract awarded to the small
business concern on the basis of a
preference provided under section 31(b)
reside within any Indian reservation
governed by one or more of the Indian
tribal organization 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 clause (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--
``(I) in the case of a contract for
services (except construction), not
less than 50 percent of the cost of
contract performance incurred for
personnel will be expended for its
employees or for employees of other
HUBZone small business concerns;
``(II) in the case of a contract
for procurement of supplies (other than
procurement from a regular dealer in
such supplies), not less than 50
percent of the cost of manufacturing
the supplies (not including the cost of
materials) will be incurred in
connection with the performance of the
contract in a HUBZone by 1 or more
HUBZone small business concerns;
``(III) it is a small business
concern, the majority of which is owned
and controlled by one or more
individuals determined by the
Administrator to be economically
disadvantaged; and
``(IV) it has received a site visit
from a district counsel to verify its
eligibility before first responding to
a solicitation from a Federal agency
for goods or services under section 31
and again before first responding to a
solicitation from a Federal agency for
goods or services under section 31
after any change in the primary
location of the concern.
``(B) Site visits by district counsel.--A district
counsel, not later than 5 days after conducting any
site visit described in subparagraph (A)(iii)(IV),
shall make a written certification to the district
director and general counsel regarding the status of
the concern as a qualified HUBZone small business
concern.
``(C) Provision of false information.--Such term
shall not include any small business concern if any
certification made or information provided by such
concern under subparagraph (A) 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
Administrator to be materially false.
``(D) Percentage adjustments.--The Administrator
may utilize a percentage other than the percentage
specified in subclause (I) or (II) of subparagraph
(A)(iii), if the Administrator determines that such
action is necessary to reflect conventional industry
practices among small business concerns that are below
the numerical size standard for businesses in that
industry category, but under no circumstance shall such
adjustment reduce the percentage below 33 percent.
``(E) Construction and other contracts.--The
Administrator shall promulgate final regulations
imposing requirements that are similar to those
specified in subclauses (I) and (II) of subparagraph
(A)(iii) on contracts for general and specialty
construction, and on contracts for any other industry
category that would not otherwise be subject to those
requirements. The percentage applicable to any such
requirement shall be determined in accordance with
subparagraph (D).
``(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
Native Village' has the same meaning as the term
`Native village' in section 3 of the Alaska Native
Claims Settlement Act (43 U.S.C. 1602).
``(C) Indian reservation.--The term `Indian
reservation'--
``(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 jurisdiction on
December 21, 2000, unless that tribe is
recognized after that date by either an
Act of Congress or pursuant to
regulations of the Secretary of the
Interior; and
``(II) lands taken into trust or
acquired by an Indian tribe after
December 21, 2000, if such lands are
not located within the external
boundaries of an Indian reservation or
former reservation or are not
contiguous to the lands held in trust
or restricted status on that date of
the enactment; and
``(ii) in the State of Oklahoma, means
lands that--
``(I) are within the jurisdictional
areas of an Oklahoma Indian tribe (as
determined by the Secretary of the
Interior); and
``(II) are recognized by the
Secretary of the Interior as eligible
for trust land status under part 151 of
title 25, Code of Federal Regulations
(as in effect on December 21, 2000).
``(D) Indian tribal organization.--The term `Indian
tribal organization' has the meaning given that term in
section 4(l) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 4506(l)).
``(q) Definitions Relating to Veterans.--For purposes of this Act:
``(1) Service-disabled veteran.--The term `service-disabled
veteran' means a veteran with a disability that is service-
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 concern
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
veterans or, in the case of a veteran with permanent
and severe 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
controlled 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.
``(r) Small Manufacturer.--For purposes of this Act, the term
`small manufacturer' means any small business concern if--
``(1) the primary business of the concern is classified in
sector 31, 32, or 33 of the North American Industrial
Classification System; and
``(2) all of its facilities that are used for production
are located in the United States.
``(s) Small Business Lending Company.--For purposes of this Act,
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 regulation by any
Federal or State regulatory agency.
``(t) Non-Federally Regulated SBA Lenders.--For purposes of this
Act, the term `Non-federally regulated SBA lenders' means a business
concern if--
``(1) such concern is authorized by the Administrator to
make loans under section 7;
``(2) such concern is subject to regulation by a State; and
``(3) the lending activities of such concern are not
regulated by any Federal banking authority.
``(u) Procurement Center Representative.--For purposes of this Act,
the term `procurement center representative' means an employee of the
Administration whose sole responsibility is to perform the functions
referred to in section 15(l).
``(v) Commercial Marketing Representative.--For purposes of this
Act, the term `commercial marketing representative' means an employee
of the Administration whose sole responsibility is to perform the
functions referred to in section 8(d).
``(w) Team.--For purposes of this Act, the term `team' means two or
more small business concerns who respond together to a solicitation, as
one entity, for the purposes of providing goods or services to a
Federal agency. A team shall be considered a small business concern
provided that each member of the team is a small business concern.''.

SEC. 204. SMALL BUSINESS ADMINISTRATION.

(a) In General.--Section 4 of the Small Business Act (15 U.S.C.
633) is amended to read as follows:

``SEC. 4. SMALL BUSINESS ADMINISTRATION.

``(a) Establishment.--In order to carry out the policies of this
Act and the Small Business Investment Act of 1958, there is an agency
known as the `Small Business Administration' (also referred to in this
Act as the Administration), which Administration shall be under the
general direction 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
located in the District of Columbia.
``(b) Appointment of Administrator and Deputy Administrator.--
``(1) Administrator.--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 familiar and sympathetic with the
needs and problems of small business concerns. The
Administrator shall not engage in any other business, vocation,
or employment other than that of serving as Administrator.
``(2) Deputy Administrator.--The President shall appoint,
by and with the advice and consent of the Senate, a Deputy
Administrator, whose principal function shall be to assist the
Administrator in the daily management of the Administration.
``(c) Powers of the Administrator.--
``(1) Use of seal.--The Administrator may adopt, alter, and
use a seal, which shall be judicially noticed.
``(2) Sue and be sued.--The Administrator may sue and be
sued in any court of record of a State having general
jurisdiction, or in any United States district court, and
jurisdiction is conferred upon such district court to determine
such controversies without regard to the amount in controversy;
but no attachment, garnishment, or other similar process, mesne
or final, shall be issued against the Administrator or his
property.
``(3) Rules and regulations.--The Administrator may make
such rules and regulations as he deems necessary to carry out
this Act and the Small Business Investment Act of 1958 (15
U.S.C. 661 et seq.). Any such rules or regulations, other than
those relating to agency management or personnel, shall be
issued pursuant to section 553(b) of title 5, United States
Code.
``(4) Facilities and staff of federal agencies.--Upon
request of the Administrator, the head of any Federal
department or agency may provide, on a reimbursable or
nonreimbursable basis, information, services, facilities
(including any field service thereof), or any of the personnel
of that department or agency to the Administrator to assist in
carrying out this Act and the Small Business Investment Act of
1958.
``(5) Investigations; subpoenas.--
``(A) Investigations.--The Administrator may make
such investigations as the Administrator deems
necessary to determine whether a recipient of or
participant in any assistance 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.
``(B) Statements.--The Administrator shall permit
any person to file with it a statement in writing,
under oath or otherwise as the Administrator shall
determine, as to all the facts and circumstances
concerning the matter to be investigated.
``(C) Subpoenas.--For the purpose of any
investigation, the Administrator may administer oaths
and affirmations, subpoena witnesses, compel 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.
``(D) Contempt proceedings.--In case of contumacy
by, or refusal to obey a subpoena issued to, any
person, including a recipient or participant, the
Administrator 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 carries 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
appear before the Administrator, there to produce
records, if so ordered, or to give testimony touching the matter under
investigation. 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.
``(6) Gifts.--
``(A) In general.--The Administrator may solicit,
accept, hold, administer, and utilize gifts, devises,
bequests, cash, and temporary use of property, both
real and personal, and donations of personal services
for the purpose of aiding or facilitating the
Administrator in providing training to persons,
employees, small business concerns and small
manufacturers, and technical assistance to small
business concerns and small manufacturers.
``(B) Audits.--Any such gifts, devises, or bequests
of property shall be held in a separate account and
shall be subject to quarterly audits by the Inspector
General of the Administration who shall report
quarterly to the Congress on the Administrator's use of
such gifts, bequests, devises, and donations of
personal services including an assessment of whether
such gifts, bequests, devises, and personal services
have advanced the purposes of this Act.
``(C) Authority to charge fees.--Notwithstanding
any other provision of this Act, the Administrator is
authorized to charge nominal fees to attendees in order
to cover costs for any event or publication produced
pursuant to subparagraph (A).
``(D) Conflicts of interest.--No employee of the
Administration may accept or solicit any gift, bequest,
devise, or donation of personal services if such
acceptance or solicitation would, in the opinion of the
General Counsel, create a conflict of interest.
``(E) Acceptance of services and facilities for
disaster loan program.--The Administrator may accept
the services 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). Subparagraph (B) shall not
apply to any services or facilities accepted under this
subparagraph.
``(7) Co-sponsorship of events.--
``(A) Authorization.--The Administrator, after
consultation with the General Counsel, may permit any
eligible donor of any gift, bequest, devise, or
donation of personal services to be a named cosponsor
of any event conducted by the Administrator or any
publication of the Administrator.
``(B) Eligible donor.--For purposes of this
paragraph, the term `eligible donor' means, with
respect to any event or publication, any donor if such
donor provides, directly or in-kind, at least 50
percent of the cost of such event or publication,
provided further that any such co-sponsorship must be
approved by an Associate Administrator, after
consultation with the General Counsel.
``(C) Limited delegation.--The Administrator may
not delegate the authority described in subparagraph
(A) except to the Deputy Administrator or any Associate
Administrator.
``(D) Report to congress.--The Inspector General of
the Administration shall report semi-annually to
Congress on the Administrator's use of co-sponsorship.
Such report shall include the Inspector General's
assessment of whether such co-sponsorships have
advanced the purposes of this Act.
``(d) Other Provisions.--
``(1) Requirements for assistance.--No loan shall be made
or equipment, facilities, or services furnished by the
Administrator under this Act to any business concern unless the
owners, partners, or officers of such business concern--
``(A) certify to the Administrator the names of any
attorneys, agents, or other persons engaged by or on
behalf of such business concern for the purpose of
expediting applications made to the Administrator for
assistance of any sort, and the fees paid or to be paid
to any such persons;
``(B) execute an agreement binding any such
business concern for a period of two years after any
assistance is rendered by the Administrator to such
business concern, 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
Administration occupying a position or engaging in
activities which the Administrator shall have
determined involve discretion with respect to the
granting of assistance under this Act; and
``(C) furnish the names of lending institutions to
which such business concern has applied for loans
together with dates, amounts, terms, and proof of
refusal.
``(2) Authority relating to transfer of functions.--The
President may transfer to the Administrator any functions,
powers, and duties of any department 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 available
to the department or agency from which the transfer is made.
``(3) Fair charges.--To the fullest extent the
Administrator deems practicable, he shall make a fair charge
for the use of Government-owned property and make and let
contracts on a basis that will result in a recovery of the
direct costs incurred by the Administrator.
``(4) Non-duplication.--The Administrator shall not
duplicate the work or activity of any other department or
agency of the Federal Government. 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.
``(5) Prepayment of rentals.--Subsections (a) and (b) of
section 3324 of title 31, United States Code, shall not apply
to prepayments of rentals made by the Administration on safety
deposit boxes used by the Administration for the safeguarding
of instruments held as security for loans or for the
safeguarding of other documents.
``(6) Nondiscrimination.--In carrying out this Act and the
Small Business Investment Act of 1958, 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 Administrator.
``(7) Groups receiving special consideration.--In providing
assistance under this Act and the Small Business Investment Act
of 1958, the Administrator shall give special consideration
to--
``(A) veterans of the Armed Forces of the United
States and their survivors or dependents; and
``(B) small manufacturers.
``(8) Unlawful residents.--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.
``(9) Obscene products and services.--The Administrator is
prohibited from providing any financial or other assistance to
any business concern or other person engaged in the production
or distribution of any product or service that has been
determined to be obscene by a court of competent jurisdiction.
``(10) Economic database; indices and reports.--The
Administrator shall--
``(A) establish and maintain an external small
business economic data base for the purpose of
providing the Congress and the President information on
the economic condition and the expansion or contraction
of the small business sector;
``(B) publish on a regular basis national small
business economic indices and, to the extent feasible,
regional small business economic indices, which shall
include data on--
``(i) employment, layoffs, and new hires;
``(ii) number of business establishments
and the types of such establishments such as
sole proprietorships, corporations, and
partnerships;
``(iii) number of business formations and
failures;
``(iv) sales and new orders;
``(v) back orders;
``(vi) investment in plant and equipment;
``(vii) changes in inventory and rate of
inventory turnover;
``(viii) sources and amounts of capital
investment, including debt, equity, and
internally generated funds;
``(ix) debt to equity ratios;
``(x) exports;
``(xi) number and dollar amount of mergers
and acquisitions by size of acquiring and
acquired firm; and
``(xii) concentration ratios; and
``(C) in consultation with the Chief Counsel for
Advocacy, publish 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).''.
(b) Related Repeals.--
(1) Section 13 of the Small Business Act (15 U.S.C. 642) is
amended to read as follows:

``SEC. 13. [RESERVED].''.

(2) Section 14 of the Small Business Act (15 U.S.C. 643) is
amended to read as follows:

``SEC. 14. [RESERVED].''.

(3) Section 18 of the Small Business Act (15 U.S.C. 647) is
amended to read as follows:

``SEC. 18. [RESERVED].''.

SEC. 205. FINANCIAL MANAGEMENT.

(a) In General.--Section 5 of the Small Business Act (15 U.S.C.
634) is amended to read as follows:

``SEC. 5. FINANCIAL MANAGEMENT.

``(a) Accounts.--
``(1) In general.--All repayments of loans, debentures,
payments of interest and other receipts arising out of
transactions heretofore or hereafter entered into by the
Administrator shall be deposited into appropriate accounts and
funds as determined by the Administrator.
``(2) Report and budget.--The Administrator shall submit to
the Committees on Appropriations, the Committee on Small
Business and Entrepreneurship of the Senate, 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 accounts and
funds referred to in paragraph (1). Business-type budgets for
each of the accounts and funds referred to in paragraph (1)
shall be prepared, transmitted to the Committees on
Appropriations, the Committee on Small Business and
Entrepreneurship of the Senate, and the Committee on Small Business of
the House of Representatives, and considered, and enacted in the manner
prescribed for wholly owned Government corporations under sections 9103
and 9104 of title 31, United States Code.
``(3) Issuance of notes.--
``(A) Issuance.--The Administrator may issue notes
to the Secretary of the Treasury for the purpose of
obtaining funds necessary for discharging obligations
under the accounts and funds referred to in paragraph
(1) and for authorized expenditures out of the accounts
and funds.
``(B) Form.--The notes authorized by this paragraph
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 Administrator with the
approval of the Secretary of the Treasury.
``(C) Interest rate.--Such notes shall bear
interest at a rate fixed by the Secretary of the
Treasury, taking into consideration the current average
market yield of outstanding marketable obligations of
the United States having maturities comparable to the
notes issued by the Administrator under this paragraph.
``(D) Purchase by treasury.--The Secretary of the
Treasury shall purchase any notes of the Administration
issued under subparagraph (A). For purposes of
purchasing such notes, the Secretary of the Treasury
may use as a public debt transaction the proceeds from
the sale of any securities issued under chapter 31 of
title 31, United States Code. The purposes for which
such securities may be issued under such chapter are
extended to include the purchase of notes issued by the
Administrator under subparagraph (A). 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.
``(4) Payments to treasury.--
``(A) Excess funds.--Moneys in any account or fund
referred to in paragraph (1) which are not needed for
current operations shall remain in such account or fund
and shall be available solely to carry out the
provisions and purposes of programs operated from such
account or fund pursuant to law as provided in
appropriations Acts.
``(B) Actual interest.--Following the close of each
fiscal year, the Administrator shall pay into the
miscellaneous receipts of the United States Treasury
the actual interest that the Administrator collects
during that fiscal year on all financings made under
this Act.
``(C) Other interest.--Except on those loan
disbursements on which interest is paid under
subparagraph (B), the Administrator 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 if 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.
``(5) Contributions to employees compensation fund.--The
Administrator shall contribute to the employee's compensation
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
financed by the accounts and funds referred to in paragraph
(1). The annual billings shall also include a statement of the
fair portion of the cost of the administration of such funds,
which shall be paid by the Administrator into the Treasury as
miscellaneous receipts.
``(6) Authorization of appropriations.--There are
authorized to be appropriated, in any fiscal year, such sums as
may be necessary for losses and interest subsidies incurred by
the accounts and funds referred to in paragraph (1) and not
previously reimbursed. All borrowing authority contained in
this subsection shall be effective only to such extent or in
such amounts as are provided in advance in appropriation Acts.
``(b) Financial Management Powers.--
``(1) Sale of financings, etc.--
``(A) In general.--The Administrator, under
regulations prescribed by him and codified in the Code
of Federal Regulations, may 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 he shall
determine to be reasonable, any evidence of debt,
contract, claim, personal property, 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.
``(B) Limitation.--Notwithstanding subparagraph
(A), the Administrator shall not sell any portion of
the Administration's interest in, or the rights of the
Administration with respect to, any loan made directly
or through immediate participation under section 7(b),
including by direct sale, through the sale of loan
participations, or by including such loan in a pool of
assets for the purpose of selling asset-backed
securities during--
``(i) the 3-year period beginning on the
date that such loan was originated; and
``(ii) the 3-month period beginning at the
end of such 3-year period if, at any time
during the 3-month period ending at the end of such 3-year period, the
Administrator was engaged in negotiations with the borrower for the
purpose of substantially altering the terms of such loan.
``(2) Use of federal reserve depositories.--All moneys of
the Administrator not otherwise employed may be deposited with
the Treasury of the United States subject to check by authority
of the Administrator. The Federal Reserve banks are authorized
and directed to act as depositaries, custodians, and fiscal
agents for the Administrator 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 Administrator. Each Federal Reserve bank, when
designated by the Administrator as fiscal agent for the
Administrator, shall be entitled to be reimbursed for all
expenses incurred as such fiscal agent.
``(3) Real property.--
``(A) Conveyance.--The Administrator may convey and
execute in the name of the Administration deeds of
conveyance, 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. Such authority 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.
``(B) Other authority.--The Administrator may deal
with, complete, renovate, improve, modernize, insure,
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 payment of loans granted under
this Act.
``(4) Collections.--The Administrator may pursue to final
collection, by way of compromise or otherwise, all claims
against third parties assigned to the Administrator in
connection with loans made by him, including by obtaining
deficiency judgments or otherwise in the case of mortgages
assigned to the Administrator.
``(5) Acquisition of property.--The Administrator may
acquire, in any lawful manner, any property (real, personal, or
mixed, tangible or intangible), whenever deemed necessary or
appropriate to the conduct of the activities authorized in
subsection (a) or (b) of section 7.
``(6) Power of attorney.--Nothing in this section shall
prevent the Administrator from delegating any authority
provided under this section by power of attorney to any officer
or agent he may appoint.
``(c) Sale of Guaranteed Loans by Lenders.--
``(1) In general.--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 Administrator shall establish, subject to the following
limitations:
``(A) Prior to the approval of the sale, or upon
any subsequent sale, of any loan guaranteed by the
Administrator, if the lender certifies that such loan
has been properly closed and that the lender has
substantially complied with the provisions of the
guarantee agreement and the regulations of the
Administrator, the Administrator shall review and
approve only materials not previously approved.
``(B) All fees due the Administrator on a
guaranteed loan shall have been paid in full prior to
any sale.
``(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) Treatment in secondary market.--After a loan is sold
in the secondary market, the lender shall remain obligated
under its guarantee agreement with the Administrator, and shall
continue to service the loan in a manner consistent with the
terms and conditions of such agreement.
``(3) Procedures.--The Administrator shall develop such
procedures as are necessary for:
``(A) The facilitation, administration, and
promotion of secondary market operations.
``(B) Assessing the increase of small business
access to capital at reasonable rates and terms as a
result of secondary market operations.
``(4) Certain regulations required.--The unguaranteed
portion of any loan made under section 7(a) shall not be sold
unless a final regulation promulgated by the Administrator is
in effect that applies uniformly to both depository
institutions and other lenders and sets 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.
``(5) Prepayments.--Nothing in this subsection or
subsection (d) shall be interpreted to impede or extinguish the
right of the borrower or the successor in interest to such
borrower to prepay (in whole or in part) any loan made pursuant
to section 7(a), 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 subsection (f)(3).
``(d) Issuance of Trust Certificates.--
``(1) In general.--The Administrator may issue trust
certificates representing ownership of all or a fractional part
of the guaranteed 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. Such
trust certificates shall be based on and backed by a trust or
pool approved by the Administrator and composed solely of the
entire guaranteed portion of such loans.
``(2) Guarantee.--
``(A) Authorization.--The Administrator is
authorized, upon such terms and conditions as are
deemed appropriate, to guarantee the timely payment of
the principal of and interest on trust certificates
issued by the Administrator or its agent for purposes
of this subsection. Such guarantee shall be limited to
the extent of principal and interest on the guaranteed
portions of loans which compose the trust or pool. 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 Administrator or its agent pursuant to
this subsection.
``(B) Prepayment.--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.
``(C) Interest; redemption.--Interest on prepaid or
defaulted loans shall accrue and be guaranteed by the
Administrator only through the date of payment on the
guarantee. During the term of the trust certificate, it
may be called for redemption due to prepayment or
default of all loans constituting the pool.
``(3) Fees.--
``(A) In general.--The Administrator may collect a
fee for any loan guarantee sold into the secondary
market under subsection (c) 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
Administrator.
``(B) Collection.--Any such fee imposed by the
Administrator shall be collected by the Administrator
or by the agent which carries out on behalf of the
Administrator the central registration functions
required by subsection (e) and shall be paid to the
Administrator and used solely to reduce the subsidy on
loans guaranteed under section 7(a). Any such fee shall
not be charged to the borrower whose loan is
guaranteed. Nothing in this paragraph shall preclude
any agent of the Administrator from collecting a fee
approved by the Administrator for the functions
described in subsection (e).
``(C) Late fees.--The Administrator is authorized
to impose and collect, either directly or through a
fiscal and transfer agent, a reasonable penalty on late
payments of the fee authorized under subparagraph (A)
in an amount not to exceed 5 percent of such fee per
month plus interest.
``(4) Subrogation.--In the event the Administrator pays a
claim under a guarantee issued under this subsection, it shall
be subrogated fully to the rights satisfied by such payment.
``(5) Laws superseded.--No federal, state, or local law,
shall preclude or limit the exercise by the Administrator of
its ownership rights in the portions of loans constituting the
trust or pool against which the trust certificates are issued.
``(e) Central Registry of Loans and Trust Certificates.--
``(1) Establishment.--Upon the adoption of final rules and
regulations, the Administrator shall--
``(A) provide for a central registration of all
loans and trust certificates sold pursuant to
subsections (c) and (d);
``(B) contract with an agent to carry out on behalf
of the Administrator the central registration functions
of this subsection and the issuance of trust
certificates to facilitate pooling;
``(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 (d),
information on the terms, conditions, and yield of such
instrument; and
``(D) have the authority to regulate brokers and
dealers in guaranteed loans and trust certificates sold
pursuant to subsections (c) and (d).
``(2) Bonding requirement.--The agent referred to in
paragraph (1)(B) shall provide a fidelity bond or insurance in
such amounts as the Administrator determines to be necessary to
fully protect the interest of the Government.
``(3) Seller.--For purposes of this subsection, the term
`seller', with respect to the sale of any loan, does not
include the entity which made the loan or any individual or
entity which sells three or fewer guaranteed loans per year.
``(4) Book-entry system.--Nothing in this subsection shall
prohibit the utilization of a book-entry or other electronic
form of registration for trust certificates. The Administrator
may, with the consent of the Secretary of the Treasury, use the
book-entry system of the Federal Reserve System.
``(5) Agent fees.--The Administrator may compensate an
agent described in paragraph (1)(B) through transaction and
servicing fees charged to program users and through interest
earnings on payments under the agent's control.
``(f) Other Special Rules and Authorities Related to Loan
Programs.--
``(1) In general.--The Administrator may take any and all
actions (including the procurement of the services of attorneys
by contract in any office where an attorney or attorneys are
not or cannot be economically employed full time to render such
services) when he determines such actions are necessary or
desirable in making, servicing, compromising, modifying,
liquidating, or otherwise dealing with or realizing on loans
made under the provisions of this Act. 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
Administrator, including determining eligibility
and creditworthiness and loan monitoring, collection, and liquidation.
``(2) Fees.--The Administrator may impose, retain, and use
only those fees which are specifically 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
disbursement 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 Administrator for
funding during the following year;
``(D) to recover the direct, incremental cost
involved in the production and dissemination of
compilations of information produced by the
Administrator under the authority of this Act and the
Small Business Investment Act of 1958; and
``(E) collect, retain and utilize, subject to
approval in appropriations Acts, any amounts collected
by fiscal transfer agents and not used by such agent as
payment of the cost of loan pooling or debenture
servicing operations, except that amounts collected
under this subsection shall be utilized solely to
facilitate the administration of the program that
generated the excess amounts.
``(3) Power to undertake and suspend loans.--
``(A) In general.--Subject to the requirements and
conditions contained in this paragraph, upon
application by a small business concern which is the
recipient of a loan made under this Act, the
Administrator 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 Administrator. While
such payments are being made by the Administrator
pursuant to the undertaking of such obligation or while
such obligation is suspended, no such payment with
respect to the loan may be required from the small
business concern.
``(B) Requirements.--The Administrator may
undertake or suspend for a period of not to exceed 5
years any small business concern's obligation under
this paragraph only if--
``(i) without such undertaking or
suspension of the obligation, the small
business concern would, in the sole discretion
of the Administrator, become insolvent or
remain insolvent;
``(ii) with the undertaking or suspension
of the obligation, the small business concern
would, in the sole discretion of the
Administrator, become or remain a viable small
business concern; and
``(iii) the small business concern executes
an agreement in writing satisfactory to the
Administrator as provided by subparagraph (D)
and takes such actions as are required under
subparagraph (E).
``(C) Extension of maturity.--Notwithstanding the
provisions of sections 7(a)(10) and 7(i)(1), the
Administrator may extend the maturity of any loan on
which the Administrator undertakes or suspends the
obligation pursuant to this paragraph for a
corresponding period of time.
``(D) Agreement.--Prior to the undertaking or
suspension by the Administrator of any small business
concern's obligation under this subsection, the
Administrator, consistent with the purposes sought to
be achieved under this paragraph, shall require the
small business concern to agree in writing to repay to
it the aggregate amount of the payments 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 frequently falling due than
those which were due under the loan during such
period;
``(ii) pursuant to a repayment schedule
agreed upon by the Administrator and the small
business concern; or
``(iii) by a combination of the payments
described in clauses (i) and (ii).
``(E) Security; other actions.--The Administrator
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
Administrator deems appropriate in the circumstances,
including the provision of such security as the
Administrator deems necessary or appropriate to insure
that the rights and interests of the lender
(Administration or participant) will be safeguarded
adequately during and after the period in which such
obligation is so undertaken or suspended.
``(F) Required payments.--For purposes of this
paragraph, the term `required payments' means, with
respect to any loan, payments of principal and interest
under the loan.
``(4) Interest rate on deferred participation share.--Upon
purchase by the Administrator of any deferred participation
entered into under section 7, the Administrator may 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.
``(5) Subordination to certain state tax liens.--Any
interest held by the Administrator 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 interest were held by any party other than the
United States.
``(g) Risk Management Database.--
``(1) Establishment.--The Administrator shall maintain,
within the management system for the loan programs authorized
by subsections (a) and (b) of section 7 and title V of the
Small Business Investment Act of 1958, a management information
system that will generate a database capable of providing
timely and accurate information in order to identify loan
underwriting, collections, recovery, and liquidation problems.
``(2) Contents.--In addition to such other information as
the Administrator considers appropriate, the database
established under this subsection shall, with respect to each
loan program described in paragraph (1), include information
relating to--
``(A) the identity of the institution making the
guaranteed loan or issuing the debenture;
``(B) the identity of the borrower;
``(C) the total dollar amount of the loan or
debenture;
``(D) the total dollar amount of government
exposure in each loan;
``(E) the district of the Administration in which
the borrower has its principal office;
``(F) the principal line of business of the
borrower, as identified by North American Industrial
Classification System Code;
``(G) the delinquency rate for each program
(including number of instances and days overdue);
``(H) the number and amount of repurchases, losses,
and recoveries in each program;
``(I) the number of deferrals or forbearances in
each program (including days and number of instances);
``(J) comparisons on the basis of loan program,
lender, Administration district and region, for all the
data elements maintained; and
``(K) 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.''.
(b) Related Repeal.--Section 17 of the Small Business Act (15
U.S.C. 646) is amended to read as follows:

``SEC. 17. [ RESERVED].''.

SEC. 206. ORGANIZATION AND STAFF.

(a) In General.--Section 6 of the Small Business Act (15 U.S.C.
635) is amended to read as follows:

``SEC. 6. ORGANIZATION AND STAFF.

``(a) General Organizational Authority.--
``(1) Offices.--Except as otherwise provided in this Act,
the Administrator may create subsidiary offices in the
Administration to carry out this Act and the Small Business
Investment Act of 1958.
``(2) Employees.--The Administrator may, in accordance with
applicable provisions of title 5, United States Code, select,
employ, appoint, and fix the compensation of such officers,
employees, attorneys, and agents as shall be necessary to carry
out this Act and the Small Business Investment Act of 1958.
``(b) Associate Administrators.--The Administrator shall only
appoint the following Associate Administrators:
``(1) The Associate Administrator for Capital Access, who
shall be appointed from civilian life and have a minimum of
five years experience in providing investment or banking
services to businesses.
``(2) The Associate Administrator for Government
Contracting and Minority Small Business Opportunities, who
shall have a minimum of five years of experience in Federal
procurement.
``(3) The Associate Administrator for Enterprise Outreach
and Training, who shall have a minimum of five years experience
in community-based outreach programs.
``(4) The Associate Administrator for Administration and
Management, who shall act as the Chief Operating Officer for
the Administration and who shall oversee the activities of the
regional administrators.
``(c) Establishment of Certain Offices.--There are in the
Administration the following offices:
``(1) The Office of Minority Small Business and Capital
Ownership Development, which shall be administered by the
assistant administrator appointed under subsection (d)(1).
``(2) The Office of Veterans Business, which shall be
administered by the assistant administrator appointed under
subsection (d)(2).
``(3) The Office of Small Business Development Centers,
which shall be administered by the assistant administrator
appointed under subsection (d)(3).
``(4) The Office of Investment, which shall be administered
by the assistant administrator appointed under subsection
(d)(4).
``(5) The Office of Lender Oversight, which shall be
administered by the assistant administrator appointed under
subsection (d)(5).
``(6) The Office of Congressional and Legislative Affairs,
which shall be administered by the assistant administrator
appointed under subsection (d)(6).
``(7) The Office of International Trade, which shall be
administered by the assistant administrator appointed under
subsection (d)(7).
``(8) The Office of Women's Business Ownership, which shall
be administered by the assistant administrator appointed under
subsection (d)(8).
``(d) Assistant Administrators.--The Administrator shall appoint
the following Assistant Administrators:
``(1) The Assistant Administrator for Minority Small
Business and Capital Ownership Development, who--
``(A) shall have a minimum of 5 years experience
within the Administration in assisting minority small
businesses before being appointed under this paragraph;
``(B) shall be responsible for carrying out
subsections (a), (b), and (c) of section 8;
``(C) shall be a career employee in the Senior
Executive Service; and
``(D) shall report to the Associate Administrator
for Government Contracting and Minority Small Business
Opportunities.
``(2) The Assistant Administrator for Veterans Business,
who--
``(A) shall have a minimum of 5 years experience
within the Administration or the Department of Veterans
Affairs (or in combination) in providing
entrepreneurial outreach to veterans before being
appointed under this paragraph;
``(B) shall be responsible for the formulation,
execution, and promotion of the policies and programs
of the Administration that provide assistance to small
business concerns owned and controlled by veterans and
small business concerns owned and controlled by
service-disabled veterans;
``(C) shall act as an ombudsman for full
consideration of veterans in all programs of the
Administration;
``(D) shall be a career employee and may be an
appointee in the Senior Executive Service; and
``(E) shall report to the Associate Administrator
for Enterprise Outreach and Training.
``(3) The Assistant Administrator for Small Business
Development Centers who--
``(A) shall have a minimum of 5 years experience in
entrepreneurial outreach to small businesses or as an
educator in a business program in an institution of
higher learning (or in combination), before being
appointed under this paragraph;
``(B) shall carry out section 21;
``(C) shall be a career employee and may be an
appointee in the Senior Executive Service; and
``(D) shall report to the Associate Administrator
for Enterprise Outreach and Training.
``(4) The Assistant Administrator for Investment who--
``(A) shall carry out title III of the Small
Business Investment Act of 1958;
``(B) shall be a career employee and may be an
appointee in the Senior Executive Service; and
``(C) shall report to the Associate Administrator
for Capital Access.
``(5) The Assistant Administrator for Lender Oversight
who--
``(A) shall have a minimum of 5 years experience in
oversight of lending institutions before being
appointed under this paragraph;
``(B) shall carry out section 7(a) and assist the
Administrator in carrying out section 23;
``(C) shall be a career employee and may be an
appointee in the Senior Executive Service; and
``(D) shall report to the Associate Administrator
for Capital Access.
``(6) The Assistant Administrator for Congressional and
Legislative Affairs who--
``(A) shall have a minimum of 5 years experience as
an employee reimbursed pursuant to the Senators' Clerk
Hire Allowance Account established under section 1 of
Public Law 100-137 (2 U.S.C. 58c) or the Members'
Representational Allowance established under section
101 of the House of Representatives Administrative
Reform Technical Corrections Act (2 U.S.C. 57b) or as
an employee of a committee of the House or Senate (or
in combination) before being appointed under this
paragraph; and
``(B) shall report directly to the Administrator.
``(7) The Assistant Administrator for International Trade
who--
``(A) shall have a minimum of 5 years experience in
international trade matters;
``(B) shall carry out section 22;
``(C) shall be a career employee and may be an
appointee in the Senior Executive Service; and
``(D) shall report to the Associate Administrator
for Enterprise Training and Outreach.
``(8) The Assistant Administrator for Women's Business
Ownership who--
``(A) shall carry out section 29;
``(B) may be an appointee in the Senior Executive
Service;
``(C) shall report to the Associate Administrator
for Enterprise Outreach and Training;
``(D) shall advise the Administrator on
appointments to the Women's Business Council;
``(E) serve as the vice chairperson of the
Interagency Committee on Women's Business Enterprise;
``(F) serve as liaison for the National Women's
Business Council; and
``(G) oversee the implementation of the program
established by section 8(m).
``(e) General Counsel.--The Administrator shall appoint a General
Counsel.
``(f) Regional Offices.--There are 10 regional offices each of
which shall be administered by a regional administrator. Such offices
shall have the same jurisdictions as the 10 Federal regions or such
regions as are created by statute or by regulation of the Administrator
of the General Services Administration.
``(g) District Offices.--
``(1) Establishment.--The Administrator may establish
district offices throughout the United States to provide
services under this Act and the Small Business Investment Act
of 1958.
``(2) Closure.--Except as provided in paragraph (3), the
Administrator may close or combine district offices as the
Administrator determines appropriate. The Administrator shall
report any such closures to Congress.
``(3) Minimum number.--Each State shall have at least one
district office, except that one district office may serve
Guam, American Samoa, and the Commonwealth of the Northern
Mariana Islands.
``(4) District directors.--
``(A) In general.--Each district office shall have
a director appointed by the Administrator whose salary
shall not exceed the rate in effect for step 10 of GS-
15 of the General Schedule. Each district director
shall assist the Administrator in carrying out the
programs established by this Act and the Small Business
Investment Act of 1958.
``(B) Appeal of decisions.--The Administrator shall
issue regulations providing procedures for the appeal
of any decision made by any district director. Such
regulations shall be codified in the Code of Federal
Regulations.
``(C) Review and removal.--The Administrator shall
remove and replace any district director if such
district director has failed, with respect to any year,
to meet goals developed by the Administrator for
increasing--
``(i) the number of loans made pursuant to
section 7 (other than section 7(b));
``(ii) the number of participants in the
programs established pursuant to section 8;
``(iii) the amount Federal Government
procurements from small business concerns or
from any subcategory of small business concern
referred to in section 15(g); or
``(iv) the amount of dollar financings for
small businesses under the Small Business
Investment Act of 1958.
``(D) Reassignment.--Any district director who is
removed under subparagraph (C) shall be reassigned by
the Administrator as a procurement center
representative or a commercial marketing
representative, as determined by the Administrator in
consultation with the regional administrator. Any such
reassignment shall, for the first year after
reassignment, be at the same grade and salary.
``(5) District counsel.--Each district office shall have a
district counsel. Each district counsel shall--
``(A) be assigned by, and report to, the General
Counsel;
``(B) provide legal assistance to the district
director and employees in the district office; and
``(C) carry out the required review of HUBZone
firms specified in section 3.
``(6) Business opportunity specialists.--Each district
office shall have a minimum number of business opportunity
specialists to ensure that effective guidance and oversight are
provided to participants in the program established by section
8(a). The specialists shall assist the district director and
Assistant Administrator for Minority Small Business and Capital
Ownership Development. The majority of the hours worked by the
business opportunity specialist shall be devoted to the
programs established by section 8(a), unless the district
director demonstrates to the Assistant Administrator for
Minority Small Business and Capital Ownership Development that
there are an insufficient number of firms certified pursuant to
section 8(a) to require the employee to devote such hours to
such programs.
``(7) Procurement center representatives.--The Associate
Administrator for Government Contracting and Minority Small
Business, after consultation with the regional administrators
and district directors, shall assign such procurement center
representatives to district offices as the Associate
Administrator determines to be appropriate. Any procurement
center representative assigned to a district office or
procuring agency activity shall report to the district
director. The Associate Administrator shall assign at least one
procurement center representative in each State.
``(8) Commercial marketing representative.--The Associate
Administrator for Government Contracting and Minority Small
Business, after consultation with the regional administrators
and district directors, shall assign commercial marketing
representatives to district offices as the Associate
Administrator determines to be appropriate. Any commercial
marketing representative assigned to a district office shall
report to the district director.
``(h) General Personnel Authority.--
``(1) Experts and consultants.--The Administrator may
procure, for purposes of carrying out this Act and the Small
Business Investment Act of 1958, temporary and intermittent
services under section 3109(b) of title 5, United States Code.
``(2) Travel expenses.--Each employee may, at the
discretion of the Administrator, receive travel expenses,
including per diem in lieu of subsistence, in accordance with
applicable provisions under subchapter I of chapter 57 of title
5, United States Code. Notwithstanding such subchapter, the
Administrator may pay the transportation expenses and per diem
in lieu of subsistence expenses, for travel of any person
employed by the Administration to render temporary services not
in excess of 6 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. The Administrator may
extend the 6-month limitation for an additional 6 months if the
Administrator determines the extension is necessary to continue
efficient disaster loan making activities.
``(3) Notary public expenses.--The Administrator may pay
the costs of any employee to qualify as a notary public.
``(4) Delegations.--Except as otherwise provided in this
Act or the Small Business Investment Act of 1958, the
Administrator may delegate a function or responsibility to any employee
of the Administration. The Administrator shall provide by regulation
codified in the Code of Federal Regulations the procedures for
determining which delegations are to be codified in the Code of Federal
Regulations. With respect to any delegations not promulgated by
regulation, the Administrator shall collect and collate such
delegations and place them in a prominent location on the website
maintained for the Administration.
``(5) Administration web site.--Not later than 30 days
after the enactment of this subsection, the Administrator shall
redesign the web site of the Administration so that the
delegations under paragraph (4) and the organizational chart of
the Administration (including the names of the officials
serving in those capacities), links to the homepage of each
office, and standard operating procedures, have a prominent
link on the homepage of the Administration. Any subsequent
redesign after compliance with this paragraph shall ensure that
the information required by this paragraph maintains a
prominent place on the homepage of the Administration.''.
(b) Conforming Amendments.--
(1) So much of section 22 of the Small Business Act (15
U.S.C. 649) as precedes subsection (b) is amended to read as
follows:

``SEC. 22. OFFICE OF INTERNATIONAL TRADE.

``(a) Except as otherwise provided in this section, the powers,
duties, and responsibilities described in this section shall be carried
out by the Assistant Administrator for International Trade.''.
(2) Subsection (b) of section 22 of the Small Business Act
(15 U.S.C. 649) is amended by striking ``The Office'' the first
place it appears and inserting ``The Office of International
Trade''.
(c) Related Repeal.--Section 32 of the Small Business Act (15
U.S.C. 657b) is amended to read as follows:

``SEC. 32. [RESERVED].''.

(d) Transition Rules.--
(1) Exception to salary limitation of district directors.--
The salary limitation specified in section 6(g)(4)(A) of the
Small Business Act (as amended by this section) shall not apply
with respect to any district director whose salary exceeds such
limitation on July 1, 2003.
(2) Removal and reassignment of deputy district
directors.--
(A) Removal.--The Administrator may not appoint any
individual to serve as a deputy district director. Any
individual serving as a deputy district director on the
date of the enactment of this Act shall be removed from
such position and reassigned as provided in this
paragraph.
(B) Reassignment.--Any individual removed from
office under subparagraph (A) shall be reassigned by
the Administrator as a procurement center
representative or a commercial marketing
representative, as determined by the Administrator in
consultation with the regional administrator. Any such
reassignment shall be at not less than the grade and
salary which applied to such individual prior to
reassignment.

SEC. 207. LOAN PROGRAMS.

(a) Small Business Loan Program.--So much of section 7 of the Small
Business Act (15 U.S.C. 636) as precedes subsection (b) is amended to
read as follows:

``SEC. 7. LOAN PROGRAMS.

``(a) Small Business Loan Program.--
``(1) Loan authority.--The Administrator may, to the extent
and in such amounts as provided in advance in appropriation
Acts, make loans for plant acquisition, construction,
conversion, or expansion, including the acquisition of land,
material, supplies, equipment, and working capital to any small
business concern, including those owned by qualified Indian
tribes for purposes of this Act.
``(2) Methods of participation.--The Administrator may make
such loans either directly or in cooperation with banks or
other financial institutions through agreements to participate
on an immediate or deferred (guaranteed) basis, except that no
immediate participation may be purchased unless it is shown
that a deferred participation is not available and no direct
financing may be made unless it is shown that a participation
is not available.
``(3) No credit elsewhere.--The Administrator may not make
a loan under this subsection if the applicant can obtain credit
elsewhere.
``(4) Criminal background check.--Before making any loan
under this subsection or section 502 or 503 of the Small
Business Investment Act of 1958, the Administrator may verify
the applicant's criminal background, or lack thereof, through
the best available means, including, if possible, use of the
National Crime Information Center computer system at the
Federal Bureau of Investigation.
``(5) Sound and secure requirement.--
``(A) In general.--Except as otherwise provided in
this paragraph, any loan made under this subsection
shall be of such sound value or so secured as
reasonably to assure repayment.
``(B) Special rules.--For purposes of subparagraph
(A), any reasonable doubt regarding the likelihood of
repayment shall be resolved in favor of the applicant
if the applicant is--
``(i) a disabled person (as defined in
paragraph (8)); or
``(ii) a small manufacturer.
``(C) Collateral.--The Administrator shall not
refuse to make a loan under this subsection solely due
to inadequate collateral, but a loan shall be secured
as fully as possible with available assets. If the
assets of the business are not sufficient to fully
secure the loan, other assets of the owners of the
small business concern may be taken as collateral to
the extent the aggregate amount of collateral does not
exceed the amount necessary to fully secure the loan.
``(6) Level of participation in guaranteed loans.--
``(A) In general.--Except as provided in
subparagraph (B), 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 Administrator shall
be equal to--
``(i) 75 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such balance
exceeds $150,000; or
``(ii) 85 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such balance is
less than or equal to $150,000.
``(B) Reduced participation upon request.--
``(i) In general.--The guarantee percentage
specified by subparagraph (A) for any loan
under this subsection may be reduced upon the
request of the participating lender.
``(ii) Prohibition.--The Administrator
shall not use the guarantee percentage
requested by a participating lender under
clause (i) as a criterion for establishing
priorities in approving loan guarantee requests
under this subsection.
``(C) Participation under export working capital
program.--Notwithstanding subparagraph (A), in an
agreement to participate in a loan on a deferred basis
under the Export Working Capital Program established
pursuant to paragraph (14), such participation by the
Administrator shall not exceed 90 percent.
``(D) Certain rural areas.--
``(i) In general.--In the case of a loan to
a qualified rural small business concern, this
paragraph shall be applied by substituting `90
percent' for--
``(I) `75 percent' in subparagraph
(A)(i); and
``(II) `85 percent' in subparagraph
(A)(ii).
``(ii) Qualified rural small business
concern.--For purposes of this subparagraph,
the term `qualified rural small business
concern' means a small business concern located
in--
``(I) a rural area (as defined in
section 343(a)(13) of the Consolidated
Farm and Rural Development Act (7
U.S.C. 1991(a))); and
``(II) a district with respect to
which the dollar value and number of
loans made under this subsection are
both less than the average for
districts in the State.
``(7) Maximum loan amounts.--No loan shall be made under
this subsection--
``(A) if the total amount outstanding and committed
(by participation or otherwise) solely for purposes of
this subsection to the borrower would exceed $1,000,000
(or if the gross loan amount would exceed $2,000,000),
except as provided in subparagraph (B);
``(B) if the total amount outstanding and committed
(on a deferred basis) solely for the purposes provided
in paragraph (16) to the borrower would exceed
$2,000,000 of which not more than $1,200,000 may be
used for working capital, supplies, or financings under
paragraph (14) for export purposes; and
``(C) if made either directly or in cooperation
with banks or other lending institutions through
agreements to participate on an immediate basis if the
amount would exceed $350,000.
``(8) Interest rates.--
``(A) Maximum rate set by administrator.--
Notwithstanding any State limitation on the rate or
amount of interest which may be charged, taken,
received, or reserved, the maximum legal rate of
interest on any financing made on a deferred basis
pursuant to this subsection shall not exceed a rate
prescribed by the Administrator.
``(B) Immediate and direct loans.--The rate of
interest for the Administrator's share of any direct or
immediate participation loan shall not exceed the
current average market yield on outstanding marketable
obligations of the United States with remaining periods
to maturity comparable to the average maturities of
such loans and adjusted to the nearest \1/8\ of 1
percent, and an additional amount as determined by the
Administrator, but not to exceed 1 percent per year.
``(C) Preferred lenders program.--The maximum
interest rate for a loan guaranteed under the Preferred
Lenders Program conducted pursuant to paragraph (31)
shall not exceed the maximum interest rate, as
determined by the Administrator, applicable to other
loans guaranteed under this subsection.
``(D) Disabled persons.--
``(i) In general.--The maximum interest
rate for a loan made under this subsection to a
disabled person for the establishment,
acquisition or operation of a small business
concern shall be 3 percent per year.
``(ii) Disabled person.--For the purposes
of this subparagraph, the term `disabled
person' means any individual who--
``(I) is a service-disabled
veteran; or
``(II) has a disability (as defined
in section 3 of the Americans with
Disabilities Act of 1990) which limits
such individual's selection of any type
of employment for which such individual
would otherwise be qualified or
qualifiable.
``(9) Prepayment charges.--
``(A) In general.--A borrower who prepays any loan
guaranteed under this subsection shall remit to the
Administrator a subsidy recoupment fee calculated in
accordance with subparagraph (B) if--
``(i) the loan is for a term of not less
than 15 years;
``(ii) the prepayment is voluntary;
``(iii) the amount of prepayment in any
calendar year is more than 25 percent of the
outstanding balance of the loan; and
``(iv) the prepayment is made within the
first 3 years after disbursement of the loan
proceeds.
``(B) Subsidy recoupment fee.--The subsidy
recoupment fee charged under subparagraph (A) shall
be--
``(i) 5 percent of the amount of
prepayment, if the borrower prepays during the
first year after disbursement;
``(ii) 3 percent of the amount of
prepayment, if the borrower prepays during the
second year after disbursement; and
``(iii) 1 percent of the amount of
prepayment, if the borrower prepays during the
third year after disbursement.
``(10) Maximum term.--No loans made under this subsection,
including renewals and extensions thereof, may be made for a
period or periods exceeding 25 years, except that such portion
of a loan made for the purpose of acquiring real property or
constructing, converting, or expanding facilities may have a
maturity of 25 years plus such additional period as is
estimated may be required to complete such construction,
conversion, or expansion.
``(11) Construction and rehabilitation of real property.--
The Administrator may make a loan under this subsection to
finance residential or commercial construction or
rehabilitation for sale if such loan is not used primarily for
the acquisition of land.
``(12) Unemployed and low-income individuals.--The
Administrator may make loans under this subsection to any small
business concern, or to any qualified person seeking to
establish such a concern, if the Administrator determines that
such loan will further the policies established in section 2,
with particular emphasis on the preservation or establishment
of small business concerns located in urban or rural areas with
high proportions of unemployed or low-income individuals or
owned by low-income individuals.
``(13) State and local development companies.--The
Administrator may make loans under this subsection to State and
local development companies for the purposes of, and subject to
the restrictions in, title V of the Small Business Investment
Act of 1958.
``(14) Export working capital program.--
``(A) In general.--The Administrator may provide
extensions of credit, standby letters of credit,
revolving lines of credit for export purposes, and
other financing to enable small business concerns,
including small business export trading companies and
small business export management companies, to develop
foreign markets.
``(B) Interest rates.--A bank or participating
lending institution may establish the rate of interest
on such financings as may be legal and reasonable.
``(C) Criteria for loans.--When considering loan or
guarantee applications, the Administrator 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 small manufacturers and agricultural
concerns, in the export market.
``(D) Marketing.--The Administrator shall
aggressively market its export financing program to
small businesses.
``(15) Qualified employee trusts.--
``(A) Loan guarantees.--The Administrator 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 percent of the stock
of the concern. A qualified employee trust shall be
eligible for any loan guarantee under this subsection
with respect to a small business concern on the same
basis as if such trust were the same legal entity as
such concern.
``(B) Approval of plan.--The plan requiring the
Administrator's approval under subparagraph (A) shall
be submitted to the Administrator 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 concern and which provides that--
``(i) not later than the date the loan
guaranteed under subparagraph (A) is repaid (or
as soon thereafter as is consistent with the
requirements of section 401(a) of the Internal
Revenue Code of 1986, at least 51 percent of
the total stock of such concern shall be
allocated to the accounts of at least 51
percent of the employees of such concern who
are entitled to share in such allocation;
``(ii) there will be periodic reviews of
the role in the management of such concern of
employees to whose accounts stock is allocated;
and
``(iii) there will be adequate management
to assure management expertise and continuity.
``(C) Certain characteristics of employee-owners
disregarded.--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 that the business experience of employee-owners who
assume managerial responsibilities may be considered.
``(D) Certain corporations treated as small
business concerns.--For purposes of this paragraph, a
corporation which is controlled by any other person
shall be treated as a small business concern if such
corporation would, after the plan described in
subparagraph (B) is carried out, be treated as a small
business concern.
``(16) International trade.--
``(A) In general.--If the Administrator determines
that a loan guaranteed under this subsection will allow
an eligible small business concern in an industry
engaged in or adversely affected by international trade
to improve its competitive position, the Administrator
may make such loan to assist such concern in--
``(i) 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; or
``(ii) the refinancing of existing
indebtedness which is not structured with
reasonable terms and conditions.
``(B) Security.--Each loan made under this
paragraph shall be secured by a first lien position or
first mortgage on the property or equipment financed by
the loan or on other assets of the concern.
``(C) Engaged in or adversely affected by
international trade.--For purposes of this paragraph, a
small business concern shall be considered to be
engaged in or adversely affected by international trade
if such concern is determined by the Administrator
(under regulations prescribed by the Administrator to
be--
``(i) in a position to significantly expand
existing export markets or develop new export
markets; or
``(ii) adversely affected by import
competition in that it--
``(I) is confronting increased
direct competition with foreign firms
in the relevant market; and
``(II) can demonstrate injury
attributable to such competition.
``(D) Findings by international trade commission.--
For purposes of subparagraph (C)(ii)(II), the
Administrator shall accept any finding of injury by the
International Trade Commission.
``(17) Authorized lending institutions.--The Administrator
shall authorize lending institutions and other entities in
addition to banks to make loans authorized under this
subsection.
``(18) Guarantee fees.--
``(A) In general.--With respect to each loan
guaranteed under this subsection (other than a loan
that is repayable in 1 year or less), the
Administration shall collect a guarantee fee, which
shall be payable by the participating lender, but which
may be collected in advance by the lender from the
borrower, as follows:
``(i) A guarantee fee equal to 1 percent of
the deferred participation share of a total
loan amount that is not more than $150,000.
``(ii) A guarantee fee equal to 2.5 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 equal to 3.5
percent of the deferred participation share of
a total loan amount that is more than $700,000.
``(B) Retention of certain fees.--Lenders
participating in the programs established under this
subsection may retain not more than 25 percent of a fee
collected under subparagraph (A)(i).
``(19) Certified lenders program.--
``(A) In general.-- There is a Certified Lenders
Program for lenders who establish their knowledge of
laws and regulations concerning the guaranteed loan
program and their proficiency in program requirements
as set forth in regulations codified in the Code of
Federal Regulations.
``(B) Suspension and revocation of designation.--
The designation of a lender as a certified lender shall
be suspended or revoked at any time that the
Administrator determines that the lender is not
adhering to established rules and regulations or that
the loss experience of the lender is excessive as
compared to other lenders, but such suspension or
revocation shall not affect any outstanding guarantee.
``(C) Authority to liquidate loans.--
``(i) In general.--The Administrator may
permit lenders participating in the Certified
Lenders Program to liquidate loans made with a
guarantee from the Administrator pursuant to a
liquidation plan approved by the Administrator.
``(ii) Automatic approval.--If the
Administrator does not approve or deny a
request for approval of a liquidation plan
within 10 business days of the date on which
the request is made (or with respect to any
routine liquidation activity under such a plan,
within 5 business days) such request shall be
deemed to be approved.
``(20) Minority business development program
participants.--
``(A) In general.--The Administrator may make loans
either directly or in cooperation with banks or other
financial institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis to small business concerns eligible for
assistance under section 8(a). Such assistance may be
provided only if the Administrator determines that--
``(i) the type and amount of such
assistance requested by such concern is not
otherwise available on reasonable terms from
other sources;
``(ii) with such assistance such concern
has a reasonable prospect for operating soundly
and profitably within a reasonable period of
time;
``(iii) the proceeds of such assistance
will be used within a reasonable time for plant
construction, conversion, or expansion,
including the acquisition of equipment,
facilities, machinery, supplies, or material or
to supply such concern with working capital to
be used in the manufacture of articles,
equipment, supplies, or material for defense or
civilian production or as may be necessary to
insure a well-balanced national economy; and
``(iv) such assistance is of such sound
value as reasonably to assure that the terms
under which it is provided will not be breached
by the small business concern.
``(B) Maximum amount of loans.--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.
``(C) Minimum participation.--Subject to the
limitation of subparagraph (B), in agreements to
participate in loans on a deferred (guaranteed) basis,
participation by the Administrator shall be not less
than 85 percent of the balance of the financing
outstanding at the time of disbursement.
``(D) Interest rate.--The rate of interest on
financings made on a deferred (guaranteed) basis shall
be legal and reasonable.
``(E) Methods of participation.--No immediate
participation may be purchased under this paragraph
unless it is shown that a deferred participation is not
available. No direct financing may be made under this
paragraph unless it is shown that a participation is
unavailable. A direct loan or the Administrator's share
of an immediate participation loan made pursuant to
this paragraph shall be any secured debt instrument--
``(i) that is subordinated by its terms to
all other borrowings of the issuer;
``(ii) the rate of interest on which shall
not exceed the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to
maturity comparable to the average maturities
of such loan and adjusted to the nearest \1/8\
of 1 percent;
``(iii) the term of which is not more than
25 years;
``(iv) the principal on which is amortized
at such rate as may be deemed appropriate by
the Administrator; and
``(v) the interest on which is payable not
less often than annually.
``(21) Closure of dod installations.--
``(A) In general.--The Administrator may make loans
on a guaranteed basis under the authority of this
subsection--
``(i) to a small business concern that has
been (or can reasonably be expected to be)
detrimentally affected by--
``(I) the closure (or substantial
reduction) of a Department of Defense
installation; or
``(II) the termination (or
substantial reduction) of a Department
of Defense program on which such small
business was a prime contractor or
subcontractor (or supplier) at any
tier; or
``(ii) to a qualified individual or a
veteran seeking to establish (or acquire) and
operate a small business concern.
``(B) Reasonable doubt given to applicant.--
Recognizing that greater risk may be associated with a
loan to a small business concern described in
subparagraph (A)(i), any reasonable doubts concerning
the firm's proposed business plan for transition to
nondefense-related markets shall be resolved in favor
of the loan applicant when making any determination
regarding the sound value of the proposed loan in
accordance with paragraph (5).
``(C) Authorization.--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) Qualified individual.--For purposes of this
paragraph a qualified individual is--
``(i) a member of the Armed Forces of the
United States, honorably discharged from active
duty involuntarily or pursuant to a program
providing bonuses or other inducements to
encourage voluntary separation or early
retirement;
``(ii) a civilian employee of the
Department of Defense involuntarily separated
from Federal service or retired pursuant to a
program offering inducements to encourage early
retirement; or
``(iii) an employee of a prime contractor,
subcontractor, or supplier at any tier of a
Department of Defense program whose employment
is involuntarily terminated (or voluntarily
terminated pursuant to a program offering
inducements to encourage voluntary separation
or early retirement) due to the termination (or
substantial reduction) of a Department of
Defense program.
``(E) Job creation and community benefit.--In
providing assistance under this paragraph, the
Administrator shall develop procedures to ensure, to
the maximum extent practicable, that such assistance is
used for projects that--
``(i) have the greatest potential for--
``(I) creating new jobs for
individuals whose employment is
involuntarily terminated due to
reductions in Federal defense
expenditures; or
``(II) preventing the loss of jobs
by employees of small business concerns
described in subparagraph (A)(i); and
``(ii) have substantial potential for
stimulating new economic activity in
communities most affected by reductions in
Federal defense expenditures.
``(22) Late fees.--The Administrator may permit
participating lenders to impose and collect a reasonable
penalty fee on late payments of loans guaranteed under this
subsection in an amount not to exceed 5 percent of the monthly
loan payment per month plus interest.
``(23) Annual fee.--
``(A) In general.--With respect to each loan
guaranteed under this subsection, the Administrator
shall, in accordance with such terms and procedures as
the Administrator shall establish by regulation, assess
and collect an annual fee in an amount equal to 0.5
percent of the outstanding balance of the deferred
participation share of the loan. With respect to loans
approved during the 2-year period beginning on October
1, 2002, the annual fee assessed and collected under
the preceding sentence shall be in an amount equal to
0.25 percent of the outstanding balance of the deferred
participation share of the loan.
``(B) Payer.--The annual fee assessed under
subparagraph (A) shall be payable by the participating
lender and shall not be charged to the borrower.
``(C) Agents.--The Administrator may contract with
any agent to carry out, on behalf of the Administrator,
the assessment and collection of annual fees referred
to in subparagraph (A). Such agent may receive as
compensation for services any interest earned on the
fees while in such agent's control and prior to the
time when the agent, pursuant to contract, is required
to remit the fees to the Administrator.
``(24) Notification requirement.--The Administrator shall
notify the Committee on Small Business of the House of
Representatives and the Committee on Small Business and
Entrepreneurship of the Senate not later than 15 days before
making any significant policy or administrative change
affecting the operation of the loan program under this
subsection, including the establishment of any pilot project
pursuant to paragraph (25).
``(25) Limitation on conducting pilot projects.--
``(A) Limitation on number.--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 January 1, 1994.
``(B) Dollar limitations.--
``(i) In general.--In the case of any pilot
program established on or after the date of the
enactment of this subparagraph, no loan shall
be made under such program if such loan would result in the total
amount of loans made during the fiscal year under all such programs to
be in excess of 5 percent of the total amount of loans guaranteed in
such fiscal year under this subsection.
``(ii) Certain pre-existing programs.--In
the case of any pilot program established
before the date of the enactment of this
subparagraph, no loan shall be made under such
program if such loan would result in the total
amount of loans made during the fiscal year
under all such programs to be in excess of 15
percent of the total amount of loans guaranteed
in such fiscal year under this subsection.
``(C) Maximum term.--The duration of any pilot
program authorized by this paragraph shall not exceed 3
years. For purposes of this subparagraph, a pilot
program shall not be treated as a new pilot program
solely on the basis of a modification or change in a
pilot program, including the change of its name. With
respect to any pilot program in existence on the date
of the enactment of this subparagraph, this
subparagraph shall apply without regard to any period
ending before such date.
``(D) Regulations.--With respect to each pilot
program under this subsection, the Administrator
shall--
``(i) promulgate regulations for such
program pursuant to section 553(b) of title 5,
United States Code;
``(ii) provide not less than 60 days for
notice and comment on such regulations; and
``(iii) ensure that such regulations are
codified in the Code of Federal Regulations.
In the case of any pilot program established after the
date of the enactment of this subparagraph, such
program shall not go into effect until after the
requirements of this subparagraph are satisfied.
``(E) Pilot program.--For purposes of this
paragraph, the term `pilot program' means any lending
program initiative, project, innovation, or other
activity not specifically authorized by law.
``(26) Calculation of subsidy rate.--All fees, interest,
and profits received and retained by the Administrator 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 Administrator of purchasing
and guaranteeing loans under this Act.
``(27) Low documentation loan program.--
``(A) In general.--The Administrator may issue
guarantees under this subsection for loans of $150,000
or less with less documentation than would otherwise be
required by the Administrator under this subsection.
``(B) Regulations.--Not later than 120 days after
the date of the enactment of this paragraph, the
Administrator shall promulgate regulations to carry out
the provisions of this paragraph after the opportunity
for notice and comment pursuant to section 553(b) of
title 5, United States Code. Such regulations shall be
codified in the Code of Federal Regulations.
``(28) Leasing.--In addition to such other lease
arrangements as may be authorized by the Administrator, a
borrower may permanently lease to one or more tenants not more
than 20 percent of any property constructed with the proceeds
of a loan guaranteed under this subsection, if the borrower
permanently occupies and uses not less than 60 percent of the
total business space in the property.
``(29) Real estate appraisals.--With respect to a loan
under this subsection that is secured by commercial real
property, an appraisal of such property by a State licensed or
certified appraiser--
``(A) shall be required by the Administrator in
connection with any such loan for more than $250,000;
or
``(B) may be required by the Administrator or the
lender in connection with any such loan for $250,000 or
less, 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
applies for assistance under any credit program under this Act
shall be determined without regard to any ownership interest of
a spouse arising solely from the application of the community
property laws of a State for purposes of determining marital
interests.
``(31) Preferred lenders program.--
``(A) In general.--There is a Preferred Lenders
Program.
``(B) Participation.--The Administrator may
designate a preferred lender under this paragraph only
if the lender demonstrates knowledge of the Small
Business Act and the regulations promulgated thereunder
and establishes to the satisfaction of the
Administrator that it--
``(i) has the ability to process, close,
service, and liquidate loans;
``(ii) has the ability to develop and
analyze complete loan packages; and
``(iii) has a satisfactory performance
history of participation in the lending program
established under this subsection as
demonstrated by a default rate that does not
exceed--
``(I) the national average; or
``(II) in the case any lender which
made at least 20 percent of its loans
in Alaska, Hawaii, State-designated
enterprise zones, enterprise zones,
empowerment zones, enterprise
communities, or labor surplus areas as
determined by the Department of Labor,
or to small manufacturers, the national
average plus 2 percentage points.
``(C) Delegated authority.--With respect to loans
made under this subsection, preferred lenders shall,
without prior approval of the Administrator:
``(i) Determine creditworthiness and
eligibility.
``(ii) Make and close loans with a
guarantee from the Administrator.
``(iii) Monitor loan performance.
``(iv) Service and collect the loans.
``(v) Foreclose and liquidate loans.
``(D) Prohibited activities.--A preferred lender
shall not take any action that creates an actual or
apparent conflict of interest or places the Federal
Government's guarantee at significant risk beyond the
risk associated with loan nonperformance.
``(E) Area of operations.--The designation by the
Administrator of a lender to participate in the program
established pursuant to this paragraph shall authorize
the activities described in subparagraph (C) only with
respect to small business concerns located in areas
served by such office or offices as the Administrator
designates with respect to such lender.
``(F) Designation as national preferred lenders.--
The Administrator, upon application, may designate a
preferred lender as a national preferred lender. A
national preferred lender may conduct the activities
described in subparagraph (C) with respect to each area
served by an office of the Administrator. The
Administrator shall not grant such designation unless
the applicant demonstrates--
``(i) operation as a preferred lender in at
least 5 States or within the territory served
by at least 10 offices of the Administrator for
a period of not less than 3 years;
``(ii) issuance of a minimum of 50 loans
per year as a preferred lender;
``(iii) centralization of approval, loan
servicing and liquidation functions that meet
such standards as the Administrator may
establish by regulations, which are promulgated
after notice and the opportunity for public
comment not later than 180 days after the date
of the enactment of this clause;
``(iv) maintenance of uniform written
policies and procedures on the issuance of
loans guaranteed under this subsection;
``(v) maintenance of a portfolio of loans
guaranteed under this subsection that do not
exceed the national average default, currency,
and recovery rates for preferred lenders; and
``(vi) receipt of a substantially
satisfactory compliance review rating from the
Administrator in its most recent audit and
examination as a preferred lender and a small
business lending company, if applicable, or has
received a substantially satisfactory rating as
a result of a follow-up review.
``(G) Corrective action.--If a national preferred
lender is deficient with respect to any requirement
described in subparagraph (F), the Administrator shall
notify such lender in writing and shall provide the
lender a reasonable period of time to conform to such
requirements before taking any corrective action.
``(H) Suspension or revocation.--The Administrator
may, depending upon the severity of the failure to
comply with the standards set forth in this paragraph,
suspend or revoke a lender's status as a preferred
lender or a national preferred lender. Any such
suspension or revocation shall not affect any
outstanding guarantee.
``(I) Limitation on delegation.--No authority under
this paragraph may be delegated to any employee of the
Administration who is based in a regional or district
office.
``(32) Simplified form for small guarantees.--The
Administrator shall develop and allow participating lenders to
solely utilize a uniform and simplified loan form for loans of
$50,000 or less in guarantees to eligible applicants.
``(33) Special rule on affiliation.--A business concern
applying for assistance under this subsection shall be
considered small for purposes of this subsection without regard
to affiliation with another business concern if the applicant
has no legal recourse to have its affiliate repay any of its
debt obligations.''.
(b) Disaster Loan Program.--Subsection (b) of section 7 of the
Small Business Act (15 U.S.C. 636) is amended to read as follows:
``(b) Disaster Loan Program.--
``(1) Physical loss disaster loans.--
``(A) Loan authority.--Except as to agricultural
enterprises, the Administrator may, to the extent and
in such amounts as provided in advance in appropriation
Acts, make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administrator may
determine to be necessary or appropriate to repair,
rehabilitate or replace property, real or personal,
damaged or destroyed by or as a result of natural or
other disasters.
``(B) Loan amount.--The amount of any loan made
under this paragraph shall be equal to 100 percent of
the loss except that the amount of the loan shall be
reduced by--
``(i) any amount covered by insurance or
otherwise; or
``(ii) in the case of a loan used to
refinance a mortgage or other lien, any amount
covered by insurance or otherwise.
``(C) Special rules.--The Administrator shall not--
``(i) reduce the loan amount on real estate
to below $100,000 unless the amount of loss
calculated under subparagraph (B) is less than
$100,000;
``(ii) reduce the loan amount on personal
property, whether held by a homeowner or
lessee, to below $20,000, unless the amount of
the loss calculated under subparagraph (B) is
less than $20,000;
``(iii) take into account for purposes of
subparagraph (B) any sums made available for
refinancing pursuant to subparagraph (D); or
``(iv) require collateral for loans of
$10,000 or less.
``(D) Refinancings.--Such loans may be used to
refinance any mortgage or other lien against a totally
destroyed or substantially damaged home or business
concern except that the Administrator shall not make
any loan or guarantee under this paragraph unless the
Administrator finds--
``(i) the applicant is not able to obtain
credit elsewhere;
``(ii) such property is to be repaired,
rehabilitated, or replaced; and
``(iii) the amount refinanced shall not
exceed the amount of physical loss sustained.
``(E) Increase for mitigating measures.--The
Administrator may increase the amount of any loan under
this subsection by up to an additional 20 percent if he
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 construction of retaining walls and
sea walls, grading and contouring land, relocating
utilities and modifying structures.
``(2) Economic injury disaster loans.--
``(A) Loan authority.--Except as to agricultural
enterprises (other than small agricultural
cooperatives), the Administrator may, to the extent and
in such amounts as provided in advance in appropriation
Acts, make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis as the Administrator may
determine to be necessary or appropriate to any small
business concern or small agricultural cooperative
located in an area affected by a disaster (which shall
include all of the county in which the disaster
occurred and counties contiguous to the county of the
disaster as determined by the President or
Administrator), if the Administrator determines that
the concern or the cooperative has suffered a
substantial economic injury as a result of such
disaster and if such disaster constitutes--
``(i) a major disaster, as determined by
the President under the Disaster Relief and
Emergency Assistance Act; or
``(ii) a natural disaster, as determined by
the Secretary of Agriculture pursuant to the
Consolidated Farmers Home Administration Act of
1961 (7 U.S.C. 1961); or
``(iii) a disaster, as determined by the
Administrator.
``(B) State certification.--If no disaster
declaration has been issued under subparagraph (A), the
Governor of a State in which a disaster has occurred
may certify to the Administrator that small business
concerns or small agricultural cooperatives have
suffered economic injury as a result of such disaster
and are in need of financial assistance which is not
available on reasonable terms in the disaster stricken
area. Upon receipt of such certification, the
Administrator may then make such loans as would have
been available under this paragraph if a disaster
declaration had been issued.
``(C) Unable to obtain credit elsewhere.--No loan
or guarantee shall be extended pursuant to this
paragraph unless the Administrator finds that the
applicant is not able to obtain credit elsewhere.
``(3) Essential employees called to active duty.--
``(A) Definitions.--For purposes of this paragraph:
``(i) Essential employee.--The term
`essential employee' means an individual who is
employed by a small business concern and whose
managerial or technical expertise is critical
to the successful day-to-day operations of that
small business concern.
``(ii) Period of military conflict.--The
term `period of military conflict' has the
meaning given the term in subsection (n)(1).
``(iii) Substantial economic injury.--The
term `substantial economic injury' means an
economic harm to a business concern that
results in the inability of the business
concern--
``(I) to meet its obligations as
they mature;
``(II) to pay its ordinary and
necessary operating expenses; or
``(III) to market, produce, or
provide a product or service ordinarily
marketed, produced, or provided by the
business concern.
``(B) Loan authority.--The Administrator may make
such disaster loans (either directly or in cooperation
with banks or other lending institutions through
agreements to participate on an immediate or deferred
basis) to assist a small business concern that has
suffered or that is likely to suffer substantial
economic injury as the result of an essential employee
of such small business concern being ordered to active
military duty during a period of military conflict.
``(C) Period of eligibility.--A small business
concern described in subparagraph (B) shall be eligible
to apply for assistance under this paragraph during the
period beginning on the date on which the essential
employee is ordered to active duty and ending on the
date that is 90 days after the date on which such
essential employee is discharged or released from
active duty.
``(D) Interest rate.--Any loan or guarantee
extended pursuant to this paragraph shall be made at
the same interest rate as economic injury disaster
loans under paragraph (2).
``(E) Maximum loan amount.--No loan may be made
under this paragraph, either directly or in cooperation
with banks or other lending institutions through
agreements to participate on an immediate or deferred
basis, if the total amount outstanding and committed to
the borrower under this subsection would exceed
$1,500,000, unless the applicant can establish pursuant
to regulations promulgated by the Administrator
pursuant to paragraph (9) that this maximum should be
waived.
``(F) No disaster declaration required.--For
purposes of assistance under this paragraph, no
declaration of a disaster area shall be required.
``(4) Special rule to determine small concerns.--For
purposes of this subsection, a business concern and an
agricultural cooperative are considered small if the business
concern or agricultural cooperative has 500 or fewer employees.
``(5) Maximum term.--Except as provided in paragraph (6),
no loan under this subsection, including renewals and
extensions thereof, may be made for a period or periods
exceeding 30 years. No loan described in paragraph (11)(D)(iii)
shall be made for a period or periods exceeding 3 years.
``(6) Suspension of payments.--
``(A) In general.--The Administrator may consent to
a suspension in the payment of principal and interest
charges on, and to an extension in the maturity of, the
Federal share of any loan under this subsection for a
period of not to exceed 5 years, if--
``(i) the borrower under such loan is a
homeowner or a small business concern;
``(ii) the loan was made to enable--
``(I) such homeowner to repair or
replace his home; or
``(II) such concern to repair or
replace plant or equipment which was
damaged or destroyed as the result of a
disaster described in clause (i) or
(ii) of paragraph (2)(A); and
``(iii) the Administrator determines such
action is necessary to avoid severe financial
hardship.
``(B) Purchase of non-federal share.--During any
period in which principal and interest charges are
suspended on the Federal share of any loan under this
paragraph, the Administrator shall, upon the request of
any person, firm, or corporation having a participation
in such loan, purchase such participation, or assume
the obligation of the borrower, for the balance of such
period, to make principal and interest payments on the
non-Federal share of such loan. No such payments shall
be made by the Administrator in behalf of any borrower
unless--
``(i) the Administrator determines that
such action is necessary in order to avoid a
default; and
``(ii) the borrower agrees to make payments
to the Administration in an aggregate amount
equal to the amount paid in its behalf by the
Administrator, in such manner and at such times
(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
clause.
``(7) Additional disaster areas.--The Administrator shall
promulgate regulations for determining under what circumstances
loans can be made under paragraph (2)(A) in counties beyond the
counties designated pursuant to clause (i), (ii), or (iii) of
paragraph (2)(A).
``(8) Civil penalty for misuse of loan.--Whoever wrongfully
misapplies the proceeds of a loan obtained under this
subsection shall be civilly liable to the Administrator in an
amount equal to 150 percent of the original principal amount of the
loan.
``(9) Maximum loan amount.--The Administrator shall
establish by regulation the maximum amount of indebtedness
which may be committed to any borrower under this subsection.
Such regulation shall be codified in the Code of Federal
Regulations and shall specify the conditions under which the
Administrator shall waive any such maximum based on the need to
speed economic recovery of the region.
``(10) Maximum guaranteed participation.--In agreements to
participate in loans on a deferred basis under this subsection,
such participation by the Administrator shall not be in excess
of 90 percent of the balance of the loan outstanding at the
time of disbursement.
``(11) Interest rate.--The interest rate on the Federal
share of any loan made under paragraph (1) or (2) shall not
exceed the rate of interest which is in effect at the time of
the occurrence of the disaster but shall otherwise be--
``(A) in the case of a homeowner unable to secure
credit elsewhere, the rate prescribed by the
Administration but not more than \1/2\ the rate
determined by the Secretary of the Treasury taking into
consideration the current average market yield on
outstanding marketable obligations of the United States
with remaining periods to maturity comparable to the
average maturities of such loan plus an additional
charge of not to exceed 1 percent per year as
determined by the Administrator, and adjusted to the
nearest \1/8\ of 1 percent, but not to exceed 4 percent
per year;
``(B) in the case of a homeowner able to secure
credit elsewhere, the rate prescribed by the
Administration but not more than the rate determined by
the Secretary of the Treasury taking into consideration
the current average market yield on outstanding
marketable obligations of the United States with
remaining periods to maturity comparable to the average
maturities of such loans plus an additional charge of
not to exceed 1 percent per year as determined by the
Administrator, and adjusted to the nearest \1/8\ of 1
percent, but not to exceed 8 percent per year;
``(C) in the case of a business or other concern,
including agricultural cooperatives, unable to obtain
credit elsewhere, not to exceed 4 percent per year; or
``(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by the
Administration but not to excess of the lowest of--
``(i) the rate prevailing in the private
market for similar loans,
``(ii) the rate prescribed by the
Administration as the maximum interest rate for
deferred participation (guaranteed) loans under
subsection (a), or
``(iii) 8 percent per year.
``(12) Notice to borrowers.--
``(A) In general.--The Administrator shall ensure
that each borrower under this subsection receives a
notice described in subparagraph (B) upon applying for
any loan under this subsection and upon the
disbursement of any loan under this subsection.
``(B) Contents of notice.--A notice is described in
this subparagraph if such notice includes the following
information with respect to loans made under this
subsection:
``(i) A description of the collection
practices of the Administration for such loans,
including a description of any actions the
Administrator may take to collect a delinquent
or non-current loan.
``(ii) A description of the practices of
the Administration with respect to selling the
rights and interests of the Administration in
such loans, including a description of the
effects of such a sale on the borrower.
``(iii) A description of the rights of the
borrower with respect to such loan under
applicable Federal laws.
``(iv) A telephone number for contacting
the Administrator regarding such loan.''.
(c) Extension or Renewal.--Subsection (c) of section 7 of the Small
Business Act (15 U.S.C. 636) is amended to read as follows:
``(c) Extension or Renewal.--
``(1) In general.--The Administrator may further extend the
maturity of or renew any loan made pursuant to this section for
additional periods not to exceed 10 years beyond the period
stated therein, if such extension or renewal will aid in the
orderly liquidation of such loan.
``(2) Limitation.--No loan made under subsection (b) shall
be extended under this subsection if the loan has a maturity in
excess of 20 years.''.
(d) Microloan Program.--Subsection (m) of section 7 of the Small
Business Act (15 U.S.C. 636) is amended to read as follows:
``(m) Microloan Program.--
``(1) Purposes.--The purposes of the Microloan Program
are--
``(A) to assist women, low-income, veteran, and
minority entrepreneurs and business owners, small
manufacturers, and other individuals possessing the
capability to operate successful business concerns;
``(B) to assist small business concerns in those
areas suffering from a lack of credit due to economic
downturns;
``(C) to establish a microloan program to be
administered by the Administrator--
``(i) to make loans to eligible
intermediaries to enable such intermediaries to
provide small-scale loans, particularly loans
in amounts averaging not more than $10,000, to
startup, newly established, or growing small
business concerns for working capital or the
acquisition of materials, supplies, or equipment;
``(ii) to make grants to eligible
intermediaries that, together with non-Federal
matching funds, will enable such intermediaries
to provide intensive marketing, management, and
technical assistance to microloan borrowers;
``(iii) to make grants to eligible
nonprofit entities that, together with non-
Federal matching funds, will enable such
entities to provide intensive marketing,
management, and technical assistance to assist
low-income entrepreneurs and other low-income
individuals obtain private sector financing for
their businesses, with or without loan
guarantees;
``(iv) to report to the Committee on Small
Business and Entrepreneurship of the Senate and
the Committee on Small Business of the House of
Representatives on the effectiveness of the
microloan program and the advisability and
feasibility of implementing such a program
nationwide; and
``(v) to establish a welfare-to-
entrepreneurship microloan initiative, which
shall be administered by the Administrator, in
order to test the feasibility of supplementing
the technical assistance grants provided under
this subsection to individuals who are
receiving assistance under the State program
funded under part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.), or under
any comparable State funded means tested
program of assistance for low-income
individuals, in order to adequately assist
those individuals in establishing small
businesses and eliminating their dependence on
that assistance.
``(2) Establishment.--There is a Microloan Program, under
which the Administrator may, consistent with the requirements
of this subsection--
``(A) make direct loans to eligible intermediaries
for the purpose of making short-term, fixed interest
rate microloans to startup, newly established, and
growing small business concerns;
``(B) in conjunction with such loans make grants to
such intermediaries for the purpose of providing
intensive marketing, management, and technical
assistance to small business concerns that are
borrowers under this subsection; and
``(C) make grants to nonprofit entities for the
purpose of providing marketing, management, and
technical assistance to low-income individuals seeking
to start or enlarge their own businesses, if such
assistance includes working with the grant recipient to
secure loans in amounts not to exceed $50,000 from
private sector lending institutions, with or without a
loan guarantee from the nonprofit entity.
``(3) Eligibility for participation.--An intermediary shall
be eligible to receive loans and grants under subparagraphs (B)
and (C) of paragraph (2) if it 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 or equivalent
experience, as determined by the Administrator provided that
the equivalent experience evidences the capability of the
intermediary to assist microloan borrowers.
``(4) Intermediary applications.--As part of its
application for a loan, each intermediary shall submit a
description to the Administrator of--
``(A) the type of businesses to be assisted;
``(B) the size and range of loans to be made;
``(C) the geographic area to be served and its
economic, poverty, and unemployment characteristics;
``(D) the status of small business concerns in the
area to be served and an analysis of their credit and
technical assistance needs;
``(E) any marketing, management, and technical
assistance to be provided in connection with a loan
made under this subsection;
``(F) the local economic credit markets, including
the costs associated with obtaining credit locally;
``(G) the qualifications of the applicant to carry
out the purpose of this subsection; and
``(H) any plan to involve other technical
assistance providers (such as volunteers recruited
under section 12(b) or counselors from small business
development centers) or private sector lenders in
assisting selected business concerns.
``(5) Selection of intermediaries.--In selecting
intermediaries to participate in the program established under
this subsection, the Administrator shall give priority to those
applicants that provide loans in amounts averaging not more
than $10,000 and to those applicants that primarily serve small
manufacturers.
``(6) Intermediary contribution.--As a condition of any
loan made to an intermediary under this subsection, the
Administrator shall require the intermediary to contribute not
less than 15 percent of the loan amount in cash from non-
Federal sources.
``(7) Loans to intermediaries.--
``(A) Loan limits.--No loan shall be made under
this subsection if the total amount outstanding and
committed to one intermediary (excluding outstanding
grants) from the business loan and investment fund
established by this Act would, as a result of such
loan, exceed $750,000 in the first year of such
intermediary's participation in the program, and
$3,500,000 in the remaining years of the intermediary's
participation in the program.
``(B) Loan duration.--Loans made by the
Administrator under this subsection shall be for a term
of 10 years.
``(C) Delayed payments.--The Administrator 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.
``(D) Fees; collateral.--Except as otherwise
provided in this subsection, the Administrator shall
not charge any fees or require collateral other than an
assignment of the notes receivable of the microloans
with respect to any loan made to an intermediary under
this subsection.
``(E) Interest rates.--
``(i) In general.--Loans made by the
Administrator under this subsection to an
intermediary shall bear an interest rate equal
to 1.25 percentage points below the rate
determined by the Secretary of the Treasury for
obligations of the United States with a period
of maturity of 5 years, adjusted to the nearest
\1/8\ of 1 percent.
``(ii) Certain small loans.--
Notwithstanding clause (i), loans made by the
Administrator to an intermediary that makes
loans to small business concerns and
entrepreneurs averaging not more than $10,000,
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 \1/8\ of 1
percent.
``(iii) Multiple sites or offices.--Clause
(ii) shall apply to each separate loan-making
site or office of an intermediary only if such
site or office meets the requirements of that
clause.
``(iv) Rate basis.--The applicable rate of
interest under this subparagraph 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
Administrator 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.
``(8) Loss reserve of intermediaries.--
``(A) In general.--The Administrator shall, by
regulation to be codified in the Code of Federal
Regulations, require each intermediary to establish a
loan loss reserve fund, and to maintain such reserve
fund until all obligations owed to the Administrator
under this subsection are repaid.
``(B) Amount of reserve fund.--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.
``(C) Reduction of required amount.--
Notwithstanding subparagraph (B), the Administrator may
reduce the annual loan loss reserve requirement of an
intermediary to reflect the actual average loan loss
rate for the intermediary during the preceding 5-year
period, except that in no case shall the loan loss
reserve be reduced to less than 10 percent of the
outstanding balance of the notes receivable owed to the
intermediary. The Administrator may reduce the annual
loan loss reserve requirement of an intermediary under
this subparagraph only if the intermediary demonstrates
to the satisfaction of the Administrator that--
``(i) the average annual loss rate for the
intermediary during the preceding 5-year period
is less than 15 percent; and
``(ii) no other factors exist that may
impair the ability of the intermediary to repay
all obligations owed to the Administrator under
this subsection.
``(D) Review by administrator.--After the initial 5
years of an intermediary's participation in the program
authorized by this subsection, the Administrator shall,
at the request of the intermediary, conduct a review of
the annual loss rate of the intermediary. Any
intermediary that requests a reduction in its loan loss
reserve shall be reviewed based on the most recent 5-
year period preceding the request.
``(9) Loans to small business concerns from eligible
intermediaries.--
``(A) In general.--An eligible intermediary shall
make fixed rate loans to startup, newly established,
and growing small business concerns from the funds made
available to it under paragraph (7) for working capital
and the acquisition of materials, supplies, furniture,
fixtures, and equipment.
``(B) Loan amount.--To the extent practicable, each
intermediary that operates a microloan program under
this subsection shall maintain a microloan portfolio
with an average loan size of not more than $15,000. An
intermediary may make a loan under this subsection of
more than $20,000 to a small business concern only if
such small business concern demonstrates that it is
unable to obtain credit elsewhere at comparable
interest rates and that it has good prospects for
success. In no case shall an intermediary make a loan
under this subsection of more than $50,000, or have
outstanding or committed to any 1 borrower more than
$50,000.
``(C) Interest limit.--Notwithstanding any State
limitation on the rate or amount of interest that may
be charged, taken, received, or reserved on a loan, the
maximum rate of interest to be charged on a microloan
funded under this subsection shall not exceed the rate
of interest applicable to a loan made to an
intermediary by the Administrator--
``(i) in the case of a loan of more than
$10,000 made by the intermediary to a small
business concern or entrepreneur by more than
7.75 percentage points; and
``(ii) in the case of a loan of not more
than $10,000 made by the intermediary to a
small business concern or entrepreneur by more
than 8.5 percentage points.
``(D) Review restriction.--The Administrator shall
not review individual microloans made by intermediaries
prior to approval.
``(E) Establishment of child care or transportation
businesses.--In addition to other eligible small
businesses concerns, borrowers under any program under
this subsection may include individuals who will use
the loan proceeds to establish for-profit or nonprofit
child care establishments or businesses providing for-
profit transportation services.
``(10) Program funding for microloans.--
``(A) Number of participants.--Under the program
authorized by this subsection, the Administrator may
fund, on a competitive basis, not more than 300
intermediaries.
``(B) Minimum allocation.--Subject to the
availability of appropriations, of the total amount of
new loan funds made available for award under this
subsection in each fiscal year, the Administrator shall
make available for award in each State an amount equal
to the sum of--
``(i) the lesser of--
``(I) $800,000; or
``(II) \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 Administrator.
``(C) Redistribution.--If, at the beginning of the
third quarter of a fiscal year, the Administrator
determines that any portion of the amount made
available to carry out this subsection is unlikely to
be made available under subparagraph (B) during that
fiscal year, the Administrator may make that portion
available for award in any one or more States without
regard to subparagraph (B).
``(11) Equitable distribution of intermediaries.--In
approving microloan program applicants and providing funding to
intermediaries under this subsection, the Administrator shall
select and provide funding to such intermediaries as will
ensure appropriate availability of loans for small businesses
in all industries located throughout each State, particularly
those located in urban and in rural areas.
``(12) Marketing, management and technical assistance
grants to intermediaries.--The Administrator may make grants
described in paragraph (2)(B) in accordance with the following
requirements:
``(A) Grant amounts.--Except as otherwise provided
in subparagraph (C) and subject to subparagraph (B),
each intermediary that receives a loan under this
subsection shall be eligible to receive a grant to
provide marketing, management, and technical assistance
to small business concerns that are borrowers under
this subsection. Except as provided in subparagraph
(C), each intermediary meeting the requirements of
subparagraph (B) may receive a grant of not more than
25 percent of the total outstanding balance of loans
made to it under this subsection.
``(B) Contribution.--As a condition of any grant
made under subparagraph (A), the Administrator shall
require the intermediary to contribute an amount equal
to 25 percent of the amount of the grant, obtained
solely from non-Federal sources. In addition to cash or
other direct funding, the contribution may include
indirect costs or in-kind contributions paid for under
non-Federal programs.
``(C) Additional technical assistance grants for
making certain loans.--
``(i) In general.--Each intermediary that
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 shall be eligible
to receive a grant equal to 5 percent of the
total outstanding balance of loans made to the
intermediary under this subsection, in addition
to grants made under subparagraph (A).
``(ii) Purposes.--A grant awarded under
clause (i) may be used to provide marketing,
management, and technical assistance to small
business concerns that are borrowers under this
subsection.
``(iii) Contribution exception.--The
contribution requirements in subparagraph (B)
do not apply to grants made under this
subparagraph.
``(D) Eligibility for multiple sites or offices.--
The eligibility for a grant described in subparagraph
(A) or (C) shall be determined separately for each
loan-making site or office of an intermediary.
``(E) Assistance to certain small business
concerns.--Each intermediary may expend grant funds
received under this subsection to provide information
and technical assistance to small business concerns
that are prospective borrowers under this subsection
and may enter into contracts with third parties to
provide such information and assistance.
``(13) Private sector borrowing technical assistance
grants.--Grants described in paragraph (2)(C) shall be subject
to the following requirements:
``(A) Grant amounts.--Subject to the requirements
of subparagraph (B), the Administrator may make not
more than 55 grants annually, each in amounts not to
exceed $200,000 for the purposes specified in paragraph
(2)(C).
``(B) Contribution.--As a condition of any grant
made under subparagraph (A), the Administrator 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.
``(14) Grants for management, marketing, technical
assistance, and related services.--
``(A) In general.--The Administrator may procure
technical assistance for intermediaries participating
in the Microloan Program to ensure that such
intermediaries have the knowledge, skills, and
understanding of microlending practices necessary to
operate successful microloan programs.
``(B) Assistance amount.--The Administrator shall
transfer 7 percent of its annual appropriation for
loans and loan guarantees under this subsection to the
Administration's Salaries and Expense Account for the
specific purpose of providing 1 or more technical
assistance grants to experienced microlending
organizations and national and regional nonprofit
organizations that have demonstrated experience in
providing training support for microenterprise
development and financing to achieve the purpose set
forth in subparagraph (A).
``(C) Welfare-to-entrepreneurship microloan
initiative.--Of amounts made available to carry out the
welfare-to-entrepreneurship microloan initiative in any
fiscal year, the Administrator may use not more than 5
percent to provide technical assistance, either
directly or through contractors, to welfare-to-
entrepreneurship microloan initiative grantees, to
ensure that, as grantees, they have the knowledge,
skills, and understanding of microlending and welfare-
to-entrepreneurship transition, and other related
issues, to operate a successful welfare-to-
entrepreneurship microloan initiative.
``(15) Evaluation of welfare-to-entrepreneurship microloan
initiative.--On January 31, 1999, and annually thereafter, the
Administrator shall submit to the Committee on Small Business
of the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate a report on the
welfare-to-entrepreneurship microloan initiative, including a
description of the amounts made available to carry out such
initiative.
``(16) Definitions.--For purposes of this subsection--
``(A) Intermediary.--The term `intermediary'
means--
``(i) a private, nonprofit entity;
``(ii) a private, nonprofit community
development corporation;
``(iii) a consortium of private, nonprofit
organizations or nonprofit community
development corporations;
``(iv) a quasi-governmental economic
development entity (such as a planning and
development district), other than a State,
county, municipal government, or any agency
thereof, if--
``(I) no application is received
from an eligible nonprofit
organization; or
``(II) the Administrator determines
that the needs of a region or
geographic area are not adequately
served by an existing, eligible
nonprofit organization that has
submitted an application; or
``(v) an agency of or nonprofit entity
established by a Native American Tribal
Government, that seeks to borrow or has
borrowed funds from the Administrator to make
microloans to small business concerns under
this subsection.
``(B) Microloan.--The term `microloan' means a
fixed rate loan of not more than $50,000, made by an
intermediary to a startup, newly established, or
growing small business concern.
``(C) Rural area.--The term `rural area' means any
political subdivision or unincorporated area--
``(i) in a nonmetropolitan county (as
defined by the Secretary of Agriculture) or its
equivalent thereof; or
``(ii) in a metropolitan county or its
equivalent that has a resident population of
less than 20,000 if the Administrator has
determined such political subdivision or area
to be rural.''.
(e) Repeal of Certain Provisions of Section 7 of the Small Business
Act.--Section 7 of the Small Business Act (15 U.S.C. 636) is amended--
(1) by striking subsection (d) and inserting the following:
``(d) [RESERVED].'';
(2) by striking subsection (h) and inserting the following:
``(h) [RESERVED].'';
(3) by striking subsection (j) and inserting the following:
``(j) [RESERVED].''; and
(4) by striking subsection (k) and inserting the following:
``(k) [RESERVED].''.
(f) Continuation of temporary predisaster mitigation program.--
(1) In general.--There is a predisaster mitigation program
under which the Administrator may make, under section 7(b)(1)
of the Small Business Act (15 U.S.C. 636(b)(1)) such loans
(either directly or in cooperation with banks or other lending
institutions through agreements to participate on an immediate
or deferred (guaranteed) basis), as the Administrator may
determine to be necessary or appropriate, to enable small
businesses to use mitigation techniques in support of a formal
mitigation program established by the Federal Emergency
Management Agency, except that no loan or guarantee may be
extended to a small business under this paragraph unless the
Administrator finds that the small business is otherwise unable
to obtain credit for the purposes described in this paragraph.
(2) Termination.--No loan shall be made under this
subsection after September 30, 2004.
(g) Effective Date.--The amendments made under this section shall
apply to loans and grants made, and other assistance provided, after
the date of the enactment of this Act.

SEC. 208. GOVERNMENT CONTRACT AND BUSINESS DEVELOPMENT ASSISTANCE FOR
SMALL BUSINESS CONCERNS, ETC.

(a) In General.--Section 8 of the Small Business Act (15 U.S.C.
637) is amended by striking subsections (a), (b), and (c) and inserting
the following new subsections:
``(a) Government Contract and Business Development Assistance for
Small Business Concerns.--
``(1) Establishment.--There is within the Administration a
program to be carried out by the Administrator to enhance the
competitive viability of program participants by providing
Government contract and business development assistance to
program participants consistent with the requirements of this
section.
``(2)(A) Contract authority.--The Administrator shall, to
the extent that Administrator determines it to be necessary or
appropriate, enter into any contract with any contracting
officer obligating the Administrator to furnish goods or
service to the Government.
``(B) Negotiation with contracting officer.--In any case in
which the Administrator certifies to a contracting officer that
the Administrator is competent and responsible to perform any
procurement contract to be let by such officer, such officer
may let such procurement contract to the Administrator upon
such terms and conditions as may be agreed upon between the
Administrator and such officer.
``(C) Fair market price restriction.--A contracting officer
shall not let a contract for goods or services under this
paragraph if the amount of such contract exceeds the fair
market price of such goods or services.
``(D) Appeal of contracting officer decision.--(i) Whenever
the Administrator and a contracting officer fail to agree, the
matter shall be submitted for determination by the
Administrator to the head of the agency of the contracting
officer.
``(ii) Not later than 5 days from the date the
Administrator is notified of a contracting officer's adverse
decision, the Administrator may notify the contracting officer
of the intent to appeal such adverse decision, and within 15
days of such date the Administrator shall file a written
request for a reconsideration of the adverse decision with head
of the agency.
``(iii) For purposes of this subparagraph, a contracting
officer's adverse decision includes a decision not to make
available for award pursuant to this subsection a particular
procurement requirement or the failure to agree on the terms
and conditions of a contract to be awarded noncompetitively
under the authority of this subsection.
``(iv) Upon receipt of the notice of intent to appeal, the
head of the agency shall suspend further action regarding the
procurement until a written decision on the Administrator's
request for reconsideration has been issued by such agency
head, unless the head of the agency makes a written
determination that urgent and compelling circumstances which
significantly affect interests of the United States will not
permit waiting for a reconsideration of the adverse decision.
``(v) If the Administrator's request for reconsideration is
denied, the head of the agency shall specify the reasons why
the selected firm was determined to be incapable to perform the
procurement requirement, and the findings supporting such
determination, which shall be made a part of the contract file
for the requirement.
``(E) Determination of unsuitability.--If a contracting
officer requests the Administrator to make the certification
described in subparagraph (B) with respect to any contract that
the Administrator determines is not suitable for award under
this subsection, the Administrator shall notify the contracting
officer of the Administrator's determination not later than 3
days after the date of such request.
``(F) Subcontracting authority.--(i) The Administrator
shall, to the extent that the Administrator determines it to be
necessary or appropriate, arrange for the performance of such
procurement contracts by negotiating or otherwise letting
subcontracts to program participants for such goods or services
as may be necessary to enable the Administrator to perform such
contracts.
``(ii)(I) Except as authorized by subclause (II) or (III),
no award shall be made pursuant to this section to 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
organization, or any other business enterprise owned by the
tribe, unless the Administrator determines that one or more
such tribally owned business concerns have obtained, or are
likely to obtain, a substantial unfair competitive advantage
within an industry category.
``(III) Any joint venture established under the authority
of section 602(b) of the Business Opportunity Development
Reform Act of 1988 (Public Law 100-656) shall be eligible for
award of a contract pursuant to this section.
``(G) Delegation of contract administration.--(i) The
Administrator and the head of the agency making the procurement
shall enter into an agreement under which a subcontract awarded
under this subsection shall be administered by the head of the
agency making the procurement.
``(ii) Notwithstanding clause (i), the Administrator shall
negotiate and award any such subcontract and shall assist the
program participant in the settlement of any dispute arising
from the performance of such subcontract.
``(iii) Any agreement entered into by the Administrator
with the head of another agency before the date of the
enactment of this clause that allows such agency head to
negotiate or award a contract under this subsection shall not
apply with respect to any subcontract offered for award after
such date.
``(H) Award after graduation.--The Administrator shall, to
the extent that the Administrator determines it to be necessary
or appropriate, make an award to a small business concern which
has completed its period of program participation as described
in paragraph (21)(F) if--
``(i) the contract will be awarded as a result of
an offer (including price) submitted in response to a
published solicitation relating to a competition
conducted pursuant to subparagraph (H); and
``(ii) the prospective contract awardee was a
program participant eligible for award of the contract
on the date specified for receipt of offers contained
in the contract solicitation.
``(I) Award through competition.--(i) A subcontract offered
for award pursuant to this subsection shall be awarded on the
basis of competition restricted to program participants if--
``(I) there is a reasonable expectation that at
least 2 program participants will submit offers and
that award can be made at a fair market price; and
``(II) the estimated anticipated award price of the
contract (including options) may exceed $5,000,000 in
the case of a contract opportunity assigned a North
American Industrial Classification System code for
manufacturing and $3,000,000 (including options) in the
case of all other contract opportunities.
``(ii) The Administrator may award a subcontract under this
subsection on the basis of a competition restricted to program
participants if the requirements of clause (i)(I) are met.
``(J) Sole source award.--(i) In the case of any
subcontract not awarded under subparagraph (I), the
Administrator shall award such contract sole source to a
program participant if--
``(I) the program participant is determined to be a
responsible contractor with respect to performance of
such contract opportunity;
``(II) the award of such contract would be
consistent with the program participant's business
plan; and
``(III) the award of the contract would not result
in the program participant exceeding the requirements
established by paragraph (21)(G)(iii).
``(ii) To the maximum extent practicable, the Administrator
shall promote the equitable geographic distribution of sole
source contracts awarded pursuant to this subsection.
``(3) Surety bonds.--Notwithstanding subsections (a) and
(c) of the first section of the Act entitled `An Act requiring
contracts for the construction, alteration, and repair of any
public building or public work of the United States to be
accompanied by a performance bond protecting the United States
and by additional bond for the protection of persons furnishing
material and labor for the construction, alteration, or repair
of said public buildings or public work,' approved August 24,
1935 (49 Stat. 793; 40 U.S.C. 270a), no program participant
shall be required to provide any amount of any bond as a
condition of receiving any subcontract under this subsection
if--
``(A) the Administrator determines that such amount
is inappropriate for such program participant in
performing such contract;
``(B) the Administrator takes such measures as the
Administrator considers appropriate for the protection
of persons furnishing materials and labor to a program
participant receiving any benefit pursuant to this
paragraph;
``(C) the Administrator assists, insofar as
practicable, a program participant receiving the
benefits of this paragraph to develop, within a
reasonable period of time, such financial and other
capability as may be needed to obtain such bonds as the
Administrator may subsequently require for the
successful completion of any program conducted under
the authority of this subsection;
``(D) the Administrator finds that such program
participant 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
``(E) the program participant is determined to be a
startup concern and such concern has not been
participating in any program conducted under the
authority of this subsection for a period exceeding one
year.
``(4) Sole source contract negotiation.--(A) Any program
participant selected by the Administrator to perform a contract
to be let noncompetitively pursuant to this subsection shall,
when practicable, participate in any negotiation of the terms
and conditions of such contract.
``(B) Calculation of fair market price.--(i) For purposes
of paragraph (2)(C), a fair market price shall be determined by
the agency according to clauses (ii) and (iii) and submitted along with
the procurement requirement to the Administrator. The submission also
shall include any data used by the agency in calculating the fair
market price.
``(ii) The estimate of a current fair market price for a
new procurement requirement, or a requirement that does not
have a satisfactory procurement history, shall be derived from
a price or cost analysis taking into account prevailing market
conditions, commercial prices for similar goods or services,
and data from other Federal agencies. Such analysis shall
consider such cost or pricing data as may be timely submitted
by the Administrator.
``(iii) The estimate of a current fair market price for a
procurement requirement that has a satisfactory procurement
history shall be based on recent award prices adjusted to
insure comparability. Such adjustments shall take into account
differences in quantities, performance times, plans,
specifications, transportation costs, packaging and packing
costs, labor and materials costs, overhead costs, and any other
additional costs which may be deemed appropriate.
``(iv) The agency's estimate of the current fair market
price (and any supporting data furnished to the Administrator)
shall not be disclosed to any potential offeror (other than the
Administrator).
``(C) A program participant selected by the Administrator
to perform or negotiate a contract to be let pursuant to this
subsection may request the Administrator to protect the
agency's estimate of the fair market price for such contract
pursuant to paragraph (2)(A).
``(5) Social disadvantage.--(A) Socially disadvantaged
individuals are those who have been subjected to racial or
ethnic prejudice or cultural bias because of their identity as
a member of a group without regard to their individual
qualities.
``(B) Any determination made pursuant to this paragraph
shall be made by the Administrator and shall not be delegated.
``(6) Economic disadvantage.--(A)(i) Economically
disadvantaged individuals are those socially disadvantaged
individuals whose ability to compete in the free enterprise
system has been impaired due to diminished capital and credit
opportunities as compared to others in the same business area
who are not socially disadvantaged.
``(ii) In determining the degree of diminished credit and
capital opportunities the Administrator shall consider the
assets and net worth of such socially disadvantaged individual
as it relates to--
``(I) the assets and net worth of a business owner
who is not socially disadvantaged; and
``(II) the capital needs of the primary industry in
which the owner of the business is engaged.
``(iii) In determining the economic disadvantage of an
Indian tribe, the Administrator shall consider, where
available, information such as the following--
``(I) the per capita income of members of the tribe
excluding judgment awards;
``(II) the percentage of the local Indian
population below the poverty level; and
``(III) the tribe's access to capital markets.
``(B) For the purpose of this section, an individual who
has been determined by the Administrator to be economically
disadvantaged at the time of program entry shall be deemed to
be economically disadvantaged for the term of the program, as
computed under paragraph (21).
``(C) Whenever the Administrator computes personal net
worth for the purpose of program entry, it shall exclude from
such computation--
``(i) the value of investments that disadvantaged
owners have in their concerns, except that such value
shall be taken into account under this paragraph when
comparing such concerns to other concerns in the same
business area that are owned by other than socially
disadvantaged persons; and
``(ii) the equity that disadvantaged owners have in
their primary personal residences.
``(D) The Administrator shall not establish a maximum net
worth that prohibits program entry that is less than $750,000.
``(7) Program participant.--
``(A) Definition.--For purposes of this section,
the term `program participant' means a small business
concern which is certified by the Administrator that it
meets the requirements of subparagraph (B) and--
``(i) which is at least 51 percent
unconditionally owned by--
``(I) one or more socially and, at
the time of program entry, economically
disadvantaged individuals,
``(II) an economically
disadvantaged Indian tribe, (or a
wholly owned business entity of such
tribe), or
``(III) an economically
disadvantaged Native Hawaiian
organization, or
``(ii) in the case of any publicly owned
business, at least 51 percent of the stock of
which is unconditionally owned by--
``(I) one or more socially and, at
the time of program entry, economically
disadvantaged individuals,
``(II) an economically
disadvantaged Indian tribe (or a wholly
owned business entity of such tribe),
or
``(III) an economically
disadvantaged Native Hawaiian
organization.
``(B) Program participation eligibility.--A program
participant meets the requirements of this subparagraph
if the management and daily business operations of such
small concern are controlled by one or more--
``(i) socially and, at the time of program
entry, economically disadvantaged individuals
described in subparagraph (A)(i)(I) or
subparagraph (A)(ii)(I),
``(ii) members of an economically
disadvantaged Indian tribe described in
subparagraph (A)(i)(II) or subparagraph
(A)(ii)(II), or
``(iii) Native Hawaiian organizations
described in subparagraph (A)(i)(III) or
subparagraph (A)(ii)(III).
``(C) Native hawaiian organization.--For purposes
of this subsection, the term `Native Hawaiian
Organization' means any community service organization
serving Native Hawaiians in the State of Hawaii which--
``(i) is a nonprofit corporation that has
filed articles of incorporation with the
director (or the designee thereof) of the
Hawaii Department of Commerce and Consumer
Affairs, or any successor agency,
``(ii) is controlled by Native Hawaiians,
and
``(iii) whose business activities will
principally benefit such Native Hawaiians.
``(D) Annual certification.--Each program
participant shall certify to the District Director for
the district in which its principal place of business
is located, on an annual basis, that it meets the
requirements of this paragraph regarding ownership and
control by socially disadvantaged individuals.
``(E) Capability determination.--The term `program
participant' shall not include any concern unless the
Administrator determines that with contract, financial,
technical, and management support the small business
concern will be able to perform contracts which may be
awarded to such concern under paragraph (2)(F) and has
reasonable prospects for success in competing in the
private sector.
``(F) Special rules on eligibility.--(i) Except as
provided in clause (iii), no individual who was
determined pursuant to this section to be socially and
economically disadvantaged before the date of the
enactment of this subparagraph shall be permitted to
assert such disadvantage with respect to any other
concern making application for certification after such
date.
``(ii) Except as provided in clause (iii), any
individual upon whom eligibility is based pursuant to
paragraph (5) shall be permitted to assert such
eligibility for only one small business concern.
``(iii) A socially and economically disadvantaged
Indian tribe may own more than one small business
concern eligible for assistance pursuant to this
subsection if--
``(I) the Indian tribe does not own another
firm in the same industry which has been
determined to be eligible to receive contracts
under this program, and
``(II) the individuals responsible for the
management and daily operations of the concern
do not manage more than two program
participants.
``(iv) No program participant, previously eligible
for the award of contracts pursuant to this subsection,
shall be subsequently recertified for program
participation if its prior participation in the program
was concluded for any of the reasons described in
paragraph (10).
``(v)(I) A program participant eligible for the
award of contracts pursuant to this subsection shall
remain eligible for such contracts if there is a
transfer of ownership or control of the program
participant that does not alter the eligibility of the
program participant as determined by paragraphs (5),
(6), and (7).
``(II) The program participant shall notify the
Assistant Administrator for Minority Small Business and
Capital Ownership of any such change in control or
ownership and provide the Assistant Administrator with
sufficient information to enable the Assistant
Administrator to determine that the transfer of
ownership and control does not alter eligibility for
participation in the program.
``(III) In the event of such a alteration of
ownership or control, 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 (27).
``(8) Management restrictions.--(A) The Administrator shall
not restrict the amount of money that may be removed from the
program participants by its owners.
``(B) The Administrator shall not impose any restrictions
on the management of the company except insofar as such
management would violate other eligibility provisions or
Federal procurement law.
``(C) Notwithstanding this provision, the Administrator may
determine that a program participant is not capable of
performing a specific contract and may choose not to award a
contract to a program participant.
``(9) Expansion into other industries.--Limitations
established by the Administrator in its regulations and
procedures restricting the award of contracts pursuant to this
subsection to a limited number of North American Industry
Classification System codes in an approved business plan shall
not be applied in a manner that inhibits the logical business
progression by a program participant into areas of industrial
endeavor where such concern has the potential for success.
``(10) Opportunity for hearing.--(A) Subject to the
provisions of subparagraph (E), the Administrator, prior to
taking any action described in subparagraph (B), shall provide
the program participant that is the subject of such action, an
opportunity for a hearing on the record after providing written
notification of an action set forth in paragraph (B), in
accordance with chapter 5 of title 5, United States Code.
``(B) The actions referred to in subparagraph (A) are--
``(i) denial of program admission based upon a
negative determination pursuant to paragraph (5), (6),
or (7);
``(ii) a termination pursuant to paragraph (21)(D);
``(iii) a graduation pursuant to paragraph (21)(F);
and
``(iv) the denial of a request to issue a waiver
pursuant to paragraph (20)(B).
``(C) The Administrator's proposed action, in any
proceeding conducted under the authority of this paragraph,
shall be sustained unless the decision is not supported by
substantial evidence in the record.
``(D) A decision rendered pursuant to this paragraph shall
be considered final agency action for purposes of chapter 7 of
title 5, United States Code.
``(E) The hearing officer selected to preside over a
proceeding conducted under the authority of this paragraph
shall decline to accept jurisdiction over any matter that--
``(i) does not, on its face, allege facts that, if
proven to be true, would warrant reversal or
modification of the Administrator'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 90 days after a written
notification of the Administrator taking an action pursuant to
subparagraph (B).
``(11) Outreach effort.--(A) The Administrator shall
develop and implement an outreach program to inform and recruit
small business concerns to apply for eligibility for assistance
under this subsection.
``(B) Such program shall make a sustained and substantial
effort to solicit applications for certification from small
business concerns located in areas of concentrated unemployment
or underemployment or within labor surplus areas and within
States having relatively few program participants and from
potentially eligible program participants in industry
categories that have not substantially participated in the
award of contracts let under the authority of this subsection.
``(12) Construction contracts.--To the maximum extent
practicable, construction subcontracts awarded by the
Administrator pursuant to this subsection shall be awarded
within the county or State where the work is to be performed.
``(13) Capability statement.--
``(A) In general.--The Administrator shall require
each concern eligible to receive subcontracts pursuant
to this subsection to annually prepare and submit to
the Administrator a capability statement.
``(B) Contents.--Such statement shall briefly
describe such concern's various contract performance
capabilities and shall contain the name and telephone
number of the business opportunity specialist in the
district to which the program participant is assigned.
``(C) Classification.--The Administrator shall
separate such statements by those program participants
primarily dependent upon local contract support and
those primarily requiring a national marketing effort.
``(D) Dissemination.--Statements primarily
dependent upon local contract support shall be
disseminated to appropriate buying activities in the
marketing area of the concern. The remaining statements
shall be disseminated to the Directors of Small and
Disadvantaged Business Utilization for the appropriate
agencies who shall further distribute such statements
to buying activities within such agencies that may
purchase the types of items or services described on
the capability statements.
``(E) Contracting activity communication with
administration.--Contracting activities receiving
capability statements shall, within 60 days after
receipt, contact the relevant business opportunity
specialist to indicate the number, type and approximate
dollar value of contract opportunities that such
activities may be awarding over the succeeding 12-month
period and which may be appropriate to consider for
contracting with the Administrator and subsequent
subcontracting to those concerns for which it has
received capability statements.
``(14) Contract forecast.--(A) Each executive agency
reporting to the Federal Procurement Data System contract
actions with an aggregate value in excess of $50,000,000 shall prepare
a forecast of expected contract opportunities or classes of contract
opportunities for the next and succeeding fiscal years that small
business concerns, including those owned and controlled by socially and
economically disadvantaged individuals, are capable of performing. Such
forecast shall be periodically revised during such year. To the extent
such information is available, the agency forecasts shall specify the
following:
``(i) The approximate number of individual contract
opportunities (and the number of opportunities within a
class).
``(ii) The approximate dollar value, or range of
dollar values, for each contract opportunity or class
of contract opportunities.
``(iii) The anticipated time (by fiscal year
quarter) for the issuance of a procurement request.
``(iv) The activity responsible for the award and
administration of the contract.
``(B) Forecast dissemination.--The head of each executive
agency subject to the provisions of subparagraph (A) shall
within 10 days of completion furnish such forecasts to the
Administrator and the Director of the Office of Small and
Disadvantaged Business Utilization established pursuant to
section 15(k) of this Act for such agency.
``(C) Limits on dissemination.--The information reported
pursuant to subparagraph (B) may be limited to classes of items
and services for which there are substantial annual purchases.
``(D) Forecast availability.--Such forecasts shall be
available to program participants and all other small business
concerns.
``(15) Percentages of contract performance by program
participants.--
``(A) Services and procurement.--A program
participant may not be awarded a contract under this
subsection unless the program participant agrees that--
``(i) in the case of a contract for
services (except construction), at least 50
percent of the cost of contract performance
incurred for personnel shall be expended for
employees of the concern; and
``(ii) in the case of a contract for
procurement of supplies (other than procurement
from a regular dealer in such supplies), the
concern will perform work for at least 50
percent of the cost of manufacturing the
supplies (not including the cost of materials).
``(B) Alteration of percentages.--The Administrator
may change the percentage under clause (i) or (ii) of
subparagraph (A) if the Administrator determines that
such change is necessary to reflect conventional
industry practices among business concerns that are
below the numerical size standard established by the
Administrator pursuant to section 3(a) of this Act for
businesses in that industry category. A percentage
established under the preceding sentence may not differ
from a percentage established under section 15(n) of
this Act.
``(C) Construction contract regulations.--(i) The
Administrator shall establish, by regulation and after
the opportunity for notice and comment, requirements
similar to those specified in subparagraph (A) to be
applicable to contracts for general and specialty
construction and to contracts for any other industry
category not otherwise subject to the requirements of
such subparagraph.
``(ii) The percentage applicable to any such
requirement shall be determined in accordance with
subparagraph (B), except that such a percentage may not
differ from a percentage established under section
15(n) of this Act for the same industry category.
``(16) Performance exception for wholesalers and
retailers.--(A) An otherwise responsible program participant
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 pursuant to this subsection or
section 15(a) solely because such concern is other than the
actual manufacturer or processor of the product to be supplied
under the contract.
``(B) To be in compliance with the requirements referred to
in subparagraph (A), the program participant shall--
``(i) be primarily engaged in the wholesale or
retail trade;
``(ii) be a small business concern under the size
standard for the North American Industrial
Classification System Code assigned to the contract
solicitation on which the offer is being made;
``(iii) be a regular dealer, as defined pursuant to
section 1(a) of the Act entitled `An Act to provide
conditions for the purchase of supplies and the making
of contracts by the United States, and for other
purposes', approved June 30, 1936 (popularly known as
the `Walsh-Healey Act'; 41 U.S.C. 35(a)), in the
product to be offered the Government or be specifically
exempted from such section by paragraph (24)(C) of this
subsection; and
``(iv) represent that it will supply the product of
a small manufacturer as defined in section 3 of this
Act, unless a waiver of such requirement is granted--
``(I) by the Administrator, after reviewing
a determination by the contracting officer that
no small manufacturer 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 manufacturer is available to participate in the Federal
procurement market.
``(17) Restriction on administration employees.--
``(A) In general.--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 if such person
participated personally (either directly or indirectly)
in decision-making responsibilities relating to such
program participant or with respect to the
administration of any assistance provided to program
participants generally under this subsection, section
8(b), or section 7(a)(20).
``(B) Prohibited transactions.--The activities and
transactions prohibited by subparagraph (A) include--
``(i) the buying, selling, or receiving
(except by inheritance) of any legal or
beneficial ownership of stock or any other
ownership interest or the right to acquire any
such interest;
``(ii) the entering into or execution of
any written or oral agreement (whether or not
legally enforceable) to purchase or otherwise
obtain any right or interest described in
clause (i); or
``(iii) the receipt of any other benefit or
right that may be an incident of ownership.
``(C) Employee certification and penalties.--(i)
The employees designated in clause (ii) shall annually
submit a written certification to the Administrator
regarding compliance with the requirements of this
paragraph.
``(ii) The employees referred to in clause (i)
are--
``(I) regional administrators;
``(II) district directors;
``(III) the Assistant Administrator for
Minority Small Business and Capital Ownership
Development;
``(IV) employees whose principal duties
relate to the award of contracts or the
provision of other assistance pursuant to this
subsection or section 8(b); and
``(V) such other employees as the
Administrator may designate.
``(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 percent of the
maximum amount of gain such employee realized or could
have realized as a result of engaging in those
activities and transactions prescribed by subparagraph
(B).
``(iv) In addition to any other remedy or sanction
provided for under law or regulation, any person who
falsely certifies pursuant to clause (i) shall be
subject to a civil penalty under the Program Fraud
Civil Remedies Act of 1986 (31 U.S.C. 3801-3812).
``(18) Prohibition on political activity.--
``(A) In general.--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 8(b), shall not, with respect to
any such action, exercise or threaten to exercise such
authority on the basis of the political activity or
affiliation of any party. Employees of the
Administration shall expeditiously report to the
Inspector General of the Administration any such action
for which such employee's participation has been
solicited or directed.
``(B) Penalties.--Any employee who willfully and
knowingly violates subparagraph (A) shall be subject to
disciplinary action which may consist of separation
from service, reduction in grade, suspension, or
reprimand.
``(C) Exception.--Subparagraph (A) shall not apply
to any action taken as a penalty or other enforcement
of a violation of any law, rule, or regulation
prohibiting or restricting political activity.
``(D) Other laws not affected.--The prohibitions of
subparagraph (A), and remedial measures provided for
under subparagraphs (B) and (C) with regard to such
prohibitions, shall be in addition to, and not in lieu
of, any other prohibitions, measures or liabilities
that may arise under any other provision of law.
``(19) Annual report to business opportunity specialist.--
``(A) In general.--Program participants shall
semiannually report to their assigned business
opportunity specialist the following:
``(i) A listing of any agents,
representatives, attorneys, accountants,
consultants, and other parties (other than
employees) receiving compensation to assist in
obtaining a Federal contract for such program
participant.
``(ii) The amount of compensation received
by any person listed under clause (i) during
the relevant reporting period and a description
of the activities performed in return for such
compensation.
``(B) Submissions to principal office.--The
business opportunity specialist shall promptly review
and forward such report to the Assistant Administrator
for Minority Small Business and Capital Ownership
Development. Any report that raises a suspicion of
improper activity shall be reported immediately to the
Inspector General of the Administration.
``(C) Cause for termination.--The failure to submit
a report pursuant to the requirements of this
subsection and applicable regulations shall be
considered good cause for the initiation of a
termination proceeding pursuant to paragraph (21)(D) of
this section.
``(20) Effect of change of ownership and control.--
``(A) In general.--
``(i) Subject to the provisions of
subparagraph (B), a contract (including
options) awarded pursuant to this subsection
shall be performed (as performance is defined
in paragraphs (15) and (16)) by the program
participant that initially received such
contract.
``(ii) Notwithstanding the provisions of
clause (i), if the owner or owners upon whom
eligibility was based relinquish ownership or
control of such concern, or enter into any
agreement to relinquish such ownership or
control, such contract or option shall be
terminated for the convenience of the
Government, except that no repurchase costs or
other damages may be assessed against such
concerns due solely to the provisions of this
subparagraph.
``(B) Waiver.--The Administrator may, on a
nondelegable basis, waive the requirements of
subparagraph (A) only if one of the following
conditions exist:
``(i) When it is necessary for the owners
of the concern to surrender partial control of
such concern on a temporary basis in order to
obtain equity financing.
``(ii) The head of the contracting agency
for which the contract is being performed
certifies that termination of the contract
would severely impair attainment of the
agency's program objectives or missions.
``(iii) Ownership and control of the
concern that is performing the contract will
pass to another small business concern that is
a program participant, but only if the
acquiring firm would otherwise be eligible to
receive the award pursuant to this subsection.
``(iv) The individuals upon whom
eligibility was based are no longer able to
exercise control of the concern due to
incapacity or death.
``(v) When, in order to raise equity
capital, it is necessary for the disadvantaged
owners of the concern to relinquish ownership
of a majority of the voting stock of such
concern, but only if--
``(I) such concern has exited the
program established under this
subsection;
``(II) the disadvantaged owners
will maintain ownership of the largest
single outstanding block of voting
stock (including stock held by
affiliated parties); and
``(III) the disadvantaged owners
will maintain control of daily business
operations.
``(C) Timing of waiver request.--The Administrator
may waive the requirements of subparagraph (A) if--
``(i) in the case of subparagraphs (B)(i),
(ii), and (iii), he is requested to do so prior
to the actual relinquishment of ownership or
control; and
``(ii) in the case of subparagraph (B)(iv),
he is requested to do so as soon as possible
after the incapacity or death occurs.
``(D) Notification to administrator.--Concerns
performing contracts awarded pursuant to this
subsection shall be required to notify the
Administration immediately upon entering an agreement
(either oral or in writing) to transfer all or part of
its stock or other ownership interest to any other
party.
``(E) Treatment of small business investment
company interest.--Notwithstanding any other provision
of law, for the purposes of determining ownership and
control of a concern under this section, any potential
ownership interests held by investment companies
licensed under the Small Business Investment Act of
1958 shall be treated in the same manner as interests
held by the individuals upon whom eligibility is based.
``(21) Conditions of participation.--
``(A) Duration.--A program participant shall be
permitted to continue participation in such program for
a period of time which is 9 years. Nothing contained in
this subparagraph shall be deemed to prevent the
Administrator from instituting a termination or
graduation pursuant to subparagraph (F) or (H) for
issues unrelated to the expiration of any time period
limitation.
``(B) Business plan submission.--(i) Promptly after
certification as a participant in the program
established by this section, a program participant
shall submit a business plan (hereinafter referred to
as the `plan') as described in clause (ii) of this
subparagraph for review by the Business Opportunity
Specialist assigned to assist such program participant.
``(ii) The plan may be a revision of a preliminary
business plan submitted by the program participant or
required by the Administrator as a part of the
application for certification under this subsection and
shall be designed to result in the program participant
eliminating the conditions or circumstances upon which
the Administrator determined eligibility pursuant to
paragraph (7) of this section.
``(iii) Such plan, and subsequent modifications
submitted under clause (v), shall be approved by the
Business Opportunity Specialist prior to the program
participant being eligible for award of a contract
pursuant to this subsection.
``(iv) The plans submitted under this subparagraph
shall include the following:
``(I) An analysis of market potential,
competitive environment, and other business
analyses estimating the program participant's
prospects for profitable operations during the
term of program participation and after
graduation.
``(II) An analysis of the program
participant's strengths and weaknesses with
particular attention to correcting any
financial, managerial, technical, or personnel
conditions which are likely to impede the
program participant from receiving contracts
other than those awarded under this section.
``(III) Specific targets, objectives, and
goals, for the business development of the
program participant during the next and
succeeding years utilizing the results of the
analyses conducted pursuant to subclauses (I)
and (II).
``(IV) A transition management plan
outlining specific steps to assure profitable
business operations after graduation (to be
incorporated into the program participant's
plan during the first year of the transitional
stage of program participation).
``(V) Estimates of contract awards pursuant
to this subsection 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.
``(v) 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 District Director for approval. The currently
approved plan shall be considered valid until such time
as a modified plan is reviewed by the Business
Opportunity Specialist and approved by the District
Director.
``(vi) Annual reviews pertaining to years in the
transitional stage of program participation shall
require, as appropriate, a written verification that
such program participant has complied with the
requirements of paragraph (21)(G) of this section
relating to attaining business activity from sources
other than contracts awarded pursuant to this section.
``(vii) Each program participant shall annually
forecast its needs for contract awards under this
section for the next program year and the succeeding
program year during the review of its business plan,
conducted pursuant to clause (v). 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 this section,
reflecting compliance with the requirements of
paragraph (21)(G) relating to attaining
business activity from sources other than
contracts awarded pursuant to this section,
``(II) the types of contract opportunities
being sought, identified by North American
Industrial Classification System Code or
otherwise,
``(III) an estimate of the dollar value of
the section 8(a) contract support level to be
sought on a competitive basis, and
``(IV) such other information as may be
requested by the Business Opportunity
Specialist to provide effective business
development assistance to the program
participant.
``(C) Conditions for denial of assistance.--A
program participant shall be denied all such assistance
if such concern--
``(i) voluntarily elects not to continue
participation;
``(ii) completes the period of Program
participation as prescribed by paragraph
(21)(A); and
``(iii) is terminated or graduated pursuant
to proceedings conducted in accordance with
paragraph (10).
``(D) Termination defined.--For purposes of this
subsection, the term `terminated' and the term
`termination' means the total denial or suspension of
assistance under this paragraph or under this section
prior to the graduation of the program participant or
prior to the expiration of the maximum program
participation term. An action for termination shall be
based upon good cause, including--
``(i) the failure by such concern to
maintain its eligibility for program
participation;
``(ii) the failure of the concern to engage
in business practices that will promote its
competitiveness within a reasonable period of
time as evidenced by, among other indicators, a
pattern of unjustified delinquent performance
or terminations for default with respect to
contracts awarded under the authority of this
subsection;
``(iii) a demonstrated pattern of failing
to make required submissions or responses to
Administration officials or employees in a
timely manner;
``(iv) the willful violation of any rule or
regulation of the Administrator pertaining to
material issues;
``(v) the debarment of the concern or its
disadvantaged owners by any agency pursuant to
subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation); or
``(vi) the conviction of the disadvantaged
owner or an officer of the concern for any
offense indicating a lack of business integrity
including any conviction for embezzlement,
theft, forgery, bribery, falsification or
violation of section 16. For purposes of this
clause, no termination action shall be taken
with respect to a disadvantaged owner solely
because of the conviction of an officer of the
concern (who is other than a disadvantaged
owner) unless such owner conspired with,
abetted, or otherwise knowingly acquiesced in
the activity or omission that was the basis of
such officer's conviction.
``(E) Initiation of termination proceeding.--(i)
The District Director may initiate a termination
proceeding by recommending such action to the Assistant
Administrator for Minority Small Business and Capital
Ownership Development.
``(ii) Whenever the Assistant Administrator
determines such termination is appropriate, within 15
days after making such a determination the program participant shall be
provided a written notice of intent to terminate, specifying the
reasons for such action.
``(iii) No program participant shall be terminated
from the program pursuant to subparagraph (D) without
first being afforded an opportunity for a hearing in
accordance with paragraph (10).
``(iv) If a termination proceeding is initiated
against a program participant, such participant shall
be ineligible from receiving assistance pursuant to
this section until the final disposition of the
termination action.
``(v) If the program participant is reinstated upon
final decision by the Administrator pursuant to
paragraph (10), the time during which the program
participant did not receive assistance shall be added
on to the original program term end date.
``(F) Graduation defined.--For the purposes of this
subsection and subsection 8(b) the term `graduated' or
`graduation' means that the program participant is
recognized as successfully completing the program by
substantially achieving the targets, objectives, and
goals contained in the concern's business plan thereby
demonstrating its ability to compete in the marketplace
without assistance under this section.
``(G) Business activity targets.--(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 this subsection
(hereinafter referred to as `business activity
targets.').
``(ii) Such efforts shall be made a part of the
business plan and shall be sufficient in scope and
duration to satisfy the Administrator that the program
participant will engage in a reasonable marketing
strategy that will maximize its potential to achieve
its business activity targets.
``(iii) During the transitional stage of the
program a program participant shall be subject to
regulations regarding business activity targets that
are promulgated by the Administrator. Such regulations
shall:
``(I) Establish business activity targets
applicable to program participants during the
fifth year and each succeeding year of program
participation.
``(aa) Such activity targets shall,
for such period of time, reflect a
reasonably consistent increase in
contracts awarded other than pursuant
to this subsection, expressed as a
percentage of total sales.
``(bb) The Administrator may
establish modified business activity
targets for program participants that
have participated in the program for a
period of longer than 5 years on the
date of the enactment of this Act.
``(II) Require the program participant to
certify that it has met its business activity
targets or that it is in compliance with such
remedial measures as may have been ordered
pursuant to regulations issued under subclause
(III) prior to the receipt of any contract
awarded pursuant to this subsection.
``(III) Authorize the Administrator 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
this section.
``(aa) Such remedial actions may
include 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 this subsection.
``(bb) Unless the remedial measures
taken pursuant to subclause (aa) bar
the award of contracts to program
participants, no remedial measures
shall be reviewable pursuant to
paragraph (10).
``(H) Eligibility review.--(i) The Administrator
shall conduct an evaluation of a program participant's
eligibility for continued participation in the program
whenever it receives specific and credible information
alleging that such program participant no longer meets
the requirements for program eligibility.
``(ii) Upon making a finding that a program
participant is no longer eligible, the Administrator
shall initiate a termination proceeding in accordance
with subparagraphs (D) and (E).
``(iii) A program participant's eligibility for
award of any contract under the authority of this
section may be suspended pursuant to subpart 9.4 of
title 48, Code of Federal Regulations (or any successor
regulation).
``(22) Certification and review by administrator.--
``(A) Assistant administrator coordination.--The
Assistant Administrator for Minority Small Business and
Capital Ownership Development shall be responsible for
coordinating and formulating policies relating to
Federal assistance to small business concerns eligible
for assistance under section 7(i) of this Act and
program participants.
``(B) Division of program certification and
eligibility.--(i) There is established a Division of
Program Certification and Eligibility (hereinafter
referred to in this paragraph as the `Division') in the
Office of Minority Small Business and Capital Ownership
Development. The Division shall be headed by a Director
who shall report directly to the Assistant
Administrator for Minority Small Business and Capital
Ownership Development. The Division shall establish
field offices within such regional offices of the
Administration as may be necessary to perform
efficiently its functions and responsibilities.
``(ii) Subject to the provisions of paragraph
(5)(B), the functions and responsibility of the
Division of Program Certification and Eligibility are
to--
``(I) receive, review and evaluate
applications for certification pursuant to
paragraphs (5), (6), and (7);
``(II) advise each program applicant within
15 days after the receipt of an application as
to whether such application is complete and
suitable for evaluation and, if not, what
matters must be rectified;
``(III) render recommendations on such
applications to the Assistant Administrator for
Minority Small Business and Capital Ownership
Development;
``(IV) review and evaluate financial
statements and other submissions from concerns
participating in the program established by
this subsection to ascertain continued
eligibility to receive subcontracts pursuant to
this section;
``(V) make a request for the initiation of
termination or graduation proceedings, as
appropriate, to the Assistant Administrator for
Minority Small Business and Capital Ownership
Development;
``(VI) make recommendations to the
Assistant Administrator for Minority Small
Business and Capital Ownership Development
concerning protests from applicants that have
been denied program admission;
``(VII) decide protests regarding the
status of a concern as a disadvantaged concern
for purposes of any program or activity
conducted under the authority of subsection
(d), or any other provision of Federal law that
references such subsection for a definition of
program eligibility; and
``(VIII) implement such policy directives
as may be issued by the Assistant Administrator
for Minority Small Business and Capital
Ownership Development pursuant to subparagraph
(E) regarding, among other things, the
geographic distribution of concerns to be
admitted to the program and the industrial
make-up of such concerns.
``(C) Program admission and contract
opportunities.--An applicant shall not be denied
admission into the program established by this
subsection due solely to a determination by the
Division of Program Certification and Eligibility that
specific contract opportunities are unavailable to
assist in the development of such concern unless--
``(i) the Government has not previously
procured and is unlikely to procure the types
of products or services offered by the concern
on a prime contract basis; or
``(ii) the purchases of such products or
services by the Federal Government will not be
in quantities sufficient to support the
developmental needs of the applicant and other
program participants providing the same or
similar items or services.
``(D) Certification decision.--Except as provided
in paragraph 5(B), not later than 90 days after receipt
of a completed application for program certification,
the Assistant Administrator for Minority Small Business
and Capital Ownership Development shall certify a small
business concern as a program participant or shall deny
such application.
``(E) Division review.--
``(i) Thirty days before the conclusion of
each fiscal year, the Director of the Division
of Program Certification and Eligibility shall
review all concerns that have been admitted
into the program during the preceding 12-month
period.
``(ii) The review shall ascertain the
number of entrants, their geographic
distribution, and their industrial
classification. The Director shall also
estimate the expected growth of the program
during the next fiscal year and the number of
additional Business Opportunity Specialists, if
any, that will be needed to meet the
anticipated demand for the program.
``(iii) The findings and conclusions of the
Director shall be reported to the Assistant
Administrator for Minority Small Business and
Capital Ownership Development by September 30
of each year.
``(iv) Based on such report and such
additional data as may be relevant, the
Assistant Administrator shall, by October 31 of
each year, issue rules as that term is defined
in section 551(4) of title 5, United States
Code, applicable to such fiscal year that--
``(I) establish priorities for the
solicitation of program applications
from underrepresented regions and
industry categories;
``(II) assign staffing levels and
allocate other program resources as
necessary to meet program needs; and
``(III) establish priorities in the
processing and admission of new program
participants as may be necessary to
achieve an equitable geographic
distribution of concerns and a
distribution of concerns across all
industry categories in proportions
needed to increase significantly
contract awards to small business
concerns owned and controlled by
socially and economically disadvantaged
individuals. When considering such
increase the Administrator 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.
``(23) Stages of program participation.--
``(A) In general.--The Capital ownership
Development Program established by this subsection
shall have a developmental stage and transitional
stage.
``(B) Developmental stage.--The developmental stage
of program participation shall be designed to assist
the concern in its effort to overcome its economic
disadvantage by providing such assistance as may be
necessary and appropriate to access its markets and to
strengthen its financial and managerial skills.
``(C) Transitional stage.--The transitional stage
of program participation shall be designed to overcome,
insofar as practicable, the remaining elements of economic disadvantage
and to prepare such concern for graduation from the program.
``(24) Types of assistance provided by the administrator.--
The Administrator shall make available during the developmental
and transitional stages the following assistance:
``(A) Contract support pursuant to this section.
``(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 to provide conditions for the purchase of supplies
and the making of contracts by the United States, and
for other purposes', approved June 30, 1936 (popularly
known as the `Walsh-Healey Act'; 41 U.S.C. 35(a)),
which exemptions shall apply only to contracts awarded
pursuant to this section 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.
``(D)(i) Financial assistance whereby the
Administrator may purchase in whole or in part, and on
behalf of such concerns, skills training or upgrading
for employees or potential employees of such concerns.
``(ii) 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
title I of the Workforce Investment Act of 1998.
``(iii) Assistance may be made by direct payment to
the training provider or by reimbursing the program
participant or the participant's employee, if such
reimbursement is found to be reasonable and
appropriate.
``(iv) The Administrator shall, in consultation
with the Secretary of Labor, promulgate rules and
regulations to implement this subparagraph that
establish acceptable training and upgrading performance
standards and provide for such monitoring or audit
requirements as may be necessary to ensure the
integrity of the training effort.
``(v) No financial assistance shall be granted
under this subparagraph unless the Administrator
determines each of the following:
``(I) The program participant has
documented that it has first explored the use
of existing cost-free or cost-subsidized
training programs offered by public and private
sector agencies working with programs of
employment and training and economic
development.
``(II) No more than 5 employees or
potential employees of the program participant
are recipients of any benefits under this
subparagraph at any one time.
``(III) No more than $2,500 shall be made
available for any one employee or potential
employee.
``(IV) The length of training or upgrading
financed by this subparagraph shall be no less
than 1 month nor more than 6 months.
``(V) The program participant has given
adequate assurance it will employ the trainee
or upgraded employee for at least 6 months
after the training or upgrading financed by
this subparagraph has been completed and each
trainee or upgraded employee has provided a
similar assurance to remain within the employ
of such concern for such period.
``(aa) If such concern, trainee, or
upgraded employee breaches this
agreement, the Administrator shall be
entitled to obtain from the violating
party the repayment of all funds
expended on behalf of the violating
party.
``(bb) Such repayment shall be made
to the Administrator together with such
interest and costs of collection as may
be reasonable.
``(cc) The violating party shall be
barred from receiving any further
assistance under this subparagraph.
``(VI) The training to be financed may take
place either at such concern's facilities or at
those of the training provider.
``(VII) The program participant will
maintain such records as the Administrator
deems appropriate to ensure that the provisions
of this paragraph and any other applicable law
have not been violated.
``(E)(i) The transfer of technology or surplus
property owned by the United States to such a concern.
``(ii) Activities designed to effect such transfer
shall be developed in cooperation with the heads of
Federal agencies and shall include the transfer by
grant, license, or sale of such technology or property
to such a concern. Such property may be transferred to
program participants on a priority basis.
``(iii) Technology or property transferred under
this subparagraph shall be used by the concern during
the normal conduct of its business operation and shall
not be sold or transferred to any other party (other
than the Government) during such concern's term of
participation in the program and for one year
thereafter.
``(F) Training assistance whereby the Administrator
shall conduct training sessions to assist individuals
and enterprises eligible to receive contracts under
this section in the development of business principles and strategies
to enhance their ability to successfully compete for contracts in the
marketplace.
``(G) Joint ventures, leader-follow arrangements,
and teaming agreements between the program participant
and other program participants and other small business
concerns with respect to contracting opportunities.
Such activities shall be undertaken on the basis of
programs developed by the procuring agency with the
assistance of the Administration.
``(H) Transitional management business planning
training and technical assistance.
``(25) Transitional stage assistance.--Program participants
in the developmental stage of program participation shall be
eligible for the assistance provided by subparagraphs (A), (B),
(C), (D), (E), (F), and (G) of paragraph (24).
``(26) Developmental stage assistance.--Program
Participants in the transitional stage of Program participation
shall be eligible for the assistance provided by subparagraphs
(A), (B), (F), (G), and (H) of paragraph (24).
``(27) Duration of stages.--Subject to the provisions of
paragraph (21)(A), a program participant may receive
developmental assistance under this subsection and contracts
under this subsection for a total period of not longer than 9
years, measured from the date of its certification under this
subsection, of which--
``(A) no more than 5 years may be spent in the
developmental stage of program participation; and
``(B) no more than 4 years may be spent in the
transitional stage of program participation.
``(28) Data collection.--
``(A) In general.--The Administrator shall develop
and implement a process for the systematic collection
of data on the operations of the program established
pursuant to this section.
``(B) Report.--Not later than April 30 of each
year, the Administrator shall submit a report to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House
of Representatives on the program that shall include
the following:
``(i) A description and estimate of the
benefits and costs that have accrued to the
economy and the Government in the immediately
preceding fiscal year due to the operations of
those business concerns that were performing
contracts awarded pursuant to this section.
``(ii) A compilation and evaluation of
those business concerns that have exited the
program during the immediately preceding three
fiscal years. Such compilation and evaluation
shall detail the number of concerns actively
engaged in business operations, those that have
ceased or substantially curtailed such
operations, including the reasons for such
actions, and those concerns that have been
acquired by other firms or organizations owned
and controlled by other than socially and
economically disadvantaged individuals.
``(iii) For those businesses that have
continued operations after they exited from the
program, the Administrator shall also
separately detail the benefits and costs that
have accrued to the economy during the
immediately preceding fiscal year due to the
operations of such concerns.
``(iv) A listing of all participants in the
program during the preceding fiscal year
identifying, by State and by region, for each
firm: the name of the concern, the race or
ethnicity, and gender of the disadvantaged
owners, the dollar value of all contracts
received in the preceding year, the dollar
amount of advance payments received by each
concern pursuant to contracts awarded under
this section, and a description including (if
appropriate) an estimate of the dollar value of
all benefits received pursuant to paragraphs
(25) and (26) 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 this section and such amount
expressed as a percentage of total sales of--
``(I) all firms participating in
the program during such year; and
``(II) 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 2-year period to service
the expected portfolio of firms certified
pursuant to this section.
``(vii) The total dollar value of contracts
and options awarded pursuant to this section,
at such dollar increments as the Administrator
deems appropriate, for each 6 digit North
American Industrial Classification System code
under which such contracts and options were
classified.
``(b) Management and Technical Assistance.--
``(1) Contracts for assistance.--The Administrator shall be
required to enter into contracts with business concerns, not-
for-profit entities, and other persons capable of providing
management and technical assistance, as may be necessary, to
participants in the program established in subsection (a), to
firms described in paragraph (5) or paragraph (6) of that
subsection but are not participants in the program established
pursuant to that subsection, and to small business concerns
which have loans guaranteed pursuant to section 7(i).
``(2) Selection of contractors.--The Administrator shall
select contractors based on the experience in advising small
business concerns on financial and business operations,
including but not limited to comprehensive business plans, and
other functions needed to preserve and expand small businesses
eligible for assistance under paragraph (1). To the extent
practical, the Administrator shall select, as contractors,
small business concerns but the primary evaluation criteria
shall be the technical ability of the contractor to provide the
services set forth in this subsection.
``(3) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$6,000,000 for each of fiscal years 2004 and 2005. Such sums
shall remain available until expended.
``(c) Coordination With Other Agencies.--The Administrator shall
take such steps as may be necessary and appropriate, in coordination
and cooperation with the heads of Federal agencies to insure that
contracts, subcontracts, and deposits made by the Federal Government or
with programs aided with Federal funds are placed in such way as to
further the purposes of subsection (a) of this section and section
7(i).''.
(b) Commercial Marketing.--Section 8(d)(10) of the Small Business
Act (15 U.S.C. 637(d)(10)) is amended to read as follows:
``(10) In the case of contracts within the provisions of
paragraphs (4), (5), and (6), the Administrator is authorized
to--
``(A) assign at least one commercial marketing
representative per state whose primary responsibilities
shall be to--
``(i) assist Federal agencies and
businesses in complying with their
responsibilities under the provisions of this
subsection, including the formulation of
subcontracting plans pursuant to paragraph (4);
``(ii) review any solicitation for any
contract to be let pursuant to paragraphs (4)
and (5) to determine the maximum practicable
opportunity for small business concerns, small
manufacturers, small business concerns owned
and controlled by veterans, small business
concerns owned and controlled by service-
disabled veterans, qualified HUBZone small
business concerns, small business concerns
owned and controlled by socially and
economically disadvantaged individuals, small
business concerns eligible for participation
under section 8(a), 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;
``(iii) evaluate compliance with
subcontracting plans, either on a contract-by-
contract basis, or in the case of contractors
having multiple contracts, on an aggregate
basis including recommendations to the
contracting officer for an assessment of
liquidated damages;
``(iv) work directly with small businesses
to counsel them on marketing and subcontracting
to large business prime contractors that have
contracts with the Federal Government;
``(v) identify large business buyers of
small business products and services;
``(vi) assist small businesses in receiving
timely payment from large business prime
contractors that have contracts with the
Federal Government; and
``(vii) perform program reviews of the
small business outreach programs and
subcontracting programs of large businesses.
``(B) Not later than September 30, 2004, each state
shall be assigned at least one commercial marketing
representative, authorized by paragraph 10(A) of this
section, who must be physically located in each state.
``(C) Not later than 120 days after enactment of
this Act, the Administrator shall, after the
opportunity for notice and comment, promulgate
regulations governing the Administrator's review of
subcontracting plans including the standards for
determining good faith effort of compliance with the
subcontracting plans.''.
(c) Women-Owned Small Business Concerns; Authorities of
Administrator.--Subsections (m) and (n) of section 8 of the Small
Business Act (15 U.S.C. 637 (m) and (n)) are amended to read as
follows:
``(m) Procurement Program for Women-Owned Small Business
Concerns.--
``(1) Definitions.--In this subsection, the following
definitions apply:
``(A) Small business concern owned and controlled
by women.--The term `small business concern owned and
controlled by women' has the meaning given such term in
section 3(n), except that ownership shall be determined
without regard to any community property law.
``(2) Authority to restrict competition.--In accordance
with this subsection, a contracting officer may restrict
competition for any contract for the procurement of goods or
services by the Federal Government to small business concerns
owned and controlled by women, if--
``(A) each of the concerns is not less than 51
percent owned by 1 or more women who are economically
disadvantaged (and such ownership is determined without
regard to any community property law);
``(B) the contracting officer has a reasonable
expectation that 2 or more small business concerns
owned and controlled by women will submit offers for
the contract;
``(C) the contract is for the procurement of goods
or services with respect to an industry identified by
the Administrator pursuant to paragraph (4);
``(D) the anticipated award price of the contract
(including options) does not exceed--
``(i) $5,000,000, in the case of a contract
assigned an industrial classification code for
manufacturing; or
``(ii) $3,000,000, in the case of all other
contracts;
``(E) in the estimation of the contracting officer,
the contract award can be made at a fair and reasonable
price; and
``(F) each of the concerns--
``(i) is certified by a Federal agency or a
State government as a small business concern
owned and controlled by women;
``(ii) is certified by a national
certifying entity approved by the Administrator
as a small business concern owned and
controlled by women; or
``(iii) certifies to the contracting
officer that it is a small business concern
owned and controlled by women and provides
adequate documentation in accordance with
standards established by the Administration 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
underrepresented.
``(4) Identification of industries.--
``(A) In general.--The Administrator shall conduct
a study to identify industries in which small business
concerns owned and controlled by women are
underrepresented with respect to Federal procurement
contracting.
``(B) Determination by contracting officer.--Until
such time as the Administrator conducts such study, the
determination as to whether an industry is under-
represented by small business concerns owned and
controlled by women shall be made by the contracting
officer.
``(C) Deadline.--Not later than 90 days after the
date of the enactment of this subparagraph the
Administrator shall--
``(i) ensure the completion of the study
described in this paragraph;
``(ii) approve national certifying entities
for the purposes of paragraph (2)(F)(ii); and
``(iii) make determinations in accordance
with paragraph (3).
``(5) Enforcement; penalties.--
``(A) Verification of eligibility.--In carrying out
this subsection, the Administrator shall use existing
procedures established by the Office of Hearings and
Appeals relating to--
``(i) the filing, investigation, and
disposition by the Administrator of any
challenge to the eligibility of a small
business concern to receive assistance under
this subsection (including a challenge, filed
by an interested party, relating to the
veracity of a certification made or information
provided to the Administration by a small
business concern under paragraph (2)(F)); and
``(ii) verification by the Administrator of
the accuracy of any certification made or
information provided to the Administration by a
small business concern under paragraph (2)(F).
``(B) Examinations.--The procedures established
under subparagraph (A) may provide for program
examinations (including random program examinations) by
the Administrator of any small business concern making
a certification or providing information to the
Administrator under paragraph (2)(F).
``(C) Penalties.--In addition to the penalties
described in section 16(d), any small business concern
that is determined by the Administrator to have
misrepresented the status of that concern as a small
business concern owned and controlled by women for
purposes of this subsection, shall be subject to--
``(i) section 1001 of title 18, United
States Code; and
``(ii) sections 3729 through 3733 of title
31, United States Code.
``(6) Provision of data.--Upon the request of the
Administrator, the head of any Federal department or agency
shall promptly provide to the Administrator such information as
the Administrator determines to be necessary to carry out this
subsection.
``(n) Authorities of Administrator.--In carrying out its functions
under subsections 7(i), 8(a), and 8(b) of this Act the Administrator
may do the following:
``(1) Utilize, with their consent, the services and
facilities of Federal agencies without reimbursement, and, with
the consent of any State or political subdivision of a State,
accept and utilize the services and facilities of such State or
subdivision without reimbursement.
``(2) Accept voluntary and uncompensated services,
notwithstanding section 1342 of title 31, United States Code.
``(3) Employ experts and consultants or organizations
pursuant to the authority in section 6(h). No individual may be
employed under the authority of this paragraph for more than
100 days in any fiscal year. No individual employed under this
paragraph may be compensated at rates in excess of the daily
equivalent of the highest rate payable under section 5332 of
title 5, United States Code, including traveltime. Individuals
employed under this paragraph may be allowed, while away from
their homes or regular places of business, travel expenses
(including per diem in lieu of subsistence) as authorized by
section 5703 of title 5, United States Code for persons in
the Government service employed intermittently. Contracts for
employment under this paragraph may be renewed annually.''.
(d) Clerical Amendment.--Section 8 of the Small Business Act (15
U.S.C. 637) is amended by striking ``Sec. 8.'' inserting the following:

``SEC. 8. GOVERNMENT CONTRACT AND BUSINESS DEVELOPMENT ASSISTANCE FOR
SMALL BUSINESS CONCERNS, ETC.''.

SEC. 209. TRAINING AND ASSISTANCE.

Section 12 of the Small Business Act (15 U.S.C. 641) is amended to
read as follows:

``SEC. 12. TRAINING AND ASSISTANCE.

``(a) Assistance.--The Administrator shall (through co-
sponsorships, small business development centers, women's business
centers, the Office of Veterans Affairs, and other programs as the
Administrator determines appropriate) provide technical and managerial
assistance, advice and guidance on matters of government procurement
(at the Federal, State, and local levels) and information on the
policies, practices, and principles of good management, and, when
appropriate, distribute publications and other material on
Administration programs to small business concerns, including all
categories of such concerns defined in section 3 of this Act.
``(b) Volunteers.--
``(1) The Administrator shall recruit executive volunteers
to assist the Administrator in carrying out this section.
``(2) The Administrator shall recruit retired and active
executives to form the Service Corps of Retired Executives and
the Active Corps of Executives. Such executives will be
responsible for providing technical and managerial assistance
and advice to small business concerns.
``(3) The Administrator shall recruit retired and active
executives from large and small manufacturers to form the
Service Corps of Retired Manufacturing Executives and the
Active Corps of Manufacturing Executives. Such executives will
advise, assist, and train small manufacturers.
``(4) The Administrator may enter into appropriate
contracts, grants, or cooperative agreements with the
volunteers or corps referred to in this subsection in order to
provide the services set forth in this section.
``(5) The Administrator may maintain the headquarters of
the corps referred to in this subsection and assign, at his
discretion, Administration personnel to assist the volunteers.
``(6) The volunteers may solicit cash, other personal
property, and in-kind contributions from the private sector to
be used to carry out their functions under this section. The
volunteers may use payments from the Administrator made
pursuant to this subsection to assist in such solicitations.
``(7) The Administrator may permit any individual or group
of persons participating in the programs established pursuant
to this subsection to use any facilities of the Administration,
including regional and district offices, as well as clerical
and computer services.
``(8) The volunteers, while carrying out the purposes of
this section, shall be deemed Federal employees for the
purposes of the Federal tort claims provisions in title 28,
United States Code; and for the purposes of subchapter I of
chapter 81 of title 5, United States Code (relative to
compensation to Federal employees for work injuries) shall be
deemed civil employees of the United States within the meaning
of the term `employee' as defined in section 8101 of title 5,
United States Code, and the provisions of that subchapter shall
apply except that in computing compensation benefits for
disability or death, the monthly pay of a volunteer shall be
deemed that received under the entrance salary for a grade GS-
11 employee.
``(9) The Administrator may reimburse the volunteers for
all necessary out-of-pocket expenses incident to their
provision of services under this section, or in connection with
attendance at meetings sponsored by the Administrator, or for
the cost of malpractice insurance, as the Administrator shall
determine, in accordance with regulations which he or she shall
prescribe, and, while they are carrying out such activities
away from their homes or regular places of business, for travel
expenses (including per diem in lieu of subsistence) as
authorized by section 5703 of title 5, United States Code, for
individuals serving without pay.
``(10) None of the services made available by volunteers
pursuant to this subsection shall be made available to any
person or small business concern who is delinquent on a loan
made pursuant to section 7 of this Act or Title V of the Small
Business Investment Act of 1958 unless such assistance relates
solely to addressing the matter of the delinquency and a
specific request is made in writing to the volunteer (and a
record of such communication is maintained by the volunteer).
``(11) No payment for supportive services or reimbursement
of out-of-pocket expenses made to persons serving pursuant to
this subsection shall be subject to any tax or charge or be
treated as wages or compensation for the purposes of
unemployment, disability, retirement, public assistance, or
similar benefit payments, or minimum wage laws.
``(12) Under regulations which the Administrator shall
prescribe, counsel may be employed and counsel fees, court
costs, bail, and other expenses incidental to the defense of
volunteers may be paid in judicial or administrative
proceedings arising directly out of the performance of
activities pursuant to this subsection to which volunteers have
been made parties.
``(c) Small Business Institutes.--In carrying out its functions
under this section, the Administrator may make grants (including
contracts or cooperative agreements) to any public or private
institution of higher education for the establishment and operation of
a small business institute, which shall be used to provide business
counseling and assistance to small business concerns through the
activities of students enrolled at the institution, which students
shall be entitled to receive educational credits for their activities.
To the extent practicable, the Administrator shall select applicants
that demonstrate the best capability of serving small manufacturers.
``(d) Business Grants and Cooperative Agreements.--
``(1) In general.--In accordance with this subsection, the
Administrator may make grants to and enter into cooperative
agreements with any coalition of private entities, public
entities, or any combination of private and public entities--
``(A) to expand business-to-business relationships
between large and small businesses by--
``(i) identifying opportunities for small
business concerns located in areas of high
unemployment or low income;
``(ii) assisting small business concerns
and small manufacturers in finding
opportunities to supply goods and services to
other businesses, particularly large businesses
that have previously obtained such goods and
services from businesses located outside of the
United States; and
``(iii) providing such other assistance as
the Administrator may identify;
``(B) to maintain a database, to the extent
practicable, of supply chain management opportunities
for small business concerns and small manufacturers;
``(C) 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; and
``(D) by providing businesses with information on
the best practices used by other business concerns in
establishing mentor-protege or other business
development programs and not limited solely to
procurement by Federal, State, or local governments.
``(2) Matching requirement.--The Administrator may make a
grant to a coalition under paragraph (1) only if the coalition
provides for activities described in paragraph (1) an amount,
either in kind or in cash, equal to the grant amount.
``(3) Definitions.--For purposes of this subsection, the
term `supply chain' means a network of facilities and
distribution options that performs the functions of procurement
of materials, transformation of these materials into
intermediate and furnished products, and distribution of the
finished products to customers.
``(4) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $10,000,000, to
remain available until expended, for each of fiscal years 2004
through 2005.''.

SEC. 210. CONTRACTING ASSISTANCE; ETC.

(a) Certain Disagreements Submitted to OMB.--Section 15(a) of the
Small Business Act (15 U.S.C. 644(a)) is amended by striking the
sentence beginning ``Whenever the Administrator and the contracting
procurement agency fail to agree,'' and inserting the following:
``Whenever the Administration and the contracting procurement agency
fail to agree, the Administrator shall submit the matter to the
Director of the Office of Management and Budget, who shall render his
decision regarding the matter not later than 10 days after receiving
the matter. The Director may not delegate his duties under the
preceding sentence except to a subordinate official within the Office
of Management and Budget appointed by the President, by and with the
advice and consent of the Senate.''.
(b) Programs for Blind and Handicapped Individuals.--Section 15(c)
of the Small Business Act (15 U.S.C. 644(c)) is amended to read as
follows:
``(c) Programs for Blind and Handicapped Individuals.--
``(1) As used in this subsection:
``(A) The term `Committee' means the Committee for
Purchase From People Who Are Blind or Severely Disabled
established under the first section 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. 46).
``(B) The term `public or private organization for
the disabled' means any organization--
``(i) which is organized under the laws of
the United States or of any State, operated in
the interest of disabled 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 prescribed by
the Secretary of Labor; and
``(iii) which in the production of
commodities and in the provision of services
during any fiscal year employs disabled
individuals for not less than 75 percent of the
man-hours required for the production or
provision of the commodities or services.
``(C) The term `disabled person' means any
individual who--
``(i) is a service-disabled veteran; or
``(ii) has a disability (as defined in
section 3 of the Americans with Disabilities
Act of 1990) which limits such individual's
selection of any type of employment for which
such individual would otherwise be qualified or
qualifiable.
``(2) The Administrator shall evaluate the placement of
products 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) to determine
the impact of such placement on for-profit small business
concerns.
``(3) The Administrator shall monitor and evaluate the
participation of public or private organizations for the
disabled in Federal procurement contracts and shall annually
report the results of such monitoring and evaluation to the
Committee on Small Business of the House of Representatives
and the Committee on Small Business and Entrepreneurship of the Senate
not later than March 31st of each year. This report shall include the
impact of such participation on for-profit small business concerns.
``(4)(A) Not later than 10 days after the announcement of a
proposed award of a contract by an agency or department to a
public or private organization for the disabled, a for-profit
small business concern that has experienced or is likely to
experience severe economic injury as the result of the proposed
award may file an appeal 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 30 days after the filing of the appeal,
the Administrator 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 include in its report the amount of the next highest
bid submitted by a for-profit small business concern. The
Office of Federal Procurement Policy shall collect data
reported under the preceding sentence through the Federal
procurement data system and shall report to the Administrator
who 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 purposes of this subsection, a contract may
be awarded only if at least 75 percent of the direct labor
performed on each item being produced under the contract in the
sheltered workshop or performed in providing each type of
service under the contract by the sheltered workshop is
performed by disabled individuals.
``(7) Agencies awarding one or more contracts to such an
organization pursuant to the provisions of this subsection may
use multiyear contracts, if appropriate.''.
(c) Minimum Solicitation Period.--Section 15(e) of the Small
Business Act (15 U.S.C. 644(e)) is amended by adding at the end the
following new paragraph:
``(5) Minimum solicitation period.--In the case of a
solicitation of offers for a bundled contract that is issued by
the head of an agency, small business concerns shall be allowed
to submit offers for a period of not less than 60 days
beginning on the date the solicitation is issued.''.
(d) Procurement Goals.--Section 15(g) of the Small Business Act (15
U.S.C. 644(g)) is amended to read as follows:
``(g)(1) The President shall before the close of each fiscal year
establish new Government-wide procurement goals for the following
fiscal year for procurement contracts awarded to small business
concerns, 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. The President shall not simply readopt the
preceding years procurement goals. The Government-wide goal for
participation by small business concerns shall be established at not
less than 23 percent of the total value of all prime contract awards
for each fiscal year. The Government-wide goal for participation by
small business concerns owned and controlled by service-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. The Government-wide 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 awards. The Government-wide
goal for participation by small business concerns owned and controlled
by socially and economically disadvantaged individuals shall be
established at not less than 5 percent of the total value of all prime
contract awards and not less than 5 percent of the total value of all
subcontract awards for each fiscal year. The Government-wide 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 awards and not less than 5 percent of the total
value of all subcontract awards for each fiscal year. Notwithstanding
the Government-wide goal, each agency shall have an annual goal that
presents, for that agency, the maximum practicable opportunity for
small business concerns, small manufacturers, 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, small business
concerns participating in the program established by section 8(a) of
this Act, and small business concerns owned and controlled by women to
participate in the performance of contracts let by such agency. For the
purposes of the preceding sentence, each agency is prohibited from
counting towards its procurement goal for small business concerns owned
and controlled by socially and economically disadvantaged individuals
any contract awarded to small business concerns participating in the
program established pursuant to section 8(a) of this Act. The
Administrator and the Administrator of the Office of Federal
Procurement Policy shall, when exercising their authority pursuant to
paragraph (2), insure that the cumulative annual prime contract goals
for all agencies meet or exceed the annual Government-wide prime
contract goal established by the President pursuant to this paragraph.
``(2) The head of each Federal agency shall, after consultation
with the Administrator, establish goals for the participation by small
business concerns, small manufacturers, 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, small business
concerns participating in the program established pursuant to section
8(a) of this Act, and small business concerns owned and controlled by
women in procurement contracts of such agency having a value of
$25,000 or more. For the purposes of the preceding sentence, each
agency is prohibited from counting towards its procurement goal for
small business concerns owned and controlled by socially and
economically disadvantaged individuals any contract awarded to small
business concerns participating in the program established pursuant to
section 8(a) of this Act. Goals established under this subsection shall
be jointly established by the Administrator and the head of each
Federal agency and shall realistically reflect the potential of small
business concerns, small manufacturers, 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, small business
concerns participating in the program established pursuant to section
8(a) of this Act, and small business concerns owned and controlled by
women to perform subcontracts under such contracts. For the purposes of
the preceding sentence, each agency is prohibited from counting towards
its procurement goal for small business concerns owned and controlled
by socially and economically disadvantaged individuals any contract
awarded to small business concerns participating in the program
established pursuant to section 8(a) of this Act. Whenever the
Administrator and the head of any Federal agency fail to agree on
established goals, the disagreement shall be submitted to the
Administrator of the Office of Federal Procurement Policy for final
determination. For the purpose of establishing goals under this
subsection, the head of each Federal agency shall make consistent
efforts to annually expand participation by small business concerns
from each industry category in procurement contracts of the agency,
including participation by 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, small business concerns
participating in the program established pursuant to section 8(a),
small business concerns owned and controlled by women, and small
manufacturers. For the purposes of the preceding sentence, each agency
is prohibited from counting towards its procurement goal for small
business concerns owned and controlled by socially and economically
disadvantaged individuals any contract awarded to small business
concerns participating in the program established pursuant to section
8(a) of this Act. The head of each Federal agency, in attempting to
attain such participation, shall consider--
``(A) contracts awarded as the result of unrestricted
competition; and
``(B) contracts awarded after competition restricted to
eligible small business concerns under this section and under
the program established under section 8(a).''.
(e) Reports.--Section 15(h) of the Small Business Act (15 U.S.C.
644(h)) is amended to read as follows:
``(h)(1) At the conclusion of each fiscal year, the head of each
Federal agency shall report to the Administrator on the extent of
participation by small business concerns, small manufacturers, small
business concerns owned and controlled by veterans (including service-
disabled veterans), qualified HUBZone small business concerns, small
business concerns owned and controlled by socially and economically
disadvantaged individuals, small business concerns participating in the
program established pursuant to section 8(a) of this Act, and small
business concerns owned and controlled by women in procurement
contracts of such agency. Such reports shall contain appropriate
justifications for failure to meet the goals established under
subsection (g) of this section. Additionally, such reports shall
contain sufficient justification if goals established for the most
recent fiscal year end were established lower than the same goals for
the previous fiscal year.
``(2) The Administrator shall annually compile and analyze the
reports submitted by the individual agencies pursuant to paragraph (1)
and shall submit them to the President and the Congress. The
Administrator's submission to the President shall include the
following:
``(A) The Government-wide goals for participation by small
business concerns, 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, small
business concerns participating in the program established
pursuant to section 8(a) of this Act, and small business
concerns owned and controlled by women and the performance in
attaining such goals.
``(B) The goals in effect for each agency and the agency's
performance in attaining such goals.
``(C) An analysis of any failure to achieve the Government-
wide goals or any individual agency goals and the actions
planned by such agency (and approved by the Administrator) to
achieve the goals in the succeeding fiscal year.
``(D) The number and dollar value of prime contracts
awarded to small business concerns, small manufacturers 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, small business concerns
participating in the program established pursuant to section
8(a) of this Act, and small business concerns owned and
controlled by women. For each agency and on a government-wide
basis, number and dollar value of contracts issued through--
``(i) noncompetitive negotiation;
``(ii) competition restricted to small business
concerns owned and controlled by socially and
economically disadvantaged individuals;
``(iii) competition restricted to small business
concerns participating in the program established by
section 8(a) of this Act;
``(iv) competition restricted to small business
concerns; and
``(v) unrestricted competitions.
``(E) The number and dollar value of subcontracts awarded
to small business concerns, small manufacturers, 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, small business concerns
participating in the program established pursuant to section
8(a) of this Act, and small business concerns owned and controlled by
women.
``(3) The President shall include the information required by
paragraph (2) in each annual report to the Congress on the state of
small business prepared pursuant to section 303(a) of the Small
Business Economic Policy Act of 1980 (15 U.S.C. 631b(a)).
``(4) For the purpose of this subsection, the term `small
disadvantaged business' means any small business concern that is
certified as a `small disadvantaged business' by the Administrator.''.
(f) Restricted Competition.--Section 15(j) of the Small Business
Act (15 U.S.C. 644(j)) is amended to read as follows:
``(j)(1) Each contract for the purchase of goods and services that
has an anticipated value greater than $2,500 but not greater than
$1,000,000 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 $1,000,000 under the
authority of section 8(a) 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.''.
(g) Assignment of Procurement Center Representatives.--Section
15(l) of the Small Business Act (15 U.S.C. 644(l)) is amended to read
as follows:
``(l)(1) The Administrator shall assign to each major procurement
center a procurement center representative with such assistance as may
be appropriate. The procurement center representative shall carry out
the activities described in paragraph (2), and shall be an advocate for
the breakout of items for procurement through full and open
competition, whenever appropriate, while maintaining the integrity of
the system in which such items are used, and an advocate for the use of
full and open competition, whenever appropriate, for the procurement of
supplies and services by such center. Any procurement center
representative assigned under this subsection shall be in addition to
the representative referred to in subsection (k)(6).
``(2) A procurement center representative is authorized to--
``(A) work directly with small businesses to counsel them
on the Federal market and contracting with the Federal
Government;
``(B) identify Federal agency buyers of small business
products and services;
``(C) attend any provisioning conference or similar
evaluation 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 respect to
such requirements to the members of such conference or session;
``(D) review, at any time, restrictions on competition
previously imposed on items through acquisition method coding
or similar procedures, and recommend to personnel of the
appropriate activity the prompt reevaluation of such
limitations;
``(E) review restrictions on competition arising out of
restrictions on the rights of the United States in technical
data, and, when appropriate, recommend that personnel of the
appropriate activity initiate a review of the validity of such
an asserted restriction;
``(F) obtain from any governmental source, and make
available to personnel of the appropriate activity, technical
data necessary for the preparation of a competitive
solicitation package for any item of supply or service
previously procured noncompetitively due to the unavailability
of such technical data;
``(G) have access to procurement records and other data of
the procurement center commensurate with the level of such
representative's approved security clearance classification;
and
``(H) receive unsolicited engineering proposals and, when
appropriate--
``(i) either--
``(I) conduct a value analysis of such
proposal to determine whether such proposal, if
adopted, will result in lower costs to the
United States without substantially impeding
legitimate acquisition objectives and forward
to personnel of the appropriate activity
recommendations with respect to such proposal;
or
``(II) forward such proposals without
analysis to personnel of the activity
responsible for reviewing such proposals and
who shall furnish the breakout procurement
center representative with information
regarding the disposition of any such proposal;
and
``(ii) review the systems that account for the
acquisition and management of technical data within the
procurement center to assure that such systems provide
the maximum availability and access to data needed for
the preparation of offers to sell to the United States
those supplies to which such data pertain which
potential offerors are entitled to receive.
``(3) A procurement center representative is authorized to appeal
the failure to act favorably on any recommendation 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 Administrator 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 procurement
center representative for the center to which such advisers are
assigned in carrying out the functions described in paragraph (2) and
the representatives referred to in subsection (k)(6).
``(5)(A) The procurement center representatives and technical
advisers assigned pursuant to this subsection shall be--
``(i) full-time employees of the Administration; and
``(ii) fully qualified, technically trained, and familiar
with the supplies and services procured by the major
procurement center to which they are assigned.
``(B) In addition to the requirements of subparagraph (A), each
procurement center representative, and at least one technical adviser
assigned to such representative, shall be an accredited engineer.
``(C) The Administrator shall establish personnel positions for
procurement representatives and advisers assigned pursuant to this
subsection which are classified at a grade level of the General
Schedule sufficient to attract and retain highly qualified personnel.
``(6) 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 other than
commercial items and which has the potential to incur significant
savings as the result of the placement of a procurement center
representative.
``(7)(A) At such times as the Administrator deems appropriate, the
procurement center representative shall conduct familiarization
sessions for contracting officers and other appropriate personnel of
the procurement center to which such representative is assigned. 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 subsection.
``(B) The 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 report shall detail the past and planned activities of the
representative and shall contain such recommendations for improvement
in the operation of the center as may be appropriate. The head of such
center shall personally receive such briefing and report and shall,
within sixty calendar days after receipt, respond, in writing, to each
recommendation made by such representative.''.
(h) Other Duties of Administrator.--Section 15 of the Small
Business Act (15 U.S.C. 644) is amended by adding at the end the
following new subsection:
``(q)(1) The Administrator shall obtain information as to methods
and practices which Government prime contractors utilize in letting
subcontracts and to take action to encourage the letting of
subcontracts by prime contractors to small business concerns and small
manufacturers at prices and on conditions and terms which are fair and
equitable.
``(2) The Administrator shall determine within any industry the
concerns, firms, persons, corporations, partnerships, cooperatives, or
other business enterprises which are to be designated as small business
concerns or small manufacturers for the purpose of effectuating the
provisions of this Act. To carry out this purpose the Administrator,
when requested to do so, shall issue in response to each such request
an appropriate certificate certifying an individual concern as a small
business concern or small manufacturer in accordance with criteria
expressed in this Act. Any such certificate shall be subject to
revocation when the concern covered thereby ceases to be a small
business concern or small manufacturer. Offices of the Government
having procurement or lending powers, or engaging in the disposal of
Federal property or allocating materials or supplies, or promulgating
regulations affecting the distribution of materials or supplies, shall
accept as conclusive the Administration's determination as to which
enterprises are to be designated as small business concerns or small
manufacturers, as authorized and directed under this paragraph.
``(3)(A) The Administration shall certify to Government procurement
officers, and officers engaged in the sale and disposal of Federal
property, with respect to all elements of responsibility, including,
but not limited to, capability, competency, capacity, credit,
integrity, perseverance, and tenacity, of any small business concern or
group of such concerns to receive and perform a specific Government
contract. A Government procurement officer or an officer engaged in the
sale and disposal of Federal property may not, for any reason specified
in the preceding sentence, preclude any small business concern or group
of such concerns from being awarded such contract without referring the
matter for a final disposition to the Administration.
``(B) If a Government procurement officer finds that an otherwise
qualified small business concern may be ineligible due to the
provisions of section 35(a) of the Act entitled `An Act to provide
conditions for the purchase of supplies and the making of contracts by
the United States, and for other purposes', approved June 30, 1936
(popularly known as the `Walsh-Healey Act'; 41 U.S.C. 35(a)), he shall
notify the Administration in writing of such finding. The
Administration shall review such finding and shall either dismiss it
and certify the small business concern to be an eligible Government
contractor for a specific Government contract or if it concurs in the
finding, forward the matter to the Secretary of Labor for final
disposition, in which case the Administration may certify the small
business concern only if the Secretary of Labor finds the small
business concern not to be in violation.
``(C) In any case in which a small business concern or group of
such concerns has been certified by the Administrator pursuant to (A)
or (B) to be a responsible or eligible Government contractor as to a
specific Government contract, the officers of the Government having
procurement or property disposal powers are directed to accept such
certification as conclusive, and shall let such Government contract to
such concern or group of concerns without requiring it to meet any
other requirement of responsibility or eligibility. Notwithstanding the
first sentence of this subparagraph, the Administrator may not
establish an exemption from referral or notification or refuse to
accept a referral or notification from a Government procurement officer
made pursuant to subparagraph (A) or (B) of this paragraph, but nothing
in this paragraph shall require the processing of an application for
certification if the small business concern to which the referral
pertains declines to have the application processed.
``(4) The Administrator shall obtain from any Federal department,
establishment, or agency engaged in procurement or in the financing of
procurement or production such reports concerning the letting of
contracts and subcontracts and the making of loans to business concerns
as it may deem pertinent in carrying out its functions under this Act.
``(5) The Administrator shall obtain from any Federal department,
establishment, or agency engaged in the disposal of Federal property
such reports concerning the solicitation of bids, time of sale, or
otherwise as it may deem pertinent in carrying out its functions under
this Act.
``(6) The Administrator shall obtain from suppliers of materials
information pertaining to the method of filling orders and the bases
for allocating their supply, whenever it appears that any small
business is unable to obtain materials from its normal sources.
``(7) The Administrator shall make studies and recommendations to
the appropriate Federal agencies to insure that a fair proportion of
the total purchases and contracts for property and services for the
Government be placed with small-business concerns, to insure that a
fair proportion of Government contracts for research and development be
placed with small-business concerns, to insure that a fair proportion
of the total sales of Government property be made to small-business
concerns, and to insure a fair and equitable share of materials,
supplies, and equipment to small-business concerns.
``(8) The Administrator shall 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.''.
(i) Priority of Small Business Procurement Preferences.--Section 15
of the Small Business Act (15 U.S.C. 644) is further amended by adding
at the end the following new subsection:
``(r) Priority of Small Business Procurement Preferences.--
``(1) In general.--A contracting officer may not make a
procurement from a source on the basis of a preference provided
under any provision of this Act referred to in paragraph (2)
unless the contracting officer has determined that such
procurement cannot be made on the basis of a preference
provided under another provision of this Act with a higher
priority under such subsection.
``(2) Order of priority.--For purposes of this subsection,
the following provisions of this Act are listed in order of
priority from highest to lowest:
``(A) Section 8(a).
``(B) Section 31(b)(2)(B).
``(C) Section 31(b)(2)(A).
``(D) Section 8(m).
``(3) Priority of certain other procurement preferences.--A
procurement may not be made from a source on the basis of a
preference provided under any provision of this Act referred to
in paragraph (2) if the procurement would otherwise by made
from a different source under section 4124 or 4125 of title 18,
United States Code, or 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).''.
(j) Procurement Program for Very Small Business Concerns.--Section
15 of the Small Business Act (15 U.S.C. 644) is further amended by
adding at the end the following new subsection:
``(s) Procurement Program for Very Small Business Concerns.--
``(1) Establishment.--The Administrator shall establish and
carry out a program in accordance with the requirements of this
subsection to provide improved access to Federal contract
opportunities for very small business concerns.
``(2) Procurement contracts.--
``(A) Identification of contracts.--The
Administrator shall identify procurement contracts of
Federal agencies for award under the program.
``(B) Contract awards.--Under the program
established pursuant to this subsection, the award of a
procurement contract of a Federal agency identified by
the Administrator pursuant to subparagraph (A) shall be
made by the agency to a very small business concern
selected, and determined to be responsible, by the
agency.
``(C) Competition.--All contract opportunities
offered for award under the program shall be awarded on
the basis of competition among very small business
concerns. A contracting officer may rely in good faith
on a written certification that a small business
concern is a very small business concern.
``(3) Financial assistance.--In order to assist very small
business concerns receiving contract awards under the program,
the Administrator shall establish a preauthorization program
for such concerns for the purpose of receiving financial
assistance under section 7(a).
``(4) Very small business concern.--For purposes of this
subsection, the term `very small business concern' means a
small business concern that has not more than 15 employees
and--
``(A) in the case of a small manufacturer, annual
gross receipts of not more than $2,000,000; or
``(B) in any other case, annual gross receipts of
not more than $500,000.
``(5) Regulations.--The Administrator shall--
``(A) issue proposed regulations to carry out this
subsection not later than 180 days after the date of
enactment of this subsection; and
``(B) issue final regulations to carry out this
subsection not later than 270 days after the date of
enactment of this subsection.''.
(k) Other Amendments to Section 15.--
(1) Section 15(e)(1) of the Small Business Act (15 U.S.C.
644(e)(1)) is amended by inserting ``in the following order''
after ``concerns''.
(2) Section 15(e)(4) of the Small Business Act (15 U.S.C.
644(e)(4)) is amended by striking ``bundled''.
(3) Section 15(k)(9) of the Small Business Act (15 U.S.C.
644(k)(9)) is amended by striking ``Administration'' and
inserting ``Administrator''.
(4) Section 15(p)(4)(A) of the Small Business Act (15
U.S.C. 644(p)(4)(A)) is amended by striking ``Administration''
and inserting ``Administrator''.

SEC. 211. AUTHORIZATION OF APPROPRIATIONS; ETC.

Section 20 of the Small Business Act (15 U.S.C. 631 note) is
amended to read as follows:

``SEC. 20. AUTHORIZATION OF APPROPRIATIONS; ETC.

``(a)(1) For fiscal year 2004 and each fiscal year thereafter,
there are authorized to be appropriated such sums as may be necessary
and appropriate, to remain available until expended, and to be
available solely--
``(A) to carry out the Small Business Development Center
Program under section 21, but not to exceed the annual funding
level, as specified in section 21(j)(7);
``(B) to pay the expenses of the National Small Business
Development Center Advisory Board, as provided in section
21(m)(1);
``(C) to pay the expenses of the information sharing
system, as provided in section 21(o);
``(D) to pay the expenses of the association referred to in
section 21(k) for conducting the certification program, as
provided in section 21(l); and
``(E) to pay the expenses of the Administration, including
salaries of examiners, for conducting examinations as part of
the accreditation program conducted by the association referred
to in section 21(l).
``(2)(A) Notwithstanding any other provision of law, the
Administrator shall enter into commitments for direct loans and to
guarantee loans, debentures, payment of rentals, or other amounts due
under qualified contracts and other types of financial assistance and
enter into commitments to purchase debentures and preferred securities
and to guarantee sureties against loss pursuant to programs under this
Act and the Small Business Investment Act of 1958, in the full amounts
provided by law subject only to--
``(i) the availability of qualified applications; and
``(ii) limitations contained in appropriations Acts.
``(B) Nothing in this paragraph authorizes the Administrator to
reduce or limit its authority to enter into such commitments.
``(3) Subject to approval in appropriations Acts, amounts
authorized for preferred securities, debentures or participating
securities under title III of the Small Business Investment Act of 1958
may be obligated in one fiscal year and disbursed or guaranteed in any
1 or more of the 4 subsequent fiscal years.
``(4) The amount of deferred participation loans authorized in this
section--
``(A) shall mean the net amount of the loan principal
guaranteed by the Administrator (and does not include any
amount which is not guaranteed); and
``(B) shall be available for a national program, except as
otherwise provided in section 7(a).
``(b) There are authorized to be appropriated to the Administration
for each fiscal year such sums as may be necessary to carry out the
provisions of this Act and the Small Business Investment Act of 1958.
There also are hereby authorized to be appropriated such sums as may be
necessary and appropriate for the carrying out of the provisions and
purposes, including administrative expenses, of sections 7(b) of this
Act; and there are authorized to be transferred from such sums as may
be necessary and appropriate for such administrative expenses.
``(c) Fiscal Year 2004.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 2004:
``(A) For the programs authorized by this Act, the
Administrator is authorized to make--
``(i) $70,000,000 in technical assistance
grants, as provided in section 7(m); and
``(ii) $100,000,000 in direct loans, as
provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administrator is authorized to make $22,000,000,000 in
deferred participation loans and other financings. Of
such sum, the Administration is authorized to make--
``(i) $16,000,000,000 in general business
loans as provided in section 7(a);
``(ii) $5,500,000,000 in financings as
provided in section 7(a)(13) of this Act and
section 504 of the Small Business Investment
Act of 1958; and
``(iii) $500,000,000 in loans as provided
in section 7(a)(21).
``(C) For the programs authorized by title III of
the Small Business Investment Act of 1958, the
Administrator is authorized to make--
``(i) $5,000,000,000 in purchases of
participating securities; and
``(ii) $4,000,000,000 in guarantees of
debentures.
``(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958,
the Administration is authorized to enter into
guarantees not to exceed $6,000,000,000, of which not
more than 50 percent may be in bonds approved pursuant
to section 411(a)(3) of that Act.
``(E) There is authorized to be appropriated
$7,000,000 to carry out section 12(b).
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to
the Administration for fiscal year 2004 such sums as
may be necessary to carry out this Act not elsewhere
provided for, including administrative expenses and
necessary loan capital for disaster loans pursuant to
section 7(b), and to carry out the Small Business
Investment Act of 1958, including salaries and expenses
of the Administration.
``(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2004--
``(i) no funds are authorized to be
provided to carry out the loan program
authorized by section 7(a)(21) except by
transfer from another Federal department or
agency to the Administration, unless the
program level authorized for general business
loans under paragraph (1)(B)(i) is fully
funded; and
``(ii) the Administrator may not approve
loans on behalf of the Administration or on
behalf of any other department or agency, by
contract or otherwise, under terms and conditions other than those
specifically authorized under this Act or the Small Business Investment
Act of 1958, except that he may approve loans under section 7(a)(21) of
this Act in gross amounts of not more than $1,250,000.
``(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
Administrator 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 section 7(m).
``(B) For the programs authorized by this Act, the
Administrator is authorized to make $23,000,000,000 in
deferred participation loans and other financings. Of
such sum, the Administration is authorized to make--
``(i) $16,500,000,000 in general business
loans as provided in section 7(a);
``(ii) $6,000,000,000 in financings as
provided in section 7(a)(13) of this Act and
section 504 of the Small Business Investment
Act of 1958; and
``(iii) $500,000,000 in loans as provided
in section 7(a)(21).
``(C) For the programs authorized by title III of
the Small Business Investment Act of 1958, the
Administration is authorized to make--
``(i) $5,500,000,000 in purchases of
participating securities; and
``(ii) $4,500,000,000 in guarantees of
debentures.
``(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958,
the Administration is authorized to enter into
guarantees not to exceed $6,000,000,000, of which not
more than 50 percent may be in bonds approved pursuant
to section 411(a)(3) of that Act.
``(E) There is authorized to be appropriated
$7,000,000 to carry out section 12(b).
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to
the Administration for fiscal year 2005 such sums as
may be necessary to carry out this Act not elsewhere
provided for, including administrative expenses and
necessary loan capital for disaster loans pursuant to
section 7(b), and to carry out the Small Business
Investment Act of 1958, including salaries and expenses
of the Administration.
``(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2005--
``(i) no funds are authorized to be
provided to carry out the loan program
authorized by section 7(a)(21) except by
transfer from another Federal department or
agency to the Administration, unless the
program level authorized for general business
loans under paragraph (1)(B)(i) is fully
funded; and
``(ii) the Administrator may not approve
loans on behalf of the Administration or on
behalf of any other department or agency, by
contract or otherwise, under terms and
conditions other than those specifically
authorized under this Act or the Small Business
Investment Act of 1958, except that he may
approve loans under section 7(a)(21) of this
Act in gross amounts of not more than
$1,250,000.''.

SEC. 212. SMALL BUSINESS DEVELOPMENT CENTERS.

(a) In General.--Section 21 of the Small Business Act (15 U.S.C.
648) is amended to read as follows:

``SEC. 21. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM.

``(a) Establishment of Program.--The Administrator is authorized to
make grants to any eligible applicant to establish the network of small
business development centers proposed in the plan submitted by such
applicant under subsection (b).
``(b) Selection of Grantees.--
``(1) Application.--An eligible applicant may apply for a
grant under subsection (a) by submitting to the Administrator
for approval a plan for establishing a network of small
business development centers.
``(2) Selection.--The Administrator shall select the
applicant that demonstrates it has the budgetary and other
resources to ensure that it will provide the most comprehensive
and coordinated assistance throughout the State. The
Administrator shall require the grantee to have a separate
budget for the purpose of operating its network of small
business development centers and to primarily utilize
institutions of higher education and women's business centers
operating pursuant to section 29 to provide for the operation
of the small business development centers. The Administrator
may approve, conditionally approve, or reject, a plan or
combination of plans submitted under this section. The
Administrator may not delegate the authority to select grantees
under this section except to the Deputy Administrator.
``(3) Limitation by state.--
``(A) In general.--Except as otherwise provided in
this paragraph, the Administrator shall select one
grantee from each State to serve the entire State.
``(B) Unavailability exception.--The Administrator
may select 2 grantees to serve a State if no eligible
applicant submits an application to serve the entire
State. With respect to any such State, the
Administrator, at the end of the 2-year period
beginning on the date of the selection of such
grantees, shall seek applications under this subsection
for the purpose of replacing such grantees with a
single grantee to serve the entire State.
``(C) Historical exception.--Subparagraph (A) shall
not apply with respect to any State if multiple
grantees served such State during calendar year 2000 or
2001.
``(D) Certain territories.--In the case that no
eligible applicant from a qualified territory applies
for a grant under this section, the Administrator may
select a grantee from any State to serve such qualified
territory. For purposes of the preceding sentence, the
term `qualified territory' means Guam, the United
States Virgin Islands, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
``(4) Eligible applicant.--For purposes of this section,
the term `eligible applicant' means--
``(A) any institution of higher education;
``(B) any women's business center operating
pursuant to section 29; or
``(C) in the case of an entity that was receiving a
grant under this section on December 31, 1990, any of
the following:
``(i) Any State government or any agency
thereof.
``(ii) Any regional entity.
``(iii) Any State-chartered development,
credit or finance corporation.
``(iv) Any entity formed by two or more of
the entities described in this paragraph.
``(5) Requirement to seek applications.--If for any reason
a grant under this section is terminated or not renewed, the
Administrator shall seek applications from eligible applicants
with respect to such grant.
``(c) Grant Provisions.--
``(1) Agreement between grantee and administrator.--The
Administrator and the grantee shall jointly develop, negotiate,
and agree upon the terms and conditions of the grant. The
grantee shall also consult with the district office or offices
within the State to determine the special services and
assistance that are needed by the community or communities
served by the grantee's small business development centers.
``(2) Requirements.--Each grant shall--
``(A) allow the grantee to serve portions of the
State by subcontracting the operation of a small
business development center to another entity, provided
that such small business development centers shall, to
the extent feasible, be located at institutions of
higher education or Women's Business Centers
established pursuant to section 29 of this Act;
``(B) ensure that the grantee provides services as
close as possible to small business concerns by
providing extension services and utilizing satellite
facilities, including those of any subcontractor;
``(C) ensure that the grantee provides facilities
and staff for each small business development center to
provide maximum accessibility and benefit to small
business concerns;
``(D) ensure that the grantee is utilizing the
resources of other Federal agencies in providing the
services and assistance set forth in subsection (f);
and
``(E) allow the grantee to enter into a contract
described in subsection (g)(2).
``(3) Prohibition on delegation to district offices.--The
Administrator shall not delegate any authority under paragraph
(1) to any employee of the Administration located in a regional
or district office.
``(4) Form of grant agreements.--For purposes of this
section, the term `grant' includes any contract or cooperative
agreement.
``(5) Prohibition on certain grant requirements.--The
Administrator shall not require, and a grant agreement shall
not include a requirement, that the grantee serve a particular
number of small business concerns with respect to loans under
section 7 of this Act or title V of the Small Business
Investment Act of 1958.
``(d) Term, Renewal, and Termination of Grants.--
``(1) Term of grants.--Each grant made under this section
shall be made on the basis of a calendar year or the Federal
fiscal year, as determined by the Administrator.
``(2) Automatic renewal.--Unless the Administrator for
cause terminates the grant or the grantee decides not to seek
renewal of the grant, the Administrator and the grantee shall
renew the agreement and may make mutually satisfactory
modifications to the agreement. The renewal shall take effect
on the date of termination of the old agreement.
``(3) Standards for termination.--After the opportunity for
notice and comment and consultation with the association
authorized by subsection (k), the Administrator shall
promulgate standards for determining when cause exists to
terminate a grantee. Such standards shall be codified in the
Code of Federal Regulations and shall take into account the
grantee's compliance with the standards set forth in the grant
agreement, any budgetary restrictions faced by the grantee, the
overall economic climate in the State served by the grantee,
and the accreditation of the grantee's small business
development centers (whether operated by the grantee or through
a subcontractor) under the program established pursuant to
subsection (l).
``(4) Notice of termination.--If the Administrator
determines that cause exists to terminate a grant agreement
under this section, the Administrator shall provide the grantee
with written notification setting forth the reasons therefor
and affording the applicant an opportunity for a hearing
pursuant to sections 554, 556, and 557 of title 5, United
States Code.
``(e) Management of Small Business Development Centers by
Grantees.--
``(1) Appointment of grantee director.--Each Grantee shall
appoint a full-time director to oversee the operations of the
grant, the subcontractors to the grantee, and the small
business development centers operated by the grantee. The grantee's
director shall be responsible for accounting for any Federal funds used
by the grantee to carry out the requirements of this section. The
grantee shall have the sole discretion of selecting the director
without requiring the approval of the Administrator, except that the
Administrator may terminate the employment of the grantee's director if
the Administrator determines that the grantee's director is unfit for
the position because of a prior conviction for a felony.
``(2) Small business development center staff.--Each small
business development center shall have a staff, which shall be
full-time, part-time, or on a contract basis, as the grantee
may determine.
``(3) Expenditures.--Expenditures of funds by the grantee
shall not require the approval of the Administrator except that
the Administrator may prohibit an expenditure using Federal
funds if, after consultation with the General Counsel, the
Administrator determines that such expenditure violates Federal
law.
``(f) Services Provided by the Grantee Through Small Business
Development Centers.--
``(1) In general.--Each grantee and its subcontractors
shall assist small business concerns in solving problems
concerning operations, manufacturing, engineering, technology
exchange and development, personnel administration, marketing,
sales, merchandising, finance, accounting, business strategy
development, and other disciplines required for small business
growth and expansion, innovation, increased productivity, and
management improvement, and for decreasing industry economic
concentrations. Small Business Development Centers shall, in
providing assistance to small manufacturers, coordinate such
assistance and utilize the resources of the Manufacturing
Extension Partnership of the National Institutes of Standards
and Technology.
``(2) Periodic modification.--Each grantee or its
subcontractors shall continue to upgrade and modify its
services, as needed, in order to meet the changing and evolving
needs of the small business community and those of small
manufacturers in particular.
``(3) Access to professionals.--Each grantee shall ensure
that small business development centers provide access to:
``(A) Business analysts to counsel, assist, and
inform small business clients.
``(B) Technology transfer agents to provide state
of art technology to small business concerns through
coupling with national and regional technology data
sources.
``(C) Information specialists to assist in
providing information searches and referrals to small
business concerns.
``(D) Part-time professional specialists to conduct
research or to provide counseling assistance whenever
the need arises.
``(E) Laboratory and adaptive engineering
facilities.
``(4) Services.--Each grantee shall ensure that the
services provided by its network of small business development
centers include--
``(A) furnishing one-to-one individual counseling
to small business concerns, 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 individuals on pre-business
startup planning, existing business expansion,
and export planning; and
``(iv) working with individuals referred by
the district offices of the Administration and
Administration participating lenders;
``(B) assisting in technology transfer, research
and development, including applied research, and
coupling from existing sources to small business
concerns, including--
``(i) working to increase the access of
small business concerns to the capabilities of
automated flexible manufacturing systems;
``(ii) working through existing networks
and developing new networks for technology
transfer that encourage partnership between the
small business and academic communities to help
commercialize university-based research and
development and introduce university-based
engineers and scientists to their counterparts
in small technology-based firms and small
manufacturers;
``(iii) exploring the viability of
developing shared production facilities, under
appropriate circumstances; and
``(iv) assisting small manufacturers in
developing more efficient operations, including
coordination of assistance with the
Manufacturing Extension Partnership of the
National Institutes of Standards and
Technology;
``(C) in cooperation with the Department of
Commerce, the entities providing services pursuant to
section 12(d), and other relevant Federal agencies,
actively assisting small business concerns in exporting
by identifying and developing potential export markets,
facilitating export transactions, developing linkages
between United States small business concerns and
prescreened foreign buyers, assisting small business
concerns to participate in international trade shows,
assisting small business concerns in obtaining export
financing, assisting small manufacturers in identifying
supply chain management opportunities, and facilitating
the development or reorientation of marketing and
production strategies; where appropriate, the grantee
and the Administrator may work in cooperation with the
State to establish a State international trade center
for these purposes;
``(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 business concerns;
``(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 concerns doing business, or attempting to
develop business, in foreign markets;
``(F) in providing assistance under this
subsection, grantees shall cooperate with the
Department of Commerce and other relevant Federal
agencies to increase access to available export market
information systems such as the CIMS system;
``(G) assisting small business concerns 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 termination (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 providing
goods or services to such facility or
to the military and civilian personnel
currently stationed or working at such
facility; and
``(II) the termination (or
reduction) of a Department of Defense
program (or contracts under such
program) 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 Federal, State, and local
governmental entities and other private sector
organizations, the parameters of a transition
adjustment program adaptable to the needs of
individual small business concerns;
``(iii) by conducting appropriate programs
to inform the affected small business community
regarding the anticipated adverse impacts
identified under clause (i) and the economic
adjustment assistance available to such firms;
and
``(iv) by assisting small business concerns
to develop and implement an individualized
transition business plan;
``(H) maintaining current information concerning
Federal, State, and local regulations that affect small
business concerns and counsel small business concerns
on methods of compliance. Counseling and technology
development shall be provided when necessary to help
small business concerns find solutions for complying
with environmental, 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 business concerns;
``(K) maintaining a working relationship and open
communications 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
community;
``(L) conducting in-depth surveys for local small
business groups in order to develop general information
regarding the local economy and general small business
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 business
concerns, including rural small manufacturers, in
exporting by identifying and developing potential
export markets for rural small business concerns,
facilitating export transactions for rural small
business concerns, developing linkages between United
States rural small business concerns and prescreened
foreign buyers, assisting rural small business concerns
to participate in international trade shows, assisting
rural small business concerns in obtaining export
financing and developing marketing and production
strategies;
``(N) assisting rural small business concerns in
developing marketing and production strategies that
will enable them to better compete in the domestic
market by providing technical assistance needed by
rural small business concerns, by making available
managerial assistance to rural small business concerns,
and by providing information and assistance in
obtaining financing for business startups and
expansion;
``(O) in conjunction with the United States Travel
and Tourism Administration, assist rural small business
concerns 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
business concerns in developing
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 consultants to whom small business concerns can
be referred;
``(Q) providing information to small business
concerns regarding compliance with regulatory
requirements;
``(R) developing informational publications,
establishing resource centers of reference materials,
and distributing compliance guides published under
section 312(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996;
``(S) providing small business concerns with access
to a wide variety of export-related information by
establishing on-line computer linkages between small
business development centers and an international trade
data information network with ties to the Export
Assistance Center program;
``(T) providing information and assistance to small
business concerns with respect to establishing drug-
free workplace programs;
``(U) in the case of a small business development
center located at an institution of higher learning,
hosting semi-annually a procurement conference to which
the grantee (or its subcontractors) invites small
business concerns, including small manufacturers, to
meet with the procurement officials of such institution
in an effort to increase procurement by such
institution from small business concerns and small
manufacturers;
``(V) providing comprehensive plans (developed in
cooperation with relevant State and Federal agencies)
relating to the export potential of small business
concerns, including small manufacturers; and
``(W) assisting small business concerns to develop
and implement strategic business plans to timely and
effectively respond to the closure of a large business
concern that has a significant adverse impact on the
community--
``(i) by developing broad economic
assessments of the adverse impacts of such
closure;
``(ii) by developing, in conjunction with
appropriate Federal, State, and local
governmental entities and other private sector
organizations, the parameters of a transition
adjustment program adaptable to the needs of
individual small business concerns;
``(iii) by conducting appropriate programs
to inform the affected small business community
regarding the adverse impacts identified under
clause (i) and the economic adjustment
assistance available to such firms;
``(iv) by assisting small business concerns
to develop and implement an individualized
transition business plan; and
``(v) by assisting unemployed individuals
in establishing a small business concern.
``(g) Special Rules Relating to Small Business Development
Centers.--
``(1) Services to out-of-state small business concerns.--
The Administrator may allow a small business development center
to serve small business concerns located outside the State in
which such center is located (or, in the case of a State with
more than one grantee, outside the area served by the grantee)
to the extent such business concerns are located within close
geographical proximity to the small business development center
as determined by the Administrator.
``(2) Contracts with other agencies.--Subject to the
restrictions set forth in this paragraph, a grantee (or its
subcontractors, with the grantee's approval) may contract with
a Federal Department or agency to provide specific assistance
to small business concerns through its network of small
business development centers. Before bidding on a contract
described in this paragraph, a grantee shall receive approval
from the Administrator. Before granting approval, the
Administrator shall consider the subject and scope of the
contract and the extent to which performance of the contract
would provide assistance to small business and not impair the
performance of the grantee's obligations under this section. A
contract for assistance under this paragraph shall not count
toward the achievement of any contracting goal under section
15(g).
``(3) Small business vendors.--Each grantee shall ensure,
to the extent practicable, that its network of small business
development centers utilize and compensate qualified small
business vendors, including private management consultants,
private consulting engineers, and private testing laboratories,
to provide services under this section to small business
concerns. To the extent appropriate for the community served by
the small business development center, such qualified small
business vendors should include at least one such vendor with
expertise in manufacturing and assisting small manufacturers.
``(4) Coordination with district offices, etc.--The
grantees shall ensure that the small business development
centers shall work in close cooperation with the
Administration's regional and district offices, the local small
business community, and appropriate State and local agencies.
No action by a grantee or its subcontractors or staff shall
require the approval of any employee in a regional or district
office of the Administration. Any such employee shall, after
consultation with district counsel, notify the Assistant
Administrator for Small Business Development Centers if such
employee believes that the grantee or its subcontractors or
staff has taken action that violates the law or jeopardizes the
legal position of the United States.
``(5) Assistance from state international trade offices.--
The grantee may use funds provided by State international trade
offices and co-locate employees of such offices at small
business development centers.
``(6) Coordination with administration.--On an annual
basis, the grantee, after consultation with the district
director, shall review and coordinate public and private
partnerships and cosponsorships with the Administrator for the
purpose of more efficiently leveraging available resources on a
national and a State basis. Should the grantee be unable to
consult with the district director, the grantee shall consult
with the Assistant Administrator for Small Business Development
Centers.
``(7) Prohibition on certain fees.--Each grantee shall
ensure that small business development centers shall not impose
or otherwise collect a fee or other compensation in connection
with the provision of counseling services under this section.
``(8) Privacy requirements.--
``(A) In general.--Each grantee shall ensure that
small business development centers shall not disclose
the name or address of any individual or small business
concern receiving assistance under this section without
the consent of such individual or small business
concern, except that--
``(i) the Administrator shall require such
disclosure if ordered to do so by a court in
any civil or criminal action; and
``(ii) if the Administrator considers it
necessary while undertaking a financial audit
of a small business development center or the
grantee's network of small business development
centers, the Administrator shall require such
disclosure for the sole purpose of undertaking
such audit.
``(B) Regulations.--After notice and comment and
not later than 180 days after the date of the enactment
of this subparagraph, the Administrator shall issue
regulations to establish standards for requiring
disclosures during a financial audit under subparagraph
(A)(ii).
``(h) Additional Grants.--
``(1) In general.--Any grantee may apply to the
Administrator for an additional grant to be used solely to
assist--
``(A) with the development and enhancement of
exports by small business concerns;
``(B) in technology transfer;
``(C) with outreach, development, and enhancement
of minority-owned small business startups or
expansions, HUBZone small business concerns, veteran-
owned small business startups or expansions, and women-
owned small business startups or expansions, in
communities affected by base closings or military or
corporate downsizing, or in rural or underserved
communities; and
``(D) small manufacturers.
``(2) Certain rules to apply.--Except as otherwise provided
in this subsection, any additional grant under this subsection
shall be subject to rules similar to the rules that apply to
grants made under subsection (a).
``(3) Grant amount.--A grant shall not be made under this
subsection if such grant which would exceed the grantee's pro
rata share of a $15,000,000 program based upon the populations
to be served by the grantee as compared to the total population
of the United States. The minimum amount of eligibility for any
State shall be $100,000. Any additional grant made under this
section shall not be taken into account for purposes of the
dollar program limitations specified in subsection (j).
``(4) Reallocation of unused funds.--If the Administrator
has not received an application for an additional grant from a
grantee pursuant to this subsection within 90 days after the
Administrator and the grantee have signed an agreement pursuant
to subsection (c) or within 60 days after the grantee and
Administrator has renewed an agreement pursuant to subsection
(c), the Administrator may make such grant to any eligible
applicant (determined without regard to so much of subsection
(b)(4)(C) as precedes `1990,') in that State to carry out the
activities specified in this subsection subject to the
requirements of paragraphs (2) and (3).
``(i) Matching Funds.--
``(1) In general.--The Administrator shall require as a
condition of any grant (or amendment or modification thereof)
made to a grantee under this section, that a matching amount
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.
``(2) Restriction.--The matching amount described in
paragraph (1) shall not include--
``(A) any indirect costs or in-kind contributions
derived from any Federal program; and
``(B) any amount received under a contract
described in subsection (g)(2).
``(j) Funding Formula.--
``(1) In general.--Subject to paragraph (3), the amount of
funds to be made available to the grantee or grantees within a
State under this subsection shall be equal to an amount
determined in accordance with the following formula:
``(A) The annual amount made available for the
Small Business Development Center Program under section
20(a), less any reductions made for expenses authorized
by paragraph (5), 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.
``(B) If the pro rata amount calculated under
subparagraph (A) for any State is less than the minimum
funding level under paragraph (3), the Administrator
shall determine the aggregate amount necessary to
achieve that minimum funding level for each such State.
``(C) The aggregate amount calculated under
subparagraph (B) shall be deducted from the amount
calculated under subparagraph (A) for States eligible
to receive more than the minimum funding level. The
deductions 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.
``(D) The aggregate amount deducted under
subparagraph (C) shall be added to the funds of those
States that are not eligible to receive more than the
minimum funding level in order to achieve the minimum
funding level for each such State, except that the
eligible amount of funds made available to any State
under this subsection shall not be reduced to an amount
below the minimum funding level.
``(2) Funds availability determination.--The amount of
funds that one or more grantees within a State are eligible to
receive under this subsection shall be the amount determined
under paragraph (1), subject to any modifications required
under paragraph (3), 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 paragraph (4). The amount of funds received by one or more
grantees in any State under any provision of this subsection
shall not exceed the amount of matching funds from sources
other than the Federal Government, as required under subsection
(i).
``(3) 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:
``(A) If the amount made available is not less than
$81,500,000 and not more than $90,000,000, the minimum
funding level shall be $500,000.
``(B) 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.
``(C) If the amount made available is more than
$90,000,000, the minimum funding level shall be the 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.
``(4) Distributions.--Subject to paragraph (3), if one or
more grantees within a State do not apply for, or use, their
full funding eligibility for a fiscal year, the Administration
shall distribute the remaining funds as follows:
``(A) If the grant to any State is less than the
amount received by that State in fiscal year 2000, the
Administrator shall distribute such remaining funds, on
a pro rata basis, based on the percentage of shortage
of each such State, as compared to the total amount of
such remaining funds available, to the extent 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, whichever first occurs.
``(B) If any funds remain after the application of
subparagraph (A), the remaining amount may be
distributed as supplemental funds to a grantee or
grantees in any State, as the Administrator determines,
in its discretion, to be appropriate, after
consultation with the association referred to in
subsection (k).
``(5) Use of amounts.--Of the amounts made available in any
fiscal year to carry out this section not more than $500,000
may be used by the Administrator to pay expenses enumerated in
subparagraphs (B) through (D) of section 20(a)(1).
``(6) Exclusions.--Funds made available to one or more
grantees within a State provided by the Administrator or
another Federal agency to carry out subsection (f)(4), (g)(2),
(h), or (o) or for supplemental grants set forth in paragraph
(4)(B), shall not be included in the calculation of maximum
funding to be made available to one or more grantees within the
State under paragraph (2).
``(7) Authorization of appropriations.--There is authorized
to be appropriated to carry out this section $135,000,000 for
fiscal year 2004 and $145,000,000 for fiscal year 2005. The
authority to award grants under this section shall be in effect
for each fiscal year only to the extent and in the amounts as
are provided in advance in appropriations Acts.
``(k) Formation of Association.--The grantees' directors are
authorized to form an association to pursue matters of common concern.
If more than a majority of the grantees' directors are members of such
an association, the Administrator is authorized and directed to
recognize the existence and activities of such an association and to
consult with it and develop documents--
``(1) announcing the annual scope of activities pursuant to
this section;
``(2) requesting proposals to deliver assistance as
provided in this section; and
``(3) governing the general operations and administration
of the Small Business Development Center Program, specifically
including the development of regulations and a uniform
negotiated grant agreement for use on an annual basis when
entering into agreements with grantees.
``(l) Program Examination and Accreditation.--
``(1) Examination.--The Administrator shall develop and
implement a biennial programmatic and financial examination of
each network of small business development centers established
pursuant to this section. The biennial examination shall be
conducted by the Assistant Administrator for Small Business
Development Centers.
``(2) Accreditation.--The Administrator shall provide
financial support, by contract or otherwise, to the association
authorized by subsection (k) for the purpose of developing and
implementing a small business development center accreditation
program.
``(3) Extension or renewal of cooperative agreements.--
``(A) In general.--In renewing a grant or
cooperative agreement or contract of a grantee, the
Administrator shall consider the results of the
examination and accreditation program conducted
pursuant to paragraphs (1) and (2).
``(B) Accreditation requirement.--The Administrator
may not renew any grant under this section unless the
grantee's small business development centers have been
accredited under the program conducted pursuant to this
subsection, except that the Assistant Administrator for
Small Business Development Centers may waive such
accreditation requirement if the Assistant
Administrator determines that the grantee is making a
good faith effort to obtain accreditation for each of
the grantee's small business development centers.
``(m) Small Business Development Center Advisory Boards.--
``(1) National small business development center advisory
board.--
``(A) Establishment.--There is established a
National Small Business Development 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 qualifications 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 business
concerns or associations representing small business
concerns. 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.
``(B) Operation.--The Board shall elect a Chairman
and advise, counsel, and confer with the Assistant
Administrator for Small Business Development 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 entitled 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 engaged in
activities of the Board and shall be entitled to be
reimbursed for expenses as a member of the Board.
``(2) Local small business development center advisory
boards.--Each grantee's director shall establish an advisory
board for the grantee's network of small business development
centers. The district director shall have no authority to
approve or disapprove the members of the advisory board
selected by the grantee's director.
``(n) Administration of Program.--
``(1) In general.--Except as otherwise provided in this
section, the program established by this section shall be
administered by the Administrator, acting through the Assistant
Administrator for Small Business Development Centers with such
oversight by the Associate Administrator for Enterprise
Outreach and Training as the Administrator determines to be
appropriate.
``(2) Duties of assistant administrator for small business
development centers.--The duties of the Assistant Administrator
for Small Business Development Centers shall include
recommending the annual program budget, reviewing the annual
budgets submitted by each grantee, establishing appropriate
funding levels therefore, advising the Administrator on the
selection of grantees to participate in the program,
implementing the provisions of this section, maintaining a
clearinghouse to provide for the dissemination and exchange of
information between grantees and their subcontractors and
conducting audits of recipients of grantees under this section.
``(3) Consultation requirements.--In carrying out the
duties described in paragraph (2), the Assistant Administrator
shall confer with and seek the advice of the advisory boards
established pursuant to subsection (m) and the heads of the
regional and district offices of the Administration.
``(o) Establishment of Information Sharing System.--
``(1) In general.--The Administrator, in consultation with
the grantees, their subcontractors, and the association
authorized by this section shall develop and implement an
information sharing system. Such system shall--
``(A) allow small business development centers to
exchange information about their programs;
``(B) provide information central to technology
transfer; and
``(C) provide information central to increased
utilization by United States businesses of sourcing
their procurement requirements with small
manufacturers.
``(2) Grant authority.--The Administrator may make grants
to one or more grantees to carry out the provisions of this
subsection. Such grants shall be awarded for a period of not to
exceed 5 years. The matching funds requirements of subsection
(i) shall not be applicable to grants made under this
subsection.
``(p) Cooperation With Federal Science Research Facilities and
Agencies.--
``(1) In general.--Laboratories operated and funded by the
Federal Government are authorized and directed to cooperate
with the Administrator in developing and establishing programs
to support small business development centers by making
facilities and equipment available; providing experiment
station capabilities in adaptive engineering; providing library and
technical information processing capabilities; and providing
professional staff for consulting. The Administrator is authorized to
reimburse the laboratories for such services.
``(2) National science foundation.--The National Science
Foundation is authorized and directed to cooperate with the
Administrator in developing and establishing programs to
support small business development centers.
``(3) National Aeronautics and Space Administration.--The
National Aeronautics and Space Administration and regional
technology transfer centers supported by the National
Aeronautics and Space Administration are authorized and
directed to cooperate with grantees and their small business
development centers.
``(q) Regulations.--In promulgating regulations to carry out this
section, the Administration shall identify, and require grantee
compliance with, the provisions included in uniform requirements of
Office of Management and Budget (OMB) Circulars which govern audits,
cost principles and administrative requirements for Federal grants, and
contracts and cooperative agreements.''.
(b) Conforming Amendment.--Paragraph (2) of section 27(g) of the
Small Business Act (15 U.S.C. 654(g)) is amended by striking ``section
21(c)(3)(T)'' and inserting ``section 21(f)(4)(T)''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act.
(2) Grants.--To the extent that the amendment made by
subsection (a) applies with respect to grants, such amendment
shall apply to grants made, renewed, or terminated after the
date of the enactment of this Act.
(d) Transition Rules.--
(1) Multiple grantees replaced with single grantee.--In the
case of a State which is served by two or more grantees under
section 21 of the Small Business Act on the date of the
enactment of this Act, the Administrator shall be required to
select a new grantee for such State following the selection
process set forth in such section (as in effect on the day
after the date of the enactment of this Act) if the grantees
serving such State on the date of the enactment of this Act
were selected after January 1, 2002.
(2) Small business development center advisory boards.--
Each member of the National Small Business Development Center
Advisory Board and each member serving on a local small
business development center advisory board on the day before
the date of the enactment of this Act shall continue to so
serve until the end of such member's term.

SEC. 213. ASSIGNMENT OF EMPLOYEES OF THE OFFICE OF INTERNATIONAL TRADE.

Section 22 of the Small Business Act (15 U.S.C. 649) is amended by
adding at the end the following new subsection:
``(h) In carrying out this section, the Administrator shall ensure
that the number of full-time equivalent employees of the Office
assigned to the one-stop shops referred to in section 2301(b) of the
Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)) is
not less than the number of such employees so assigned on January 1,
2003.''.

SEC. 214. SUPERVISORY AND ENFORCEMENT AUTHORITY FOR SMALL BUSINESS
LENDING COMPANIES.

Section 23 of the Small Business Act (15 U.S.C. 650) is amended to
read as follows:

``SEC. 23. 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
regulate, to examine, and to enforce laws governing the lending
activities of such lenders under section 7(a) in accordance
with the purposes of this Act.
``(b) Capital Directive.--The Administrator may determine that
failure of a small business lending company to maintain capital at the
minimum level established by the Administrator is an unsafe and unsound
practice. In addition to any other action authorized by law, the
Administrator may issue a directive to a small business lending company
that does not comply with the minimum capital requirement requiring the
small business lending company to increase capital to level established
by the Administrator.
``(c) Civil Action.--If a small business lending company violates
this Act, the Administrator may institute a civil action in an
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 authority
of a small business lending company or a non-Federally
regulated lender to make, service or liquidate business loans
authorized by section 7(a) of this Act--
``(A) for false statements knowingly made in any
written 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 application, 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 Administrator
and only if the Administrator is unavailable to take such
action.
``(A) The Administrator, after finding
extraordinary circumstances 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 preceding sentence, the
Administrator shall within two business 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 pursuant to subparagraph (4) to permanently
revoke the authority 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 designated
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 authority 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-
Federally regulated lender, or other person violates this Act
or is engaging or is about to engage in any acts or practices
which constitute or will constitute a violation of this Act,
the Administrator 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 Administrator may delegate the authority under the
preceding sentence only to the Deputy Administrator and only if
the Administrator is unavailable to take such action.
``(2) The Administrator, after finding extraordinary
circumstances and in order to protect the financial or legal
position 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
preceding sentence, the Administrator shall within two business
days follow the procedures set forth in subsection (f).
``(3) The Administrator may further order such small
business 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 Authority and
for Cease and Desist Order.--
``(1) Before revoking or suspending authority under
subsection (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 matters 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
provisions 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 statement 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 lending 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
subsection 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, suspension or revocation, to seek judicial review in an
appropriate district court.
``(g) Removal or Suspension of Management Official.--
``(1) Definition.--In this section, the term `management
official' means, with respect to a small business lending
company or a non-Federally regulated lender, an officer,
director, general partner, manager, employee, agent, or other
participant 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 remove that management official if, in the opinion
of the Administrator, 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 official, 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 management 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
subparagraph (A) shall contain a statement of the facts
constituting 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 thereon.
``(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 hearing, unless an earlier or a
later date is set by the Administrator at the
request of--
``(I) the management official, and
for good cause shown; or
``(II) the Attorney General.
``(ii) Consent.--Unless the management
official appears 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 removal has been
established, the Administrator may issue such
orders of removal from office as the
Administrator 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
management official concerned (except
in the case of an order issued upon
consent as described in subparagraph
(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 reviewing 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 management
official. Such suspension or prohibition may prohibit
the management official from making, servicing,
reviewing, 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 authorized by subparagraph (C),
shall remain in effect--
``(I) pending the completion of the
administrative proceedings pursuant to
a notice of intention to remove served
under paragraph (2); and
``(II) until such time as the
Administrator dismisses 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
hearing.--Not later than 10 days after a management
official is suspended or prohibited from participation
under subparagraph (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 a United States attorney, with a felony
involving dishonesty or breach of trust, the
Administrator may, by written notice served upon the
management official, suspend the management official
from office or prohibit the management 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 lender.
``(B) Effectiveness.--A suspension or prohibition
under subparagraph (A) shall remain in effect until the
information, 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
subparagraph (A) is entered against a management
official, then at such time as the judgment is not
subject to further judicial 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, effective upon service of a
copy of the order upon the small business lending
company or non-Federally regulated lender.
``(D) Authority upon dismissal or other
disposition.--A finding of not guilty or other
disposition of charges described in subparagraph (A)
shall not preclude the Administrator from instituting
proceedings under subsection (e) or (f).
``(5) Notification to small business lending company or a
non-federally regulated lender.--Copies of each notice 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
Administrator 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
purposes 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 for assets of the
company or lender.
``(2) Upon request of the Administrator, the court may
appoint 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
requirements 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 appointed under subsection (h).
``(2) If a small business lending company or a non-
Federally regulated lender is not in compliance with capital
requirements 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 Administrator 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
Administrator regarding the filing of any regular or special
report shall pay to the United States a civil penalty of not
more than $100 for each day of the continuance of the failure
to file such report, unless it is shown that such failure is
due to reasonable 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 requirements from small manufacturers.
``(2) The Administration 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
conducted 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
paragraph (1), upon such terms and conditions and for such
period of time as it deems necessary and appropriate, if the
Administration finds that such action is not inconsistent with
the public interest or the protection of the Administration.
The Administration may for the purposes of this section make
any alternative requirements appropriate to the situation.''.

SEC. 215. REAUTHORIZATION OF PAUL D. COVERDELL DRUG-FREE WORKPLACE
PROGRAM.

Paragraph (1) of section 27(g) of the Small Business Act (15 U.S.C.
654(g)) is amended by striking ``$5,000,000 for each of fiscal years
2001 through 2003'' and inserting ``$2,000,000 for each of fiscal years
2003 through 2005''.

SEC. 216. WOMEN'S BUSINESS CENTER PROGRAM.

Section 29 of the Small Business Act (15 U.S.C. 656) is amended to
read as follows:

``SEC. 29. WOMEN'S BUSINESS CENTER PROGRAM.

``(a) Definitions.--For purposes of this section:
``(1) The term `private nonprofit organization' means an
entity 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.
``(2) The term `women's business center site' means the
location of--
``(A) a women's business center; or
``(B) 1 or more women's business centers,
established in conjunction with another women's
business center in another location within a State or
region--
``(i) that reach a distinct population that
would otherwise not be served;
``(ii) whose services are targeted to
women; and
``(iii) whose scope, function, and
activities are similar to those of the primary
women's business center or centers in
conjunction with which it was established.
``(b) Authority.--The Administrator may provide financial
assistance to private nonprofit organizations to conduct projects which
will receive Federal funding for 5 years and those that receive
extensions for funding under the conditions set forth in this section
for the benefit of small business concerns owned and controlled by
women. The projects shall provide--
``(1) financial assistance, including training and
counseling in how to apply for and secure business credit and
investment capital, preparing and presenting financial
statements, and managing cash flow and other financial
operations of a business concern;
``(2) management assistance, including training and
counseling 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
counseling in identifying and segmenting domestic and
international market opportunities, preparing and executing
marketing plans, developing pricing strategies, locating
contract opportunities, negotiating contracts, and utilizing
varying public relations and advertising techniques.
``(c) Submission of 5-year plans.--
``(1) In response to solicitations made by the
Administrator requesting applications for grants to operate
women's business centers, each applicant organization initially
shall submit a 5-year plan to the Administrator detailing the
budget required to provide the services set forth in subsection
(b), the services that will be provided, the target population,
and the proposed fundraising activities to meet the non-Federal
contributions mandated by this section.
``(2)(A) Notwithstanding any other provision of law, the
Administrator may use such expedited methods of solicitation
and award as the Administrator determines to be appropriate to
carry out this section.
``(B) Any expedited procedures utilized by the
Administrator shall ensure that all small business sources are
provided a reasonable opportunity to submit applications.
``(d) Criteria.--The Administrator shall evaluate and rank
applicants in accordance with predetermined selection criteria that
shall be stated in terms of relative importance. Such criteria and
their relative importance shall be made publicly available and stated
in each solicitation for applications made by the Administrator. The
criteria shall include--
``(1) the experience of the applicant in conducting
programs or ongoing efforts designed to impart or upgrade the
business skills of women business owners or potential owners;
``(2) the present ability of the applicant to commence a
project within a minimum amount of time;
``(3) the ability of the applicant to provide training and
services to a representative number of women who are both
socially and economically disadvantaged; and
``(4) the location for the women's business center site
proposed by the applicant.
``(e) Selection of Grantees.--Assuming other ranking factors to be
equal, the Administrator shall make selection of grantees in the
following order of preference:
``(1) The Administrator shall select from the applications
those that demonstrate the greatest ability to serve women who
are socially and economically disadvantaged whether located in
standard metropolitan statistical areas or rural areas and
without regard to the location of an existing center.
``(2) If, in the opinion of the Administrator, 2 or more
applicants have the same rank with respect to service of
socially and economically disadvantaged women, the
Administrator shall prefer the applicant that proposes to serve
part of a State in a State that was served by a higher number
of women's business centers at any time in the last 5 years
than the number of such centers that serve such State at the
time of selection.
``(3) If no application has been received under which an
award can be made pursuant to paragraph (2), the Administrator
then shall select an applicant that proposes to serve a
standard metropolitan statistical area that was served by a
higher number of women's business centers at any time in the
last 5 years than the number of such centers that serve such
area at the time of selection.
``(f) Administrator Funding of Grantees.--The Administrator, except
as otherwise provided by subsection (m), shall provide funding
according to the following formula:
``(1) During the first and second years of operation, two
dollars in Federal funds for each dollar in matching funds as
required by subsection (g).
``(2) During the third, fourth, and fifth years, one dollar
in Federal funds for each dollar in matching funds as required
by subsection (g).
``(3) The grant agreement shall provide for the mechanism
of disbursement of Federal funds by the Administrator including
payment in lump sum or installments, in advance, or by way of
reimbursement. The Administrator may disburse up to 25 percent
of each year's Federal share to a grantee before the non-
Federal sector matching funds are obtained.
``(4) If a grantee fails to obtain the required non-Federal
contribution at any time during the life of the grant, such
grantee shall not be eligible thereafter for advance
disbursements pursuant to paragraph (3) during the remainder of
the term of the grant, or for any other women's business center
which it operates or for which it has applied to establish.
``(5) Prior to approving assistance to a grantee for any
other projects, the Administrator shall specifically determine
whether the Administrator believes that the grantee will be
able to obtain the requisite non-Federal funding and enter a
written finding setting forth the reasons for making such
determination.
``(6) The authority of the Administrator to provide funding
pursuant to this section shall only be in effect for each
fiscal year and only to the extent and in amounts as are
provided for in advance of appropriations Acts.
``(g) Matching Funds.--
``(1) Except as provided by subsection (n), each grantee,
shall be required to obtain matching contributions according to
the formula set forth in subsection (f).
``(2) No more than one-half of such contributions may be in
the form of in-kind contributions that are budget line items
only, including office equipment and office space.
``(3) The restriction in paragraph (2) shall apply to all
grantees under this section.
``(h) Contract Authority.--A women's business center may enter into
a contract with a Federal department or agency to provide specific
assistance to women and other underserved small business concerns.
Performance of such contract should not hinder the women's business
centers in carrying out the terms of the grant received by the women's
business centers from the Administrator.
``(i) Annual Program Examination.--
``(1) The Administrator 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
Administrator--
``(i) an itemized cost breakdown of actual
expenditures for costs incurred during the
preceding year;
``(ii) documentation regarding the amount
of matching assistance from non-Federal sources
obtained and expended by the center during the
preceding year in order to meet the
requirements of subsection (g) and, with
respect to any in-kind contributions described
in that subsection that were used to satisfy
the matching requirements, verification of the
existence and valuation of those contributions;
and
``(iii) a review of the grantee's success
in fundraising plan and whether that needs
revision to ensure that the grantee can sustain
operations after five years; 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) In conducting such annual examination, the
Administrator shall limit the total number of site visits to a
particular women's business center to no more than 2 per year,
unless the Administrator determines that extraordinary
circumstances, as defined in regulations promulgated by the
Administrator, requires more than 2 such visits.
``(j) Renewal of Funding and Termination.--
``(1) On an annual basis, commencing with the end of the
grantee's second year of operation of a women's business
center, the Administrator, based on the program review made
pursuant to subsection (i), shall determine whether to continue
funding the grantee according to the formula set forth in
subsection (f). In determining whether to renew funding during
any year of the life of the project operated by the grantee,
the Administrator--
``(A) shall consider the results of each annual
examination of the center under subsection (i); and
``(B) may withhold funding for the following year
or years, if the Administrator determines that--
``(i) the grantee has failed to provide for
any women's business center which it operates
any information required to by the
Administrator to perform the annual program
examination required under subsection (i), or
the information is deemed to be inadequate to
conduct the annual examination under subsection
(i);
``(ii) the center has failed to provide any
information required to be provided by the
center for purposes of the report of the
Administrator under subsection (l), or the
information provided by the center is
inadequate; or
``(iii) the Administrator determines,
pursuant to regulations adopted by the
Administrator and codified in the Code of
Federal Regulations, that the grantee has
failed to deliver the services required by
subsection (b) taking into account current
economic conditions and the target population
served by the grantee.
``(2) The Administrator shall not require, as a condition
of initial or continued funding, and a grant agreement shall
not include a requirement that a women's business center
operated by the grantee serve a particular number of women with
respect to loans under section 7 of this Act or title V of the
Small Business Investment Act of 1958.
``(3) The Administrator shall not fund a grantee for the
operation of a women's business center that has been in
operation for 5 years unless it applies for and receives an
extension of Federal funding pursuant to subsection (m) or the
grantee reapplies as a new applicant pursuant to subsection (c)
and the Administrator selects the grantee pursuant to
subsections (d) and (e).
``(4) If the Administrator makes a determination pursuant
to subparagraph (1)(B)(iii), prior to the withholding of any
funds, the Administrator shall provide the grantee with a
written notification of the reasons and shall provide the
grantee with the opportunity for a hearing pursuant to sections
554, 556, and 557 of title 5, United States Code.
``(5) The Administrator shall make a final decision based
on the record of the hearing and such decision shall be made
within 60 days of the notification provided in paragraph (4).
``(k) Management Report.--
``(1) The Administrator shall prepare and submit to the
Committee on Small Business of the House of Representatives and
the Committee on Small Business and Entrepreneurship of the
Senate a report on the effectiveness of all projects, including
those operated pursuant to extensions of Federal funding,
conducted under this section.
``(2) 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;
``(F) the number of hours of counseling and
training provided and workshops conducted; and
``(G) the most recent analysis, as required under
subsection (i)(1)(B), and the subsequent determination
made by the Administrator under that subsection.
``(l) Authorization of Appropriations.--
``(1) There is authorized to be appropriated--
``(A) $ 16,000,000 for fiscal year 2004; and
``(B) $ 17,500,000 for fiscal year 2005.
``(2)(A) Except as provided in subparagraph (B), amounts
made available under this subsection for each fiscal year, may
only be used for grant awards and may not be used for costs
incurred by the Administrator in connection with the management
and administration of the program under this section.
``(B) Of the amount made available under this subsection
for a fiscal year, 1.75 percent shall be available for costs
associated with selection, monitoring, and oversight.
``(3)(A) Subject to subparagraph (B), 30.2 percent of the
funds authorized pursuant to this subsection shall be reserved
to provide extensions of Federal funding to grantees that meet
the standards set forth in subsection (m).
``(B) If the Administrator does not distribute all funds
reserved for extensions of Federal funding pursuant to
subsection (m), the Administrator shall utilize the unawarded
funds to grantees according to the priorities set forth in
paragraphs (1), (2), and (3) of subsection (e).
``(m) Extensions of Federal Funding After Five Years.--
``(1) The Administrator is authorized to extend Federal
funding to any grantee for 5 years after the term of the
original grant ends.
``(2) In order to receive an extension of Federal funding,
the grantee shall submit an application in the fourth year of
its operation of a women's business center and has met all of
the criteria set by the Administrator for continued funding in
its fifth year.
``(n) Selection of Grantees for Extensions of Federal Funding.--
``(1) The Administrator shall review each application
submitted under paragraph (2) and select grantees for
extensions of Federal funding who have--
``(A) a demonstrated record of serving
predominantly socially and economically disadvantaged
women; and
``(B) are unable to meet their matching fund
requirements due to their target populations.
``(2) If the Administrator does not receive any
applications that meet the standards of subparagraph (A), the
Administrator shall select grantees under this subsection
according to the following preferences:
``(A) Those that meet the matching requirements in
subsection (f)(2).
``(B) If there are no applicants that meet that
standard in subparagraph (A) then based on criteria
developed by the Administrator to rank applicants for
extensions of Federal funding.
``(3) The Administrator shall maintain a copy of each
application submitted under this subsection for not less than
10 years.
``(4) In awarding an extension of Federal funding, the
Administrator may condition such award on the grantee obtaining
a match requirement at least equal to 2 non-Federal dollars for
each dollar of Federal funding except that grantees meeting the
standards of paragraph (1)(A) shall only be required to match
each Federal dollar with a non-Federal dollar.''.

SEC. 217. HUBZONE PROGRAM.

Section 31 of the Small Business Act (15 U.S.C. 657a) is amended to
read as follows:

``SEC. 31. HUBZONE PROGRAM.

``(a) In General.--There is established within the Administration 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) Authority of contracting officer.--
``(A) 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 respect to performance of such
contract opportunity, and the contracting
officer does not have a reasonable expectation
that 2 or more qualified HUBZone small business
concerns will submit offers for the contracting
opportunity;
``(ii) the anticipated award price of the
contract (including options) will not exceed--
``(I) $5,000,000, in the case of a
contract opportunity assigned a
standard industrial classification code
for manufacturing; or
``(II) $3,000,000, in the case of
all other contract opportunities; and
``(iii) in the estimation of the
contracting officer, the contract award can be
made at a fair and reasonable price.
``(B) A contract opportunity may be awarded
pursuant to this section on the basis of competition
restricted to qualified HUBZone small business 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.
``(2) Price evaluation preference in full and open
competitions.--
``(A) In general.--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 otherwise lowest, responsive, and responsible
offeror.
``(B) Full and open competition.--For purposes of
this paragraph, the term `full and open competition'
has the meaning given that term in section 4 of the
Office of Federal Procurement Policy Act (41 U.S.C.
403).
``(3) Relationship to other contracting preferences.--A
procurement may not be made from a source on the basis of a
preference provided in paragraph (1) or (2), 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.).
``(c) Enforcement; Penalties.--
``(1) Verification of eligibility.--In carrying out this
section, the Administrator shall establish procedures relating
to--
``(A) the filing, investigation, and disposition by
the Administration of any challenge to the eligibility
of a small business concern to receive assistance under
this section (including a challenge, filed by an
interested party, relating to the veracity of a
certification made or information provided to the
Administration by a small business concern under
section 3(p)(5); and
``(B) verification by the Administrator of the
accuracy of any certification made or information
provided to the Administration by a small business
concern under section 3(p)(5).
``(2) Examinations.--The procedures established under
paragraph (1) may provide for program examinations (including
random program examinations) by the Administrator of any small
business concern making a certification or providing
information to the Administrator under section 3(p)(5).
``(3) Provision of data.--Upon the request of the
Administrator, 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 determines to be necessary to carry out this
subsection.
``(4) Penalties.--In addition to the penalties described in
section 16(d), any small business concern that is determined by
the Administrator to have misrepresented the status of that
concern as a `HUBZone small business concern' for 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) 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--
``(1) once the Administrator has made the certification
required by subsection 3(p)(5)(A)(i) of this Act regarding a
qualified HUBZone small business concern and has determined
that subsection 3(p)(5)(B) does not apply to that concern,
include the name, address, and type of business with respect to
each such small business concern;
``(2) be updated by the Administrator not less than
annually; and
``(3) be provided upon request to any Federal agency or
other entity.
``(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out the program established by this section
$5,000,000 for each of fiscal years 2004 through 2005.''.

SEC. 218. OTHER REPEALS AND REORGANIZATIONS.

(a) Severability Clause Moved to End of Small Business Act.--
Section 36 of the Small Business Act is amended to read as follows:

``SEC. 36. SEVERABILITY.

``If any provision of this Act, or the application thereof to any
person or circumstances, is held invalid, the remainder of this Act,
and the application of such provision to other persons or
circumstances, shall not be affected thereby.''.
(b) Repeals.--
(1) Section 19 of the Small Business Act (15 U.S.C. 631
note) is amended to read as follows:

``SEC. 19. [RESERVED].''.

(2) Section 24 of the Small Business Act (15 U.S.C. 651) is
amended to read as follows:

``SEC. 24. [RESERVED].''.

(3) Section 25 of the Small Business Act (15 U.S.C. 652) is
amended to read as follows:

``SEC. 25. [RESERVED].''.

(4) Section 26 of the Small Business Act (15 U.S.C. 653) is
amended to read as follows:

``SEC. 26. [RESERVED].''.

(5) Section 28 of the Small Business Act (15 U.S.C. 655) is
amended to read as follows:

``SEC. 28. [RESERVED].''.

SEC. 219. RULES OF CONSTRUCTION.

(a) References.--A reference to a provision of law replaced by this
title, including a reference in a regulation, rule, order, or other
law, is deemed to refer to the corresponding provision enacted by this
Act.
(b) Continuing Effect.--Unless otherwise provided in this Act or in
an amendment made by this Act, any regulation, rule, or order in effect
under a provision of law replaced by this title shall continue in
effect under the corresponding provision enacted by this title until
repealed, amended, or superseded.
(c) Inferences of Repeal.--The repeal of a provision of law by this
title shall not be construed as a legislative inference that the
provision was or was not in effect before its repeal.

TITLE III--OTHER PROVISIONS

SEC. 301. REPORT REGARDING NATIONAL DATABASE OF SMALL MANUFACTURERS.

(a) Study and Report.--The Administrator, in consultation with the
association of small business development centers authorized by section
21(k) of the Small Business Act, shall--
(1) study the feasibility of creating a national database
of small manufacturers that institutions of higher education
could access for purposes of meeting procurement needs; and
(2) not later than one year after the date of the enactment
of this Act, transmit a report to the Congress regarding the
findings and conclusions of such study.
(b) Cost Estimate.--The report referred to in subsection (a)(2)
shall include an estimate of the cost of creating and maintaining the
database described in subsection (a).

SEC. 302. WORKFORCE TRANSFORMATION PLAN.

(a) Reorganization.--The Administrator shall, to the extent
permitted by law, reorganize the structure of the Administration and
reassign employees in order to--
(1) increase outreach to small business concerns;
(2) improve coordination with Federal contracting officers
in an effort to increase prime contract awards to small
business concerns;
(3) enable small business concerns to obtain better access
to capital;
(4) expand assistance provided to small manufacturers; and
(5) meet goals in this section and the Small Business Act
for procurement center representatives and commercial market
representatives.
(b) Required Cost Savings.--In carrying out subsection (a), the
Administrator shall achieve a 1 percent savings in the overall cost of
operating the agency.
(c) Increased Number of Procurement Center Representatives and
Commercial Marketing Representatives.--In carrying out subsection (a),
the Administrator shall ensure--
(1) that the following number of procurement center
representatives are employed by the Administration:
(A) 75 by September 30, 2004; and
(B) 100 by September 30, 2005; and
(2) that the following number of commercial marketing
representatives are employed by the Administration:
(A) 25 by September 30, 2004; and
(B) 50 by September 30, 2005.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
(e) Report to Congress.--Not later than 1 year after the date of
the enactment of this Act, the Administrator shall transmit a report to
the Congress describing the steps taken by the Administrator to carry
out this section. Such report shall contain--
(1) a detailed analysis of how the transformation has--
(A) increased contact with small business concerns;
(B) expanded dollar financings to small business
concerns;
(C) increased the total number of prime and
subcontracting dollars awarded to small business
concerns, including increases in each contracting
program established pursuant to sections 8 and 15 of
this Act; and
(D) increased assistance provided to small
manufacturers; and
(2) the Administrator's assessment of further actions
needed to transform the workforce to meet the objectives
described in paragraph (1).

SEC. 303. REPEAL OF CERTAIN PROVISIONS OF THE DISASTER RELIEF ACT OF
1970.

(a) In general.--Section 237 of the Disaster Relief Act of 1970 (15
U.S.C. 636d) is hereby repealed.
(b) No Effect on Outstanding Loans.--The repeal made by this
section shall not affect any loan made before the date of the enactment
of this Act.

SEC. 304. REGULATIONS ON SIZE STANDARDS OF FRANCHISEES.

(a) Promulgation.--Not later than 180 days after the date of the
enactment of this Act, the Administrator shall repeal section
121.103(g) of title 13, Code of Federal Regulations (as in effect on
the date of the enactment of this Act) and promulgate a new regulation,
after opportunity for notice and comment, taking into account whether
the franchisee or licensee--
(1) retains the majority of its profits but not less than
51 percent;
(2) bears the burdens of its losses;
(3) shares no common ownership or management personnel with
the franchisor or licensor;
(4) maintains daily control of its operations including
determining who its customers will be; and
(5) is subject to excessive restrictions on the sale of its
business given the interest of the franchisor or licensor in
protecting the goodwill of its trademarks, tradenames, or
service marks.
(b) Failure To Promulgate New Standard.--If the Administrator fails
to comply with subsection (a), any franchisee or licensee shall be
treated as small for purposes of the Small Business Act until the
Administrator has issued a final regulation as required under
subsection (a).

SEC. 305. TEMPORARY SMALL BUSINESS DEVELOPMENT CENTER ASSISTANCE TO
INDIAN TRIBE MEMBERS, NATIVE ALASKANS, AND NATIVE
HAWAIIANS.

(a) In General.--The Administrator of the Small Business
Administration may award a grant under this section to any grantee
under section 21 of the Small Business Act. A grant under this section
shall be used solely to provide services described in section 21(f)(4)
of the Small Business Act to assist with outreach, development, and
enhancement on Indian lands of small business startups and expansions
owned by Indian tribe members, Native Alaskans, and Native Hawaiians.
(b) Limitation.--A grant shall not be made to a grantee under this
section unless the area served by such grantee has a combined
population of Indian tribe members, Natives Alaskans, and Native
Hawaiians that comprises at least 1 percent of the area's total
population, as shown by the latest available census.
(c) Grant Applications.--An applicant for a grant under this
section shall submit to the Administrator an application that is in
such form as the Administrator may require. The application shall
include information regarding the applicant's goals and objectives for
the services to be provided using the grant, including--
(1) the capability of the applicant to provide training and
services to Indian tribe members, Native Alaskans, and Native
Hawaiians;
(2) the locations of the small business development centers
that would provide the assistance described in subsection (a);
(3) the required amount of grant funding needed by the
applicant to implement the program; and
(4) the extent to which the applicant has consulted with
local tribal councils.
(d) Applicability of Grant Requirements.--An applicant for a grant
under this section shall comply with all of the requirements applicable
to a grantee under section 21 of the Small Business Act, except that
the matching funds requirements of subsection (i) of such section shall
not apply.
(e) Maximum Amount of Grants.--A grantee shall not receive more
than $300,000 in grants under this section in a fiscal year.
(f) Advice of Local Tribal Counsels.--A grantee under this section
shall request the advice of local tribal councils regarding how best to
provide assistance to Indian tribe members, Native Alaskans, and Native
Hawaiians and where to locate centers to provide such assistance.
(g) Regulations.--After providing notice and an opportunity for
comment and after consulting with the association recognized by the
Administrator under section 21(k) of the Small Business Act (but not
later than 180 days after the date of the enactment of this Act), the
Administrator shall issue final regulations to carry out this section,
including regulations that establish--
(1) standards relating to educational, technical, and
support services to be provided by grantees under this section;
and
(2) standards relating to any work plan that the
Administrator may require a grantee under this section to
develop.
(h) Definitions.--For purposes of this section:
(1) Indian lands.--The term ``Indian lands'' has the
meaning given the term ``Indian country'' in section 1151 of
title 18, United States Code, the meaning given the term
``Indian reservation'' in section 151.2 of title 25, Code of
Federal Regulations (as in effect on the date of the enactment
of this Act), and the meaning given the term ``reservation'' in
section 4 of the Indian Child Welfare Act of 1978 (25 U.S.C.
1903).
(2) Indian tribe.--The term ``Indian tribe'' has the
meaning given such term in section 4(e) of the Indian Self-
Determination and Education Assistance Act.
(3) Indian tribe member.--The term ``Indian tribe member''
means a member of an Indian tribe (other than a Native
Alaskan).
(4) Native alaskan.--The term ``Native Alaskan'' has the
meaning given the term ``Native'' in section 3(b) of the Alaska
Native Claims Settlement Act (43 U.S.C. 1602(b)).
(5) Native hawaiian.--The term ``Native Hawaiian'' means
any individual who is a descendant of the aboriginal people
who, prior to 1778, occupied and exercised sovereignty in the
area that now constitutes the State of Hawaii.
(i) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $7,000,000 for each of fiscal
years 2004 through 2006.
(j) Nonapplicability of Certain Limitations.--Funding under this
section shall not be taken into account under subsections (h), (i), and
(j) of section 21 of the Small Business Act.
(k) Limitation on Use of Funds.--The Administrator may carry out
this section only with amounts appropriated specifically to carry out
this section.
(l) Evaluation of Program.--Not later than March 31, 2006, the
Administrator shall transmit to the Congress a report containing an
evaluation of the grant program carried out under this section.

SEC. 306. TEMPORARY SMALL BUSINESS DEVELOPMENT CENTER ASSISTANCE FOR
VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT.

(a) In General.--The Administrator may award a grant under this
section to any grantee under section 21 of the Small Business Act. A
grant under this section shall be used solely to provide, on a
statewide basis, technical assistance to secondary schools, or to
postsecondary vocational or technical schools, for the development and
implementation of curricula designed to promote vocational and
technical entrepreneurship.
(b) Minimum Grant.--The Administrator shall not make a grant under
this section in an amount less than $200,000.
(c) Application.--Each applicant for a grant under this section
shall submit to the Administrator an application in such form as the
Administrator may require. The application shall include information
regarding the applicant's goals and objectives for the educational
programs to be assisted.
(d) Report to Administrator.--The Administrator shall make a
condition of each grant under the program that not later than 18 months
after the receipt of the grant the grantee shall transmit to the
Administrator a report describing how the grant funds were used.
(e) Cooperative Agreements and Contracts.--The Administrator may
enter into a cooperative agreement or contract with any grantee under
this section to provide additional assistance that furthers the
purposes of this section.
(f) Applicability of Grant Requirements.--An applicant for a grant
under this section shall comply with all of the requirements applicable
to a grantee under section 21 of the Small Business Act, except that
the matching funds requirements of subsection (i) of such section shall
not apply.
(g) Evaluation of Program.--Not later than March 31, 2006, the
Administrator shall transmit to the Congress a report containing an
evaluation of the grant program carried out under this section.
(h) Clearinghouse.--The association recognized by the Administrator
under section 21(k) of the Small Business Act shall act as a
clearinghouse of information and expertise regarding vocational and
technical entrepreneurship education programs. In each fiscal year in
which grants are made under the program, the Administrator shall
provide additional assistance to such association to carry out the
functions described in this subsection.
(i) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $7,000,000 for each of fiscal
years 2004, 2005, and 2006.
(j) Nonapplicability of Certain Limitations.--Funding under this
section shall not be taken into account under subsections (h), (i), and
(j) of section 21 of the Small Business Act.
(k) Limitation on Use of Funds.--The Administrator may carry out
this section only with amounts appropriated specifically to carry out
this section.

SEC. 307. VERY SMALL BUSINESS CONCERN CONTRACT DATA COLLECTION.

The Administrator and the Administrator of General Services, acting
jointly, shall create, within the data collection capabilities of the
Federal Procurement Data System, a data element that identifies
contract awards to very small business concerns, under section 15(t) of
the Small Business Act. In carrying out the preceding sentence, the
Administrators shall ensure that the data element is in use by all
Federal entities with respect to such awards not later than 90 days
after the date of the enactment of this Act.

SEC. 308. VERY SMALL BUSINESS CONCERN PILOT PROGRAM FOR COMPETITION
AWARD TO HOME-BASED BUSINESS.

(a) In General.--The Administrator shall establish a pilot program
that ensures that at least one award to a very small business concern
resulting from competition under section 15(t)(2)(C) of the Small
Business Act is made to a home-based business.
(b) Definition.--As used in this section, the term ``home-based
business'' means a small business, the headquarters, main office, and
records of which are located at the primary residence of the majority
owner.
(c) Term of Pilot Program.--The pilot program shall begin not later
than 90 days after the date of the enactment of this Act and shall end
on September 30, 2007.

SEC. 309. SOCIALLY AND ECONOMICALLY DISADVANTAGED BUSINESS.

Section 7102(c) of the Federal Acquisition Streamlining Act of 1994
(Public Law 103-355; 15 U.S.C. 644 note) is amended by striking
``September 30, 2003'' and inserting ``September 30, 2005''.

SEC. 310. STUDY AND REPORT ON EFFECTIVENESS OF AGGREGATE LIMITATIONS ON
AMOUNT OF ASSISTANCE TO ANY SINGLE ENTERPRISE.

(a) Study.--The Administrator shall conduct a study of whether the
aggregate amount limitation under section 306(a) of the Small Business
Investment Act of 1958 (15 U.S.C. 686(a)) is an impediment to
investment in small manufacturers. In conducting the study, the
Administrator shall consult licensees and small manufacturers.
(b) Report.--Not later than one year after the date of the
enactment of this Act, the Administrator shall report the results of
the study to the Committee on Small Business of the House of
Representatives and the Committee on Small Business and
Entrepreneurship of the Senate.

SEC. 311. STUDY AND REPORT ON COORDINATION OF NEW MARKETS VENTURE
CAPITAL PROGRAM WITH NEW MARKETS TAX CREDIT PROGRAM.

(a) In General.--The Administrator shall conduct a study to
identify an approach to better coordinate the administration of the New
Markets Venture Capital Program under part B of title III of the Small
Business Investment Act of 1958 (15 U.S.C. 689 et seq.) with the New
Markets Tax Credit under section 45D of the Internal Revenue Code of
1986.
(b) Report.--Not later than 90 days after the date of the enactment
of this Act, the Administrator shall report the results of the study to
the Committee on Small Business of the House of Representatives and the
Committee on Small Business and Entrepreneurship of the Senate.

SEC. 312. STUDY AND REPORT ON PREMIER CERTIFIED LENDERS PROGRAM.

(a) In General.--The Administrator shall enter into a contract with
a Federal agency experienced in community development lending and
financial regulation or with a member of the Federal Financial
Institutions Examinations Council to conduct a study and prepare a
report regarding--
(1) the extent to which statutory requirements have caused
overcapitalization in the loss reserves maintained by certified
development companies participating in the Premier Certified
Lenders Program under section 508 of the Small Business
Investment Act of 1958 (15 U.S.C. 697e); and
(2) alternatives for establishing and maintaining loss
reserves that are sufficient to protect the Government from the
risk of loss associated with loans guaranteed under that
Program.
(b) Transmission of Report.--Not later than 180 days after the date
of the enactment of this Act, the Administrator shall transmit the
report to the Committee on Small Business of the House of
Representatives and the Committee on Small Business and
Entrepreneurship of the Senate.
(c) Limitation.--The amount of the contract under subsection (a)
shall not exceed $75,000.

SEC. 313. DATA COLLECTION CAPABILITIES.

The Administrator shall work with the Administrator of General
Services to establish within the data collection capabilities of the
Federal Procurement Data System a data element capable of identifying
contract awards made as a result of section 7102(c) of the Federal
Acquisition Streamlining Act of 1994 (Public Law 103-355; 15 U.S.C. 644
note). Such data element shall be established and populated by Federal
agencies awarding contracts as a result of section 7102(c) of the
Federal Acquisition Streamlining Act of 1994 (Public Law 103-355; 15
U.S.C. 644 note) within 90 days of the date of the enactment of this
Act.

SEC. 314. RESUBMISSION OF DISASTER LOAN APPLICATIONS FOR BUSINESSES
AFFECTED BY SEPTEMBER 11, 2001, TERRORIST ATTACKS.

(a) Resubmission of Applications.--Until 90 days after the date of
the enactment of this Act, a small business concern may resubmit an
application for a loan under section 7(b)(2) of the Small Business Act
(15 U.S.C. 636(b)(2)) may be resubmitted if the following conditions
are met:
(1) Original application.--The small business concern
submitted the original application in response to an injury
due, in whole or in part, to the terrorist attacks of September
11, 2001 in New York, New York or Arlington, Virginia.
(2) Location.--On September 11, 2001, and on the date of
the resubmission, a facility of the small business concern is
located in any of the following:
(A) Bronx, Kings, Nassau, New York, Queens,
Richmond, or Westchester county in New York.
(B) Bergen, Hudson, Middlesex, or Union county in
New Jersey.
(C) Arlington or Fairfax county or the city of
Alexandria in Virginia.
(D) The District of Columbia.
(E) Montgomery county in Maryland.
(3) Inability to operate.--Without regard to physical
damage to a facility, the applicant was unable to operate at a
facility referred to in paragraph (2) because of--
(A) use of the facility, in whole or in part, for
any purpose, by or on behalf of, Federal, State, or
local authorities for more than 20 days, beginning on
or after September 11, 2001; or
(B) prohibition of use of the facility, in whole or
in part, by an order of a Federal agency for more than
20 days, beginning on or after September 11, 2001.
(b) Standards for Approval.--The Administrator shall approve a loan
with respect to an application resubmitted under subsection (a), if the
applicant has a ratio of net operating income to debt service of not
less than 1.15. In calculating the ratio, the Administrator shall
exclude any Federal or State tax lien or obligation.
(c) Special Rule.--The Administrator shall resolve any reasonable
doubt of likelihood of repayment of an application resubmitted under
subsection (a) in favor of the applicant.

SEC. 315. NATIONAL SMALL BUSINESS INCUBATOR PROGRAM.

(a) Purpose.--It is the purpose of the National Small Business
Incubator Program to:
(1) Promote economic development and the creation of wealth
and job opportunity in low-income geographic areas and parts of
the country with declining manufacturing bases and among
individuals living in such areas through business incubation
centers.
(2) Develop a business incubation program with the mission
of providing focused assistance to aid in the development of
small businesses.
(3) Make grants to economic development organizations and
other entities for the purpose of providing business incubation
services to small businesses.
(4) Revitalize and reuse industrial sites for economic
growth.
(b) Grant Program.--
(1) In general.--In accordance with the requirements of
this subsection, the Administrator may make a 5-year grant to
each of 10 eligible organizations to establish and operate a
small business incubator program.
(2) Applications.--To be eligible to receive a grant under
this subsection, an eligible organization shall submit an
application to the Administrator at such time and in such form
and manner as the Administrator may require. Each such
application shall include the grantee's plan for establishing
and operating a small business incubator program.
(3) Selection of grantees.--In selecting the 10 grantees
under this subsection, the Administrator shall evaluate and
rank applicants in accordance with predetermined selection
criteria that will be stated in terms of relevant importance of
such criteria. The relative importance of the criteria shall be
made publicly available and stated in each solicitation for
applicants made by the Administrator. The criteria shall
include the following:
(A) The experience of the applicant in conducting
business development.
(B) The experience of the applicant in technology
and manufacturing.
(C) The extent to which the incubator will assist
in the development of low-income, women, or minority
business, or the revitalization of depressed
manufacturing areas.
(D) The extent to which the proposed site is in an
area of high unemployment and will result in the reuse
of a previously used industrial site.
(E) The extent to which the applicant has a
management team in place with experience in running a
business incubator or relevant business development
experience.
(F) The extent to which the applicant's plan will
result in the economic development of low-income
communities or high-unemployment areas.
(G) The ability of the applicant to successfully
establish and operate a small business incubator
program.
(H) The ability of the applicant to enter into
cooperative agreements with lending institutions to
provide a streamlined process for business concerns
utilizing the small business incubator program to
obtain financial assistance, including loans under
subsection (c).
(I) The ability of the applicant to provide the
services of licensed professionals.
(J) The extent to which the applicant's plan for
establishing and operating a small business incubator
program will do the following:
(i) Enhance small business development.
(ii) Meet the needs and goals of the
community in which the incubator is to be
located.
(iii) Serve as a catalyst for further
development.
(iv) Involve the rehabilitation of a
warehouse, factory, or building which has
fallen into disrepair.
(v) Assist in redeveloping a disadvantaged
area.
(vi) Target minority and women
entrepreneurs.
(vii) Focus on the development of
manufacturing and technology.
(viii) Retain or create jobs.
(ix) Include assistance regarding
marketing, financial management, human
resources development, and access to capital
(both debt and equity).
(4) Grant requirements.--Each grantee shall use the grant
funds to establish a small business incubator program, which
shall make the following assistance available (on a shared or
unshared basis, as the grantee may determine) to businesses
participating in such program:
(A) Office space.
(B) Office equipment, including computers,
facsimile machines, photocopiers, access to
telecommunications services (including broadband
services), and manufacturing equipment.
(C) Administrative and technical staff.
(D) Training in the areas of marketing, financial
management, human resources, and contracting.
(E) Assistance in obtaining loans, including loans
under subsection (c).
(F) Assistance in locating investors and networking
with local business organizations.
(G) Individualized reviews of marketing, financial,
and business plans, which shall occur monthly for such
period as the Administrator may determine and quarterly
thereafter.
(H) Legal, accounting, and marketing services.
(I) Mentoring program with established, successful,
large businesses to last the duration of the business'
stay in the incubator.
(5) Additional assistance.--A grantee may use grant funds
to provide child care services to participating business and
any other assistance which is approved by the Administrator.
(6) Additional program requirements.--
(A) Participating businesses.--Each grantee shall
select the businesses which will participate in the
grantee's small business incubation program. The
grantee shall select businesses which are not yet well
established but which have the potential to be self-
sustaining. Each grantee shall require participating
businesses to participate in the training described in
paragraph (4)(D), to submit marketing, financial, and
business plans and to participate in the review of such
plans described in paragraph (4)(G).
(B) Cooperative agreements with lenders.--Each
grantee shall enter into a cooperative agreement with
one or more lenders to provide a streamlined process by
which participating businesses may obtain loans,
including loans under subsection (c).
(C) Fees.--Each grantee may charge participating
businesses a fee for the assistance provided to such
business by the grantee. The amount of such fee shall
be determined under a sliding scale based on the
financial success of the participating business. The
grantee may not charge a participating business a fee
for the first 2 years of such businesses participation
in the incubator.
(7) Non-federal matching funds.--The Administrator shall
not make available any grant funds under this subsection until
the grantee has contributed non-Federal matching funds in an
amount equal to 50 percent of the amount of such grant funds.
(8) Eligible organizations.--For purposes of this section,
the term ``eligible organization'' means any of the following:
(A) An organization described in section 501(c)(3)
of the Internal Revenue Code of 1986 and exempt from
tax under section 501(a) of such Code.
(B) A business league, chamber of commerce, or
board of trade described in section 501(c)(6) of the
Internal Revenue Code of 1986 and exempt from tax under
section 501(a) of such Code.
(C) A local development agency that is chartered,
established, or otherwise sanctioned by a State or
local government.
(D) A small business development center (within the
meaning of section 21 of the Small Business Act).
(E) A college or university.
(F) A unit of State or local government.
(9) Federal coordination.--The Administrator, in
consultation with the Economic Development Administration and
the Minority Business Development Agency, shall--
(A) undertake efforts to coordinate and enhance
Federal programs that relate to small business
incubation programs; and
(B) invite State and local governments, lending
institutions, and other appropriate public and private
organizations to serve as intermediaries in outreach
efforts related to small business incubation programs.
(10) Termination.--The Administrator shall not make any new
5-year grants under this subsection after the end of the 180-
day period beginning on the date that funds are first made
available to carry out this subsection.
(11) Reports.--
(A) Initial report.--One year after the first grant
is made under this subsection, the Administrator shall
transmit to the Congress a preliminary report regarding
the National Small Business Incubator Program conducted
under this section.
(B) Final report.--Four years after the first grant
is made under this subsection, the Administrator shall
transmit to the Congress a final report regarding the
National Small Business Incubator Program conducted
under this section. Such report shall include any
recommendations of the Administrator regarding ways to
improve such program and the recommendation of the
Administrator as to whether such program should be
extended.
(12) Authorization of appropriations.--There are authorized
to be appropriated to carry out this subsection $25,000,000 for
each of fiscal years 2004 and 2005, which amounts shall remain
available until expended.
(c) Loan Program.--
(1) In general.--The Administrator may make loans under
section 7(a) of the Small Business Act to small business
concerns (as defined pursuant to section 3 of the Small
Business Act) participating in a small business incubation
program described in subsection (b).
(2) Loan terms.--
(A) In general.--Except as provided in subparagraph
(B), the rules which apply under the Small Business Act
to loans made under section 7(a) shall apply with
respect to loans made under this subsection.
(B) Special rules for deferred participation
loans.--In the case of an agreement to participate on a
deferred basis in any such loan:
(i) Such participation by the
Administration shall be equal to 90 percent of
the balance of the financing outstanding at the
time of the disbursement of the loan.
(ii) The Administrator shall collect
(except in the case of a loan that is repayable
in 1 year or less) a guarantee fee, which shall
be payable by the participating lender and may
be charged to the borrower as follows:
(I) A guarantee fee equal to 0.5
percent of the deferred participation
share of a total loan amount that is
not more than $150,000.
(II) A guarantee fee equal to 1.5
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 equal to 2
percent of the deferred participation
share of a total loan amount that is
more than $700,000.
(iii) The annual fee assessed and collected
on any such loan shall not exceed an amount
equal to 0.15 percent of the outstanding
balance of the deferred participation share of
the loan.
(iv) The Administrator may make such loans
without regard to the ability of a small
business concern to obtain credit elsewhere.
(v) The Administrator shall make such loans
without regard to the availability of
collateral to secure such loans.
(vi) The Administrator may charge interest
on any such loan. Such charge may not exceed a
rate of 4 percent per year.
(3) Regulations.--Not later than 120 days after the date of
enactment of this Act, the Administrator shall issue interim
final rules and guidelines to implement this subsection.
(4) Authorization of appropriations.--There are authorized
to be appropriated for fiscal year 2004 such sums as may be
necessary to carry out this subsection, which sums shall remain
available until expended.

SEC. 316. REPORT REGARDING EFFECTS OF SALE OF DISASTER LOANS ON
BORROWERS.

Not later than 1 year after the date of the enactment of this Act,
the Chief Counsel for Advocacy of the Small Business Administration
shall report to the Congress regarding the sale by the Administrator of
loans made under section 7(b) of the Small Business Act. Such report
shall include the following:
(1) A description of the effects of such sales on
borrowers.
(2) A description of the effects that prohibiting such
sales would have on the operations of the Administration.
(3) Any recommendations of the Chief Counsel for Advocacy
for reducing the effects of such sales on borrowers.

SEC. 317. SUSPENSION AND EXTENSION OF CERTAIN DISASTER LOANS RELATED TO
THE TERRORIST ATTACKS OF SEPTEMBER 11, 2001.

(a) In General.--With respect to any loan made under section 7(b)
of the Small Business Act to a qualified small business concern as a
result of the terrorist attacks against the United States that occurred
on September 11, 2001, the Administrator shall, upon application by
such concern during the 2-year period beginning on the date of the
enactment of this Act, suspend the payment of principal and interest
charges on, and extend the maturity of, the Federal share of such loan
for a period of not less than 2 years and not more than 5 years.
(b) Qualified Small Business Concern.--For purposes of this
section, the term ``qualified small business concern'' means, with
respect to any loan made to such concern under section 7(b) of the
Small Business Act, a small business concern that--
(1) was located in an area described in section 314(a)(2)
on September 11, 2001; and
(2) would suffer substantial economic injury if required to
make the scheduled payments under such loan.
(c) Substantial Economic Injury.--For purposes of this section, the
term ``substantial economic injury'' has the meaning given such term in
section 7(b)(3)(A)(iii) of the Small Business Act.

SEC. 318. DEFINITIONS.

For purposes of this title:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(2) Administration.--The term ``Administration'' means the
Small Business Administration.
(3) Small business concern.--The term ``small business
concern'' has the meaning given such term pursuant to section
3(a) of the Small Business Act.

Union Calendar No. 249

108th CONGRESS

2d Session

H. R. 2802

[Report No. 108-325, Part I]

_______________________________________________________________________

A BILL

To reauthorize the Small Business Act and the Small Business Investment
Act of 1958, and for other purposes.

_______________________________________________________________________

October 21, 2003

Reported with an amendment and referred to the Committee on Government
Reform for a period ending not later than October 31, 2003, for
consideration of such provisions of the bill and amendment as fall
within the jurisdiction of that committee pursuant to clause 1(h), rule
X

March 2, 2004

Referral to the Committee on Government Reform extended for a period
ending not later than March 8, 2004

March 8, 2004

Committee on Government Reform discharged; committed to the Committee
of the Whole House on the State of the Union and ordered to be printed